SECURITIES AND EXCHANGE COMMISSION

                          WASHINGTON, DC  20549

                                FORM 10-Q

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

                     SECURITIES EXCHANGE ACT OF 1934

                 For the Quarter Ended September 30, 1996


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             (IRS Employer
     Incorporation or Organization)          Identification No.)

    200 Clarendon Street, Boston, MA                02116
(Address of Principal Executive Office)           (Zip Code)

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

                              Not Applicable
              (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, 1996 and
                December 31, 1995                                     3
                
                Statements of Operations for the Three and
                Nine Months Ended September 30, 1996 and 1995         4
                
                Statements of Partners' Equity for the
                Nine Months Ended September 30, 1996 and
                for the Year Ended December 31, 1995                  5
                
                Statements of Cash Flows for the Nine
                Months Ended September 30, 1996 and 1995              6
                
                Notes to Financial Statements                      7-13
                
  Item 2   -    Management's Discussion and Analysis of
                Financial Condition and Results of Operations     14-21


PART II:   OTHER INFORMATION                                          22





















                                    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
<TABLE>
<CAPTION>
                                                                    September 30,     December 31,
                                                                         1996             1995
                                                                         ----             ----
<S>                                                                      <C>              <C>
Current assets:
 Cash and cash equivalents                                            $2,354,612       $8,397,420
 Restricted cash                                                           3,977            4,946
 Other current assets                                                    223,688          183,696
                                                                     -----------      -----------
   Total current assets                                                2,582,277        8,586,062

Investment in property:
 Land                                                                  7,293,367        7,511,167
 Buildings and improvements                                           23,651,855       24,094,055
                                                                     -----------      -----------
                                                                      30,945,222       31,605,222
 Less:    accumulated depreciation                                   (7,752,034)      (7,165,026)
                                                                     -----------      -----------
                                                                      23,193,188       24,440,196

Long-term restricted cash                                                 55,155           44,659
Deferred expenses, net of accumulated
 amortization of $734,423 in 1996 and
 $604,967 in 1995                                                      1,299,103          534,527
                                                                     -----------      -----------
   Total assets                                                      $27,129,723      $33,605,444
                                                                     ===========      ===========

                     LIABILITIES AND PARTNERS' EQUITY
Current liabilities:
 Accounts payable and accrued expenses                                  $591,634         $282,398
 Accounts payable to affiliates                                           57,682           60,360
                                                                     -----------      -----------
   Total current liabilities                                             649,316          342,758

Partners' equity/(deficit):
 General Partner's deficit                                             (215,302)        (200,634)
 Limited Partners' equity                                             26,695,709       33,463,320
                                                                     -----------      -----------
   Total partners' equity                                             26,480,407       33,262,686
                                                                     -----------      -----------
   Total liabilities and partners' equity                                $27,129,723  $33,605,444
                                                                     ===========      ===========
</TABLE>

                    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            Nine Months Ended
                                               September 30,                 September 30,
                                              1996           1995           1996           1995
                                              ----           ----           ----           ----
<S>                                           <C>            <C>            <C>            <C>
Income:
  Rental income                             $619,709       $731,426     $1,887,993     $2,300,071
  Interest income                             36,171         43,740        151,346        128,748
  Other income                                     -         82,008              -         82,008
                                           ---------      ---------     ----------     ----------
   Total income                              655,880        857,174      2,039,339      2,510,827

Expenses:

  Depreciation                               195,670        237,951        587,008        713,853
  Property operating expenses                 67,337        133,696        260,032        361,319
  General and administrative expenses         55,269         46,390        163,161        160,816
  Amortization of deferred expenses           48,271         35,030        129,456        100,005
  Management fee                              18,903         20,985         57,716         62,955
  Property write-down                              -              -        660,000              -
                                           ---------      ---------     ----------     ----------
   Total expenses                            385,450        474,052      1,857,373      1,398,948
                                           ---------      ---------     ----------     ----------
   Net income                               $270,430       $383,122       $181,966     $1,111,879
                                           =========      =========     ==========     ==========

