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

                                   FORM 10-K

(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
                          -----------------
                                      OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from               to 
                               -------------    -------------            
Commission file number 0-14332
                       -------

                          BALCOR PENSION INVESTORS-VI
            ------------------------------------------------------
            (Exact name of registrant as specified in its charter)

           Illinois                                      36-3319330
-------------------------------                      ------------------- 
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                       Identification No.)

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

Registrant's telephone number, including area code (847) 267-1600
                                                   --------------
Securities registered pursuant to Section 12(b) of the Act:  None
                                                             ----
Securities registered pursuant to Section 12(g) of the Act:

                         Limited Partnership Interests
                         -----------------------------
                               (Title of class)

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 [   ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ X ]
<PAGE>
                                    PART I

Item 1.  Business
-----------------

Balcor Pension Investors-VI (the "Registrant") is a limited partnership formed
in 1984 under the laws of the State of Illinois. The Registrant raised
$345,640,500 from sales of Limited Partnership Interests. The Registrant's
operations currently consist of the operation of properties acquired through
foreclosure, and all information included in this report relates to this
industry segment.

The Registrant originally funded thirty-one loans. A portion of the Mortgage
Reductions generated by loan repayments was added to the Registrant's working
capital reserves and the remainder was distributed to Limited Partners. As a
result of the repayments, foreclosures and write-off of thirty-one loans, the
Registrant had no loans in its portfolio as of December 31, 1996. Prior to
1996, thirteen properties and three investments in joint ventures - affiliates
were acquired through foreclosure and an additional investment in joint
venture-affiliate was purchased. The Registrant sold eight of the properties
and all of the investments in joint ventures-affiliates. The Registrant had
five properties in its portfolio as of December 31, 1996. See "Item 2.
Properties" for additional information.

The Registrant's remaining properties face various levels of competition for
retention of their tenants from similar types of properties in the vicinities
in which they are located. The Registrant has no plans to change the current
use of or to renovate any of its remaining properties.

Real estate values, especially for good quality, well located property,
increased significantly during 1996 due to a combination of readily
available capital, low interest rates, and decreased vacancy rates
resulting from steady demand and an acceptable level of new construction.
While 1996 proved to be an excellent year to sell real estate, projected
yields by buyers on new acquisitions have declined significantly due to
competition and rising prices. Although there will be variances by asset
class and geographic area, the investment climate is expected to remain
strong for 1997. However, values could begin to level off as they approach
replacement cost triggering new construction and an increase in
capitalization rates.

Currently, office properties are attracting the most interest from real
estate investors. While new apartment construction has been underway since
1995, the office sector has just entered its development phase in most
markets and new construction is generally only proceeding with strong
tenant pre-leasing. Occupancy rates are at their highest level in years,
reaching the 90s in a vast number of markets. As a result, rents have
finally begun to increase at rates well in excess of inflation in many
markets around the country. As a result of these fundamentals, office
properties have increasingly become in strong demand by investors. Values
increased significantly during 1996 and are expected to do so again in
1997. Suburban properties are attracting attention as well. Still, office
properties remain a highly volatile sector where one new build-to-suit
office building for a major tenant could throw a market into relapse. In
addition, office space is highly vulnerable to corporate restructuring and
the growing "telecommuting" trend. The Registrant believes the combination
<PAGE>
of strong price increases and future volatility make this an excellent
time to sell office assets.

The outlook for the retail sector of the investment real estate industry is
uncertain for 1997. The retail industry is being simultaneously impacted by a
number of factors which are likely to affect values for quite some time. As
retailers battle to gain market dominance, tenant bankruptcies have grown.
Consolidation among retailers has and is expected to continue to occur. Unlike
other asset classes, new construction of power centers went unabated in the
early 1990's, creating an oversupply of space including "big box" anchor tenant
space. Regional malls, which are not the dominant center in the market, face
continued out-migration of retailers to the power centers. Finally shopping
patterns continue to shift due to the aging baby boomers, high consumer debt,
alternative distribution channels, and the greater emphasis on entertainment.
As a result, the capital requirements necessary to maintain a shopping center's
competitiveness are all significant, but with uncertain returns. The Registrant
believes there is significant risk to holding retail assets for future upside
potential.  

During 1996, the Registrant sold the Hawthorne Heights, Shoal Run, Sun Lake and
Woodscape apartment complexes, and the Perimeter 400 Center and Symphony Woods
office buildings. The 45 West 45th Street Office Building was owned by a joint
venture consisting of the Registrant and three affiliates and the Jonathan's
Landing and Sand Pebble Village - Phases I and II apartment complexes were
owned by joint ventures consisting of the Registrant and an affiliate.  In
1996, the General Partner sold these properties in which the Registrant held a
minority joint venture interest. During February 1997, the Registrant sold the
Park Central Office Building and Flamingo Pines Shopping Center. Currently, the
Registrant has entered into a contract for the sale of the Hammond Aire Plaza
Shopping Center. See "Other Information", below, for additional information.
The Registrant is actively marketing the Brookhollow/Stemmons Center and 420
North Wabash office buildings for sale. 

The timing of the termination of the Registrant and final distribution of cash
will depend upon the nature and extent of liabilities and contingencies which
exist or may arise. Such contingencies may include legal and other fees
stemming from litigation involving the Registrant including, but not limited to
the lawsuit discussed in "Item 3. Legal Proceedings."  In the absence of any
contingency, the reserves will be paid within twelve months of the last
property being sold. In the event a contingency exists, reserves may be held by
the Registrant for a longer period of time.

During 1996, the Registrant sold six properties in all cash sales totaling
$100,625,000 and its interest in an acquisition loan for $3,803,640. In
addition in 1996, the General Partner sold four properties in which the
Registrant held a minority joint venture interest with affiliates in all cash
sales totaling $63,100,000. During February 1997, the Registrant sold the
Flamingo Pines Shopping Center and Park Central Office Building in all cash
sales for $10,200,000 and $21,471,000, respectively. See Other Information and
Item 7. "Liquidity and Capital Resources" for additional information.

The Registrant received notice of an unsolicited offer for the purchase of
Limited Partnership Interests ("tender offer") on January 1, 1997. The tender
offer was made by First Trust Co., L.P. and stated that their primary motive in
making the offer is to make a profit from the purchase of the interests. First
Trust Co., L.P. is seeking to acquire up to 4.9% of the total interests
outstanding of the Registrant. 
<PAGE>
The Registrant received notice of an unsolicited offer for the purchase of
Limited Partnership Interests ("tender offer") on March 6, 1997. The tender
offer was made by Madison Partnership Liquidity Investors XX, LLC and stated
that their primary motive in making the offer is to make a profit from the
purchase of the interests. Madison Partnership Liquidity Investors XX, LLC is
seeking to acquire up to 4.9% of the total interests outstanding of the
Registrant.

The Registrant will incur administrative costs in responding to the tender
offers and may incur additional costs if additional tender offers are made in
the future. The General Partner cannot predict with any certainty what impact
these tender offers or any future tender offers will have on the operations or
management of the Registrant.

The Registrant, by virtue of its ownership of real estate acquired through
foreclosure, is subject to Federal and state laws and regulations covering
various environmental issues. Management of the Registrant utilizes the
services of environmental consultants to assess a wide range of environmental
issues and to conduct tests for environmental contamination as appropriate. The
General Partner is not aware of any potential liability due to environmental
issues or conditions that would be material to the Registrant.

The officers and employees of Balcor Mortgage Advisors-VI, the General Partner
of the Registrant, and its affiliates perform services for the Registrant.  The
Registrant currently has no employees engaged in its operations.

Other Information
-----------------

Park Central Office Building
----------------------------

As previously reported, on January 20, 1997, the Registrant contracted to sell
the Park Central Office Building, De Kalb County, Georgia, to an unaffiliated
party, Acquiport Park Central, Inc., a Delaware corporation, for a sale price
of $21,471,000. The closing was extended and the sale closed on February 20,
1997. From the proceeds of the sale, the Registrant paid $429,420 as a
brokerage commission to an affiliate of the third party providing property
management services for the property and $41,471 in closing costs. The
Registrant received the remaining proceeds of approximately $21,000,000. Of
such proceeds, $1,100,000 will be retained by the Registrant and will not be
available for use or distribution by the Registrant until November 1997.

Flamingo Pines Shopping Center
-------------------------------

As previously reported, on October 31, 1996, the Registrant contracted to sell
the Flamingo Pines Shopping Center, Pembroke Pines, Florida, to an unaffiliated
party, Dane Real Estate, Inc., a Florida corporation, for a sale price of
$10,200,000. The closing was extended and the sale closed on February 28, 1997.
From the proceeds of the sale, the Registrant paid $255,000 as a brokerage
commission to an affiliate of the third party providing management services for
the other properties owned by the Registrant and $91,400 in closing costs.  The
Registrant received the remaining proceeds of approximately $9,854,000.
<PAGE>
Hammond Aire Plaza Shopping Center
----------------------------------

In 1986, the Registrant funded a $22,000,00 loan collateralized by a first
mortgage on the Hammond Aire Plaza Shopping Center, Baton Rouge, Louisiana.
The borrower defaulted on its obligation under the loan and, in September 1987,
the Registrant obtained title to the property through foreclosure.