Allocation of net income:

  General Partner                             $2,704         $3,831         $1,819        $11,119
  John Hancock Limited Partner              (17,349)       (19,477)       (52,045)       (58,431)
  Investors                                  285,075        398,768        232,192      1,159,191
                                           ---------      ---------     ----------     ----------
                                             270,430       $383,122        181,966     $1,111,879
                                           =========      =========     ==========     ==========

Net income per Unit                            $3.11          $4.35          $2.53         $12.65
                                           =========      =========     ==========     ==========
</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, 1996 and
                       Year Ended December 31, 1995

<TABLE>
<CAPTION>
                                                      General         Limited
                                                      Partner         Partners           Total
                                                      -------         --------           -----
<S>                                                     <C>             <C>               <C>
Partners' equity/(deficit) at January 1, 1995
 (91,647 Units outstanding)                         ($193,008)       $34,218,306      $34,025,298

Less:     Cash distributions                          (23,143)       (2,291,175)      (2,314,318)

Add:      Net income                                    15,517         1,536,189        1,551,706
                                                      --------       -----------      -----------

Partners' equity/(deficit) at December 31, 1995
 (91,647 Units outstanding)                          (200,634)        33,463,320       33,262,686

Less:     Cash distributions                          (16,487)       (6,947,758)      (6,964,245)

Add:      Net income                                     1,819           180,147          181,966
                                                      --------       -----------      -----------

Partners' equity/(deficit) at September 30, 1996
 (91,647 Units outstanding)                         ($215,302)       $26,695,709      $26,480,407
                                                      ========       ===========      ===========
</TABLE>




















                    See Notes to Financial Statements

                                    5
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                         STATEMENTS OF CASH FLOWS
                               (Unaudited)
<TABLE>
<CAPTION>
                                                                          Nine Months Ended
                                                                            September 30,
                                                                         1996             1995
                                                                         ----             ----
<S>                                                                      <C>              <C>
Operating activities:
 Net income                                                             $181,966       $1,111,879

 Adjustments to reconcile net income to net
 cash provided by operating activities:
   Depreciation                                                          587,008          713,853
   Amortization of deferred expenses                                     129,456          100,005
   Property write-down                                                   660,000                -
                                                                      ----------       ----------
                                                                       1,558,430        1,925,737
 Changes in operating assets and liabilities:
   Increase in restricted cash                                           (9,527)          (2,169)
   Increase in other current assets                                     (39,992)        (127,292)
   Increase in accounts payable and accrued
     expenses                                                            309,236          136,898
   (Decrease)/increase in accounts payable to
     affiliates                                                          (2,678)            5,489
                                                                      ----------       ----------
      Net cash provided by operating activities                        1,815,469        1,938,663

Investing activities:
 Increase in deferred expenses                                         (894,032)        (147,345)
                                                                      ----------       ----------
      Net cash used in investing activities                            (894,032)        (147,345)

Financing activities:
 Cash distributed to Partners                                        (6,964,245)      (1,735,737)
                                                                      ----------       ----------
      Net cash used in financing activities                          (6,964,245)      (1,735,737)
                                                                      ----------       ----------
      Net (decrease)/increase in cash and
        cash equivalents                                             (6,042,808)           55,581

      Cash and cash equivalents at
        beginning of year                                              8,397,420        3,124,999
                                                                      ----------       ----------
      Cash and cash equivalents at
        end of period                                                 $2,354,612       $3,180,580
                                                                      ==========       ==========
</TABLE>



                    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, 1996, 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 4,205 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
   -------------------------------
     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, 1996
     are not necessarily indicative of the results that may be expected for
     the year ending December 31, 1996.  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, 1995.

     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, and has been designated as current or long-
     term, based upon the terms of the related lease agreements.

     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.

     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.









                                    8
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                NOTES TO FINANCIAL STATEMENTS (Continued)
                               (Unaudited)

2. Significant Accounting Policies (continued)
   -------------------------------
     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.


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.

     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.