On March 18, 1997, the Registrant contracted to sell the property for a sale
price of $14,250,000 to an unaffiliated party, Crosstown Asset Corp. I, a
Delaware corporation. The purchaser has deposited $142,500 into an escrow as
earnest money and is obligated to deposit an additional $114,000 upon
completion of the purchaser's due diligence review. The remaining portion of
the sale proceeds will be payable in cash at the closing, which is scheduled to
occur on April 30, 1997. From the proceeds of the sale, the Registrant will pay
$356,250 as a brokerage commission to an affiliate of the third party providing
property management services for the property. The Registrant will receive the
remaining proceeds of approximately $13,894,000, less closing costs. Of such
proceeds, $712,500 will be retained by the Registrant and will not be available
for use or distribution by the Registrant until November 30, 1997. Neither the
General Partner not any affiliate will receive a brokerage commission in
connection with the sale of the property. The General Partner will be
reimbursed by the Registrant for actual expenses incurred in connection with
the sale.

Affiliates of the Registrant have simultaneously contracted to sell four other
properties to the purchaser.

The closing is subject to the satisfaction of numerous terms and conditions.
There can be no assurance that all of the terms will be complied with and,
therefore, it is possible the sale of the property may not occur.

Item 2.  Properties
-------------------

As of December 31, 1996, the Registrant, either directly or though joint
ventures, owned the five properties described below, all of which are owned in
fee simple.

Location                     Description of Property
--------                     -----------------------
Baton Rouge, Louisiana       Hammond Aire Plaza Shopping Center: a regional
                             shopping center containing approximately 276,000
                             square feet located on approximately 34 acres.

DeKalb County, Georgia     **Park Central Office Building: a ten story office
                             building containing approximately 210,000 square
                             feet.

Dallas, Texas              * Brookhollow/Stemmons Center Office Complex: an 11
                             story office building containing approximately
                             221,000 square feet.

Pembroke Pines, Florida    **Flamingo Pines Shopping Center: a regional
                             shopping center containing approximately 124,500
                             square feet located on approximately 16 acres.
<PAGE>
Chicago, Illinois            420 North Wabash Office Building: a 7-story
                             office building containing approximately 120,000
                             square feet.

* Owned by the Registrant through a joint venture with an affiliate. See Note 9
of Notes to Financial Statements for additional information.

** This property was sold during February 1997. See Note 17 of Notes to
Financial Statements for additional information.

The average occupancy rates and effective average rent per square foot for each
of the last five years for the five commercial properties owned by the
Registrant at December 31, 1996, are described below.

                       1996        1995       1994        1993       1992
                       ----        ----       ----        ----       ----
Hammond Aire
  Occupancy rate        91%         91%         96%        92%        94%
  Effective rent       $8.12       $8.47       $7.67      $7.37      $7.00
Park Central
  Occupancy rate        96%         88%         97%        95%        97%
  Effective rent       $14.69      $15.72     $15.19      $15.58     $12.59
Brookhollow/Stemmons
  Occupancy rate        89%         89%         96%        94%        85%
  Effective rent       $10.40      $11.17      $9.44      $11.24     $11.01
Flamingo Pines
  Occupancy rate        83%         92%         97%        94%        94%
  Effective rent       $10.63      $11.15      $9.47      $9.07      $9.02
420 N. Wabash
  Occupancy rate        91%         84%         85%        85%        71%
  Effective rent       $16.28      $15.97     $14.34      $17.36     $16.98


Information regarding tenants occupying 10% or more of the leasable square feet
of each commercial property is provided below.