                                    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 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.


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, 1996    December 31, 1995
                                                           ------------------    -----------------
<S>                                                               <C>                   <C>
       1300 North Dutton Avenue Office Complex                   $2,835,779          $2,835,779
       Marlboro Square Shopping Center                            2,523,643           3,183,643
       Crossroads Square Shopping Center                         12,266,920          12,266,920
       Carnegie Center Office/Warehouse                           6,844,991           6,844,991
       Warner Plaza Shopping Center                               6,473,889           6,473,889
                                                                -----------         -----------
               Total                                            $30,945,222         $31,605,222
                                                                ===========         ===========
</TABLE>
     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.

     On June 30, 1996, the Partnership reduced the carrying value of the
     Marlboro Square Shopping Center property by $660,000.






                                    11
<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, 1996   December 31, 1995
              -----------                                  ------------------   -----------------
                  <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.                 $26,768            $42,829

       $1,427,554 of tenant improvements.  These amounts
       are amortized over the terms of the leases to which
       they relate.                                                  896,311            256,271

       $491,478 of lease commissions.  These amounts
       are amortized over the terms of the leases to which
       they relate.                                                  376,024            235,427
                                                                  ----------         ----------
                                                                  $1,299,103           $534,527
                                                                  ==========         ==========
</TABLE>

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,
                                                1996             1995
                                                ----             ----
       Reimbursement for operating
          expenses                          $123,126          $112,299
       Partnership management fee
          expense                             57,716            62,955
                                            --------          --------
                                            $180,842          $175,254
                                            ========          ========

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


                                    12
<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 (continued)
   ----------------------------------------------------
     Accounts payable to affiliates represents amounts due to the General
     Partner or its affiliates for various services provided to the
     Partnership.

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

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,
                                                                       1996             1995
                                                                       ----             ----
       <S>                                                            <C>              <C>
       Net income per Statements of Operations                       $181,966        $1,111,879

       Add/(deduct):     Excess of tax depreciation
                           over book depreciation                    (65,307)          (36,500)
                         Excess of book amortization
                           over tax amortization                       88,436            51,852
                         Reduction of property's
                           carrying value                             660,000                 -
                                                                     --------        ----------

       Net income for federal income tax purposes                    $865,095        $1,127,231
                                                                     ========        ==========
</TABLE>

















                                    13
<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.

Liquidity and Capital Resources
-------------------------------
At September 30, 1996, the Partnership had $2,354,612 in cash and cash
equivalents, $3,977 in restricted cash and $55,155 in long-term restricted
cash.

The Partnership has established a working capital reserve with a current
balance of approximately 3.5% 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, 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 further 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.

During the nine months ended September 30, 1996, cash from working capital
reserves was used for the payment of leasing costs in the amount of
$894,032 incurred at the 1300 North Dutton Avenue, Carnegie Center,
Marlboro Square and Crossroads Square properties.  The General Partner
estimates that the Partnership will incur approximately $74,000 of
additional leasing costs at the Carnegie Center and Crossroads Square
properties during the remainder of 1996.  The General Partner anticipates
that the current balance in the working capital reserve will be sufficient
to pay such costs.

During the nine months ended September 30, 1996, approximately $67,000 of
cash from operations was used to fund non-recurring maintenance and repair
expenses incurred at the Marlboro Square, Crossroads Square, Carnegie
Center and Warner Plaza properties.  The General Partner estimates that the
Partnership will incur additional non-recurring repair and maintenance
expenses of approximately $24,000 at the Warner Plaza and Carnegie Center
properties during the remainder of 1996.  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.