                                              Scheduled
                                                Lease     Lease
                           Square  Base Rent Expiration  Renewal
  Property      Tenant      Feet   Per Annum    Date     Option
Flamingo     Publix        55,000   $330,000   9/2006      Yes
Pines        Supermarket
             (Grocery
             Store)

420 North    Just B'Claws  18,900   $371,385   5/2009      No
Wabash       (Restaurant)
             TMP Worldwide 23,504   $130,911   4/2001      No
             (Advertising/
             Marketing)
             WM Gerard     19,629   $351,991   12/1999     No
             (Advertising/
             Marketing)
<PAGE>
             Erikson       19,709   $292,349   7/2003      Yes
             Institute
             (Training
             Facility)

Hammond Aire Steinmart,    40,000   $230,000   1/2008      Yes
             Inc.
             (Discount
             Clothing
             Store)
             Taylor Office 32,723   $123,600   12/1997     Yes
             Supply
             (Office
             Supplies &
             Furniture)
Park Central United        60,547   $983,889   12/2003     Yes
             Healthcare
             Corporation
             (Health Care
             - HMO)

Brookhollow/ United States 71,927   $600,000   11/2003     No
Stemmons     Postal
             Service (Post
             Office)

Real estate taxes incurred in 1996 for the above properties totaled $1,141,029.

The Federal tax basis of the Registrant's properties totaled $84,075,494 as of
December 31, 1996. For Federal income tax purposes, the acquisition costs of
the properties are depreciated over a useful life of 40 years, using the
straight-line method. Other minor assets are depreciated over their applicable
recovery periods.

In the opinion of the General Partner, the Registrant has provided for adequate
insurance coverage for its real estate properties.

See Notes to Financial Statements for other information regarding real property
investments.

Item 3.  Legal Proceedings
--------------------------

Williams class action
---------------------

In February 1990, a proposed class-action complaint was filed, Paul Williams
and Beverly Kennedy, et al. vs. Balcor Pension Investors, et al., Case No.:
90-C-0726, U.S. District Court, Northern District of Illinois). The Registrant,
the General Partner, seven affiliated limited partnerships (together with the
Registrant, the "Related Partnerships") and other affiliates were the
defendants. The complaint alleged violations of Federal securities laws as to
the adequacy and accuracy of disclosure of information in the offering of
limited partnership interests in the Related Partnerships and alleged breach of
fiduciary duty, fraud, negligence and violations under the Racketeer Influenced
and Corrupt Organizations Act. The complaint sought compensatory and punitive
damages. 
<PAGE>
A settlement of these proceedings was approved by the District Court on
November 20, 1996 on the terms previously described in the form of settlement
agreement attached as Exhibit 99 to the Registrant's Report on Form 10-Q for
the quarter ended June 30, 1996. Distributions to be paid pursuant to the
settlement were paid in February 1997. All proceedings relating to this matter
are now dismissed.

Proposed Class and Derivative Action Lawsuits
---------------------------------------------

On June 14, 1996, a proposed class and derivative action complaint was filed,
Dee vs. Walton Street Capital Acquisition II, LLC (Circuit Court of Cook
County, Illinois, County Department, Chancery Division ("Chancery Court"), Case
No. 96 CH 06283) (the "Dee Case"), naming the General Partner and the general
partners (the Balcor Defendants") of nine other limited partnerships sponsored
by The Balcor Company (together with the Registrant, the "Affiliated
Partnerships"), as well as the Affiliated Partnerships, as defendants.
Additional defendants were Insignia Management Group ("Insignia") and Walton
Street Capital Acquisition II, LLC ("Walton") and certain of their affiliates
and principals (collectively, the "Walton and Insignia Defendants"). The
complaint alleged, among other things, that the tender offers for the purchase
of limited partnership interests in the Affiliated Partnerships made by a joint
venture consisting of affiliates of Insignia and Walton were coercive and
unfair.

On July 1, 1996, another proposed class action complaint was filed in the
Chancery Court, Anderson vs. Balcor Mortgage Advisors (Case No. 96 CH 06884)
(the "Anderson Case"). An amended complaint consolidating the Dee and Anderson
Cases (the "Dee/Anderson Case") was filed on July 25, 1996.

The complaint seeks to assert class and derivative claims against the Walton
and Insignia Defendants and alleges that, in connection with the tender offers,
the Walton and Insignia Defendants misused the Balcor Defendants' and
Insignia's fiduciary positions and knowledge in breach of the Walton and
Insignia Defendants' fiduciary duty and in violation of the Illinois Securities
and Consumer Fraud Acts. The plaintiffs amended their complaint on October 8,
1996, adding addition claims. The plaintiffs requested certification as a class
and derivative action, unspecified compensatory damages and rescission of the
tender offers. Each of the defendants filed motions to dismiss the complaint.
On January 7, 1997, the Chancery Court denied the plaintiff's motion for leave
to amend the complaint and dismissed the matter with prejudice.