                                    14
<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)
-------------------------------
Cash in the aggregate amount of $6,964,245 was distributed to the Partners
during the nine months ended September 30, 1996.  Of this amount,
$1,648,719 was generated from Distributable Cash from Operations (defined
in the Partnership Agreement), and $5,315,526 was generated from
Distributable Cash from Sales or Financings (defined in the Partnership
Agreement).  These amounts were distributed in accordance with the
Partnership Agreement and were allocated as follows:

                            From Distributable      From Distributable
                                Cash From               Cash From
                                Operations         Sales or Financings
                                ----------         -------------------
Investors                       $1,632,232               $4,582,350
John Hancock Limited Partner             -                  733,176
General Partner                     16,487                        -
                                ----------               ----------
     Total                      $1,648,719               $5,315,526
                                ==========               ==========

The amount distributed to Investors from Distributable Cash from Operations
during the nine months ended September 30, 1996 represented a 5% annualized
return on Investors' Invested Capital.



























                                    15
<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,
1996:
<TABLE>
<CAPTION>
                           1300 North     Marlboro Sq.  Crossroads Sq.    Carnegie      Warner Pl.
                          Dutton Ave.    Shopping Ctr.  Shopping Ctr.      Center     Shopping Ctr.
                          -----------    -------------  -------------      ------     -------------
<S>                           <C>             <C>            <C>            <C>            <C>
Square Feet                    24,120          42,150       174,196        128,059         92,848

Occupancy at
  January 1, 1996                  0%             69%           93%            56%           100%
                                  ===            ====          ====           ====           ====

New Leases                         0%             20%            0%             8%             0%

Lease Renewals                     0%              0%            5%            11%             0%

Leases Expired                     0%              4%            0%             0%             0%

Occupancy at
 September 30, 1996                0%             85%           93%            64%           100%
                                  ===            ====          ====           ====           ====
Leases Scheduled to
Expire, Balance of 1996            0%             22%            0%             0%             0%
                                  ===            ====          ====           ====           ====
Leases Scheduled to
Commence, Balance of 1996        100%              7%            0%             0%             0%
                                  ===            ====          ====           ====           ====
</TABLE>
The tenant that had leased all of the rentable space at the 1300 North
Dutton Avenue property did not renew its lease and vacated its space when
its lease expired on January 31, 1995.  During July 1996, the General
Partner entered into a lease on behalf of the Partnership with a new
tenant, Union Oil Company of California, to take occupancy of the entire
property.  The lease, which commenced in October 1996, is for a five-year
term with a base rent of approximately $355,000 for the first lease year.
The Partnership incurred approximately $650,000 in leasing costs in
connection with this lease during the third quarter of 1996.

The General Partner anticipates that absorption of existing retail space in
the Marlboro, Massachusetts area will remain sluggish during the remainder
of 1996 based upon both the lack of demand and the increase in retail space
in the area.  This increase in retail space is due to a new retail
development near to the Marlboro Square property which commenced operations
during August 1996.  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.

                                    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 (continued)

Liquidity and Capital Resources (continued)
-------------------------------
During 1994, a tenant that had occupied 45% of the Carnegie Center property
did not renew its leases upon their expirations and, as a result, the
property's occupancy declined to 35%.  Carnegie Center's occupancy at
September 30, 1996, and as of the date hereof, is 64%.  The General Partner
continues to actively seek new tenants for the remaining 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.

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 current favorable real estate market conditions in the area where
Crossroads Square is located, the General Partner did not agree to a
reduced rental amount.  This tenant has since recommenced paying its rent,
but it remains two months in arrears on its past due rental obligations.
The General Partner will pursue full collection of this past due rental
amount and any future rental obligations not met by this tenant.

A tenant at the Warner Plaza property with a lease for approximately 13,000
square feet, or 14% of the property, vacated its space during August 1996.
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.  The Partnership continues to
receive all rental payments due under this tenant's lease.

The General Partner believes that, based upon each property's current
occupancy and tenant mix as well as the current real estate market
conditions in the areas in which these properties are located, the
Crossroads Square and Warner Plaza properties should provide the
Partnership with stable income performance during the remainder of 1996.















                                    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 (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, has
contributed to the decline in this property's value.  The General Partner
evaluated Marlboro Square's net book value at September 30, 1996 in
comparison to the estimated future undiscounted cash flows and determined
that no further impairment in value exists and, therefore, an additional
write-down in value was not required as of September 30, 1996.  The
Partnership's cumulative investment in the property, before accumulated
depreciation and write-downs, is approximately $5,254,000.

During the third quarter of 1996, the General Partner had the Carnegie
Center property independently appraised.  Based upon the appraiser's
investigation and analysis, the property's market value is estimated to be
approximately $3,800,000 as of September 30, 1996.  The net book value of
the Carnegie Center property of approximately $4,858,000 at September 30,
1996 was evaluated in comparison to its estimated future undiscounted cash
flows and the independent appraisal, and, based upon such evaluation, the
General Partner determined that no permanent impairment in value existed
and that a write-down in value was not required at September 30, 1996.  The
Partnership's cumulative investment in the property, before accumulated
depreciation and write-downs, is approximately $6,961,000.

The General Partner evaluated the carrying value of each of the
Partnership's properties as of December 31, 1995 by comparing such value to
the respective property's future undiscounted cash flows and the then most
recent internal appraisal.  Based on such evaluations, the General Partner
determined that no permanent impairment in values existed with respect to
these properties as of December 31, 1995 and, therefore, no 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.






                                    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)

Results of Operations
---------------------
Net income for the nine months ended September 30, 1996 was $181,966, as
compared to net income of $1,111,879 for the same period in 1995.  This
decrease in net income is primarily due to the write-down in the value of
the Marlboro Square Shopping Center property during 1996 and the sale of
the J.C. Penney Credit Operations Center property ("J.C. Penney") on
December 29, 1995.  Excluding this write-down in 1996 and the net income
generated by J.C. Penney during the period in 1995, net income increased by
8% between periods primarily due to increases in the performance of the
Carnegie Center, Warner Plaza and Crossroads Square properties.  These
increases were partially offset by declines in the performance of the 1300
North Dutton Avenue and Marlboro Square properties.

Average occupancy for the Partnership's investments was as follows:
                                                       Nine Months Ended
                                                         September 30,
                                                        1996         1995
                                                        ----         ----
   1300 North Dutton Avenue Office Complex                0%         11%
   Marlboro Square Shopping Center                       79%         73%
   Crossroads Square Shopping Center                     93%         94%
   Carnegie Center Office/Warehouse                      60%         45%
   Warner Plaza Shopping Center                         100%         99%

Rental income for the nine months ended September 30, 1996 decreased by
$412,078, or 18%, as compared to the same period in 1995.  This decrease is
primarily due to the sale of J.C. Penney.  Excluding the rental income
generated by J.C. Penney during this period in 1995, rental income was
consistent between periods.  Rental income did, however, increase by 42% at
Carnegie Center between periods primarily due to an increase in average
occupancy.  This increase was partially offset by decreases in rental
income at the 1300 North Dutton Avenue and Marlboro Square properties.
Rental income at 1300 North Dutton Avenue decreased due to the expiration
on January 31, 1995 of the lease held by the sole tenant at the property.
Rental income at Marlboro Square decreased by 18% between periods primarily
due to a significant reduction in the rental rate paid by the anchor tenant
at the property.  Rental income also decreased at Marlboro Square due to a
decline in rental rates on leases executed during 1995.  Rental income at
the Crossroads Square and Warner Plaza properties was consistent between
periods.

Interest income for the nine months ended September 30, 1996 increased by
$22,598, or 18%, as compared to the same period in 1995.  This increase was
primarily due to the interest earned on the net sales proceeds received
from the sale of J.C. Penney on December 29, 1995.  The Partnership
distributed the majority of such net sales proceeds in February 1996.




                                    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)

Results of Operations (continued)
---------------------
During the nine months ended September 30, 1995, the Partnership received
approximately $82,000 from the former tenant at the 1300 North Dutton
Avenue property because of alterations it made to the property without the
consent of the General Partner, as required under the terms of its lease
agreement.

Depreciation expense for the nine months ended September 30, 1996 decreased
by $126,845, or 18%, as compared to the same period 1995.  This decrease is
primarily due to the sale of J.C. Penney.