On February 3, 1997, the plaintiffs filed a Notice of Appeal of the Chancery
Court's order to the Appellate Court of Illinois.

The Balcor Defendants intend to vigorously contest this action. No class has
been certified as of this date. The Registrant believes it has meritorious
defenses to contest the claims. It is not determinable at this time whether or
not an unfavorable decision in this action would have a material adverse impact
on the Registrant.

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

No matters were submitted to a vote of the Limited Partners of the Registrant
during 1996.
<PAGE>
                                    PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder
----------------------------------------------------------------------
Matters
-------

There has not been an established public market for Limited Partnership
Interests and it is not anticipated that one will develop. For information
regarding previous distributions, see "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations-Liquidity and Capital
Resources".

As of December 31, 1996, the number of record holders of Limited Partnership
Interests of the Registrant was 60,394.

Item 6.  Selected Financial Data
--------------------------------

                                      Year ended December 31,                 
                    ----------------------------------------------------------
                       1996        1995        1994        1993        1992   
                    ----------  ----------  ----------  ----------  ----------
Total income       $14,782,470 $16,011,025 $16,696,829 $16,941,268 $18,438,167
Recovery of 
  losses on 
  loans, real
  estate and  
  accrued interest
  receivable         3,351,785  2,465,000        None        None          None
Provision for
  losses on 
  loans, real
  estate and
  accrued interest
  receivable         2,605,562  1,800,000   3,900,000   4,665,000    18,500,000
Income before extra-
  ordinary items    27,120,917  11,582,447 11,040,627  11,817,474       730,590
Net income          26,593,221 11,582,447  11,040,627  11,817,474       730,590
Net income per
  Limited Partner-
  ship Interest          12.89       7.54        7.18        7.69           .48
Total assets       115,792,938176,899,144 190,674,572  240,813,287  242,357,773
Mortgage notes
  payable                 None 15,657,066  15,700,000  21,257,668    21,572,650
Distributions per
  Limited Partner-
  ship Interest (A)      39.04      17.40       39.20        8.00         11.00

(A) These amounts include distributions of original capital of $27.70,$8.80,
$29.20 and $.75 per Limited Partnership Interest for the years 1996, 1995, 1994
and 1992, respectively.
<PAGE>
Item 7.  Management's Discussion and Analysis of Financial Condition and
--------------------------------------------------------------------------
Results of Operations
---------------------

Operations
----------

Summary of Operations
---------------------
During 1996, Balcor Pension Investors - VI (the "Partnership") sold six
properties and its minority joint venture interest in four properties. As a
result of the gains recognized for financial statement purposes in connection
with these sales, net income increased significantly during 1996 as compared to
1995. 

During 1995, operations improved at several of the properties owned by the
Partnership and the Partnership recognized a recovery for losses related to its
to its real estate held for sale. The Partnership also recognized lower net
interest income on loans and participation income during 1995 as compared to
1994 due to two loan prepayments in 1994. As a result of these combined events,
net income increased slightly during 1995 as compared to 1994. Further
discussion of the Partnership's operations is summarized below.
 
1996 Compared to 1995
---------------------

The July 1995 foreclosure of the Jonathan's Landing Apartments loan and the
August 1996 sale of the Noland Fashion Square acquisition loan resulted in a
decrease in interest income on loans receivable and income from investment in
acquisition loan during 1996 as compared to 1995. 

Income from operations of real estate held for sale represents the net
operations of the properties acquired by the Partnership through foreclosure.
As of December 31, 1996, the Partnership was operating five properties.
Original funds advanced by the Partnership totals approximately $88,600,000 for
these five properties. The Partnership sold the Hawthorne Heights, Woodscape,
Shoal Run and Sun Lake apartment complexes in June, August and September and
November 1996, respectively, and the Symphony Woods and Perimeter 400 Center
office buildings in December 1996. The property sales resulted in a decrease in
income from operations of real estate held for sale during 1996 as compared to
1995.  This decrease was partially offset by an increase in operations at the
Park Central Office Building and Sun Lake Apartments totaling approximately
$930,000.  The increase is attributable to lower tenant related expenditures at
Park Central during 1996 and exterior painting incurred during 1995 at the Sun
Lake Apartments.

Interest income on short-term investments decreased during 1996 as compared to
1995 primarily due to lower average cash balances available for investment in
1996 due to special distributions paid to the Limited Partners in 1995.

Provisions are charged to income when the General Partner believes an
impairment has occurred to the value of its properties or in a borrower's
ability to repay a loan or in the value of the collateral property.
Determinations of fair value are made periodically on the basis of performance
under the terms of the loan agreement and assessments of property operations.
Determinations of fair value represent estimations based on many variables
<PAGE>
which affect the value of real estate, including economic and demographic
conditions. During 1996, the Partnership recognized provisions of $2,252,809,
recoveries of $3,351,785 and a write off of a previously established loss
allowance of $1,386,215 related to its real estate held for sale. The
provisions were recognized to provide for changes in the estimate of the fair
value of the Flamingo Pines and Hammond Aire Plaza shopping centers.  In
addition, in 1996 the Partnership recognized a provision of $352,753 and a
write-off of an allowance of $627,347 related to the Noland Fashion Square
acquisition loan. During 1995, the Partnership recognized a provision of
$1,800,000 and a recovery of $2,465,000 related to its real estate held for
sale. The Partnership did not recognize any provisions during 1995 for its
loans.

In connection with the sale of the Perimeter 400 Center, the Partnership wrote
off the remaining unamortized leasing commissions related to the property which
resulted in an increase in amortization expense during 1996 as compared to
1995. Amortization expense related to a settlement of disputed leasing
commissions at the Perimeter 400 Office Building contributed to the increase in
amortization expense.   

The Partnership incurred increased legal, consulting, printing, postage and
investor processing costs in connection with its responses to a tender offer
during the second quarter of 1996. As a result, administrative expenses
increased during 1996 as compared to 1995. 

Participation in income (loss) of joint ventures with affiliates represents the
Partnership's share of the operations of the Sand Pebble Village - Phases I and
II and Jonathan's Landing apartment complexes and the 45 West 45th Street
Office Building. During 1996, the Partnership recognized its share of gains
recognized in connection with the sales of the Sand Pebble Village - Phase II
and Jonathan's Landing apartment complexes and the 45 West 45th Street Office
Building, and the recovery of a previously established loss allowance related
to the Sand Pebble Village Apartments - Phase I. During 1995, the Partnership
recognized its share of a provision for loss relating to the 45 West 45th
Street Office Building. The combined effect of these events resulted in the
Partnership recognizing participation in income of joint ventures during 1996
as compared to participation in loss during 1995. 

The Sun Lake Apartments and Perimeter 400 Center Office Building were both
owned by joint ventures with affiliates. As a result of the gain recognized in
connection with the sale of Perimeter 400 Center and the recovery of a
previously established loss allowance related to Sun Lake Apartments,
affiliates' participation in income of joint ventures increased during 1996 as
compared to 1995.

During 1996, the Partnership sold the Hawthorne Heights, Shoal Run, Woodscape
and Sun Lake apartment complexes and the Perimeter 400 Center and Symphony
Woods office buildings. As a result, the Partnership recognized gains in
connection with these sales totaling $19,443,993 for financial statement
purposes.

In connection with the sale of Sun Lake Apartments, the Partnership wrote off
the remaining unamortized deferred financing fees related to the property of
$746,767, of which $284,145 is the minority joint venture partner's share. In
addition, the Partnership incurred its share of a prepayment penalty paid in
connection with the sale of Sand Pebble Village - Phase II Apartments of
<PAGE>
$65,074. These amounts were recognized as debt extinguishment expense and
classified as extraordinary items.

1995 Compared to 1994
---------------------

Interest income on loans receivable decreased during 1995 as compared to 1994
as a result of the 1994 prepayments of the Breckenridge and Highland Green
loans, the dispositions of the Northgate and Gatewood apartment complexes and
the foreclosure of the Jonathan's Landing Apartments loan in July 1995.

Income from operations of real estate held for sale represents the net
operations of the properties acquired by the Partnership through foreclosure.
At December 31, 1995, the Partnership was operating eleven properties. Original
funds advanced by the Partnership totals approximately $145,000,000 for these
properties. Income from operations of real estate held for sale increased
during 1995 as compared to 1994 due to improved operations at nine of the
properties, in particular at the Brookhollow/Stemmons Center Office Complex due
to higher occupancy, at the Woodscape Apartments as the payment of interest
expense ceased due to the repayment of the property's underlying mortgage loan
in May 1994, at the Sun Lake Apartments due to a decrease in interest expense
resulting from the November 1994 remarketing of the underlying revenue bonds
and at the 420 N. Wabash Office Building where real estate tax expense
decreased due to a decrease in the property's assessed value.