The Partnership's share of property operating expenses for the nine months
ended September 30, 1996 decreased by $101,287, or 28%, as compared to the
same period in 1995 primarily due to decreases in its share of property
operating expenses at each of the Partnership's properties.  The
Partnership's share of property operating expenses decreased at the
Marlboro Square and Carnegie Center properties primarily due to increases
in average occupancy at these properties during 1996 and, therefore,
increases in tenant reimbursements collected for such expenses. The
Partnership's share of property operating expenses decreased further at the
Carnegie Center as well as the Crossroads Square and Warner Plaza
properties due to certain non-recurring maintenance and repair expenses
incurred at each property during the period in 1995.  The Partnership's
share of property operating expenses decreased at the 1300 North Dutton
Avenue primarily due to a refund of prior years' real estate taxes which is
included in the 1996 results.

Amortization of deferred expenses for the nine months ended September 30,
1996 increased by $29,451, or 29%, as compared to the same period in 1995.
This increase is primarily due to leasing activity which occurred at the
Partnership's properties during both 1995 and the nine month period ended
September 30, 1996, and the amortization of the related leasing costs.

Management fee expense for the nine months ended September 30, 1996
decreased by $5,239, or 8%, as compared to the same period in 1995.  This
decrease was due to a decline in Cash from Operations (defined in the
Partnership Agreement) between periods primarily resulting from the sale of
J.C. Penney.

The General Partner determined that the value of the Marlboro Square
Shopping Center property had been permanently impaired as of June 30, 1996.
As a result, Marlboro Square's carrying value was reduced by $660,000 at
June 30, 1996 and this amount was charged directly to operations.

The General Partner believes that inflation has had no significant impact
on the Partnership's operations during the nine months ended September 30,
1996, and the General Partner anticipates that inflation will not have a
significant impact during the remainder of 1996.


                                    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)

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,
                                                                    1996                1995
                                                                    ----                ----
<S>                                                                  <C>                 <C>
Net cash provided by operating activities (a)                      $1,815,469          $1,938,663
Net change in operating assets and liabilities (a)                  (257,039)            (12,926)
                                                                   ----------          ----------
Cash provided by operations (a)                                     1,558,430           1,925,737
Increase in working capital reserves                                        -           (190,000)
Add:    Accrual basis Partnership
        management fee                                                 57,716              62,555
                                                                   ----------          ----------
Cash from operations (b)                                            1,616,146           1,798,692
Decrease in working capital reserves                                   32,895                   -
Less:   Accrual basis Partnership
        management fee                                               (57,716)            (62,955)
                                                                   ----------          ----------
Distributable cash from operations (b)                             $1,591,325          $1,735,737
                                                                   ==========          ==========

Allocation to General Partner                                         $15,913             $17,358
Allocation to John Hancock Limited Partner                                  -                   -
Allocation to Investors                                             1,575,412           1,718,379
                                                                   ----------          ----------
Distributable cash from operations (b)                             $1,591,325          $1,735,737
                                                                   ==========          ==========
</TABLE>
(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 1996, the Partnership expects to make a cash
distribution of $515,973, representing a 5% annualized return, to all
Investors of record at September 30, 1996, based on Distributable Cash from
Operations for the quarter then ended. The General Partner currently
anticipates that the Partnership's Distributable Cash from Operations
during the fourth quarter of 1996 will be comparable to that generated
during each of the first three quarters of 1996.

                                    21
<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.
          
          The General Partner believes the allegations are totally without
          merit and intends to vigorously contest the action.
          
          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.
          
Item 2.   Changes in Securities

          There were no changes in securities during the third quarter of
          1996.

Item 3.   Defaults Upon Senior Securities

          There were no defaults upon senior securities during the third
          quarter of 1996.

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 1996.

Item 5.   Other information

Item 6.   Exhibits and Reports on Form 8-K

          (a)    There are no exhibits to this report.
          (b)    There were no Reports on Form 8-K filed during the third
                 quarter of 1996.


                                       22
<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, 1996.


                           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)