The Partnership's loans receivable generally bear interest at contractually-
fixed interest rates. Some loans also provided for additional interest in the
form of participations, usually consisting of either a share in the capital
appreciation of the property securing the Partnership's loan and/or a share in
the increase of gross income of the property above a certain level.
Participation income of $3,000,000 was recognized during 1994 in connection
with loan prepayments.

The Partnership recognized a provision of $3,900,000 during 1994 related to the
Partnership's real estate held for sale to provide for changes in the estimate
of the fair value of certain properties in the Partnership's portfolio. The
Partnership did not recognize any provisions during 1994 related to its loans.

Legal fees incurred in 1994 relating to the disposition of the Partnership's
investment in the Northgate and Gatewood apartment complexes, as well as the
prepayments of the Breckenridge and Highland Green loans, resulted in a
decrease in administrative expenses during 1995 as compared to 1994.

Participation in income (loss) of joint ventures with affiliates represents the
Partnership's share of the operations of the Sand Pebble Village - Phases I and
II and Jonathan's Landing apartment complexes and the 45 West 45th Street
Office Building. The Partnership recognized its share of a provision for loss
relating to the 45 West 45th Street Office Building during 1995. This resulted
in participation in loss of joint ventures with affiliates in 1995 as compared
to participation in income of joint ventures with affiliates in 1994.

During 1994, the Partnership recognized a gain of $818,379 on the disposition
of the Partnership's investment in the Northgate and Gatewood apartment
complexes.
<PAGE>
Liquidity and Capital Resources
-------------------------------

The cash position of the Partnership increased by approximately $41,866,000 as
of December 31, 1996 when compared to December 31, 1995 primarily as a result
of the Partnership's share of the net proceeds received in connection with the
sales of six properties and an acquisition loan. Operating activities generated
cash of approximately $9,795,000, primarily as a result of cash flow from the
operations of the Partnership's properties and interest income earned from
short-term investments and from the Partnership's investment in an acquisition
loan, net of the payment of administrative expenses. Cash received from
investing activities consisted of net proceeds of approximately $3,751,000
received from the sale of the Noland Fashion Square acquisition loan,
distributions of cash flow and sale proceeds from joint venture partners of
approximately $26,516,000, net proceeds of approximately $82,381,000 from the
sales of Hawthorne Heights, Shoal Run, Woodscape and Sun Lake apartment
complexes and the Perimeter 400 Center and Symphony Woods office buildings and
expenditures of approximately $1,479,000 for improvements to the Partnership's
properties. Financing activities consisted of distributions paid to Partners of
approximately $55,869,000, net distributions paid to joint venture partners of
approximately $23,282,000, the release of repair escrows of approximately
$201,000 related to the Sun Lake Apartments and principal payments on the
mortgage note payable of approximately $148,000. In addition, in January 1997
the Partnership made a special distribution of $35,946,612 to Limited Partners
from the net proceeds from the sales of the 45 West 45th Street, Perimeter 400
Center and Symphony Woods office buildings and the Sun Lake and Jonathan's
Landing apartment complexes, all of which occurred during the fourth quarter of
1996.

The Partnership classifies the cash flow performance of its properties as
either positive, a marginal deficit, or a significant deficit, each after
consideration of debt service payments unless otherwise indicated. A deficit is
considered significant if it exceeds $250,000 annually or 20% of the property's
rental and service income. The Partnership defines cash flow generated from its
properties as an amount equal to the property's revenue receipts less property
related expenditures, which include debt service payments. The Sun Lake
Apartments was the Partnership's only property with underlying debt. 

During 1996 and 1995, all five of the Partnership's properties owned at
December 31, 1996, as well as the properties in which the Partnership held
minority joint venture interests with affiliates, generated positive cash flow.
The Hawthorne Heights, Shoal Run, Woodscape and Sun Lake apartment complexes,
and the Perimeter 400 Center and Symphony Woods office buildings also generated
positive cash flow during 1995 and prior to being sold in 1996. The 45 West
45th Street Office Building, in which the Partnership held a minority joint
venture interest and which was sold in November 1996, incurred significant
leasing costs in 1995 and 1996 to lease vacant space and renew existing tenant
leases which were scheduled to expire. These nonrecurring expenditures were not
included in classifying the cash flow performance of the property. Had these
expenditures been included, the property would have generated a significant
deficit in 1995 and a marginal cash flow deficit during 1996. As of December
31, 1996, the occupancy rates of the Partnership's remaining commercial
properties ranged from 89% to 96%, with the exception of the Flamingo Pines
Shopping Center which had an occupancy of 83%.
<PAGE>
During 1996, the Partnership sold the Hawthorne Heights, Woodscape, Shoal Run
and Sun Lake apartment complexes, and the Perimeter 400 Center and Symphony
Woods office buildings. The 45 West 45th Street Office Building was owned by a
joint venture consisting of the Partnership and three affiliates and the
Jonathan's Landing and Sand Pebble Village - Phases I and II apartment
complexes were owned by joint ventures consisting of the Partnership and an
affiliate.  In 1996, the General Partner sold these properties in which the
Partnership held a minority joint venture interest. During February 1997, the
Partnership sold the Flamingo Pines Shopping Center and Park Central Office
Building. Currently, the Partnership has entered into a contract for the sale
of the Hammond Aire Plaza Shopping Center. See "Item 1. Other Information" for
additional information. The Partnership is actively marketing the
Brookhollow/Stemmons Center and 420 North Wabash office buildings for sale.

The timing of the termination of the Partnership and final distribution of cash
will depend upon the nature and extent of liabilities and contingencies which
exist or may arise. Such contingencies may include legal and other fees
stemming from litigation involving the Partnership including, but not limited
to the lawsuit discussed in "Item 3. Legal Proceedings." In the absence of any
contingency, the reserves will be paid within twelve months of the last
property being sold. In the event a contingency exists, reserves may be held by
the Partnership for a longer period of time.

In June 1996, the Partnership sold the Hawthorne Heights Apartments in an all
cash sale for $8,300,000. From the proceeds of the sale, the Partnership paid
$309,525 in selling costs. Pursuant to the terms of the sale, $250,000 of the
proceeds was retained by the Partnership until October 1996. The remaining
proceeds were distributed to the Limited Partners in July 1996. The holdback
was released in full in October 1996. See Note 12 of Notes to Financial
Statements for additional information. 

The Sand Pebble Village Apartments - Phase I was owned by a joint venture
consisting of the Partnership and an affiliate. In August 1996, the joint
venture sold the property in an all cash sale for $19,411,765. From the
proceeds of the sale, the joint venture paid $431,822 in selling costs. The net
proceeds of the sale were $18,979,943, of which $8,470,749 was the
Partnership's share. The proceeds were distributed to the Limited Partners in
October 1996. See Note 10 of Notes to Financial Statements for additional
information.

The Sand Pebble Village Apartments - Phase II was owned by a joint venture
consisting of the Partnership and an affiliate. In August 1996, the joint
venture sold the property in an all cash sale for $12,088,235. From the
proceeds of the sale, the joint venture paid $4,859,155 to the third party
mortgage holder in full satisfaction of the first mortgage loan, paid a
prepayment penalty of $145,775 and selling costs of $272,701. The net proceeds
of the sale were $6,810,604, of which $3,039,573 was the Partnership's share.
The proceeds were distributed to the Limited Partners in October 1996. See Note
10 of Notes to Financial Statements for additional information.

In August 1996, the Partnership sold the Woodscape Apartments in an all cash
sale for $9,550,000. From the proceeds of the sale, the Partnership paid
$299,421 in selling costs. Pursuant to the terms of the sale, $500,000 of the
proceeds was retained by the Partnership until December 1996. The remaining
proceeds were distributed to Limited Partners in October 1996. The holdback was
released in full in December 1996. See Note 12 of Notes to Financial Statements
for additional information.
<PAGE>
The Noland Fashion Square Shopping Center loan had been recorded by the
Partnership as an investment in acquisition loan. The Partnership had recorded
its share of the collateral property's operations as equity in loss from
investment in acquisition loan. The Partnership's share of operations had no
effect on the cash flow of the Partnership, and amounts representing
contractually required debt service were recorded as interest income. In August
1996, the Partnership sold its interest in the Noland Fashion Square
acquisition loan for $3,803,640. From the proceeds of the loan sale, the
Partnership paid $53,058 in selling costs. The proceeds were distributed to the
Limited Partners in October 1996. See Note 6 of Notes to Financial Statements
for additional information.

In September 1996, the Partnership sold the Shoal Run Apartments in an all cash
sale for $10,800,000. From the proceeds of the sale, the Partnership paid
$290,800 in selling costs. The proceeds were distributed to the Limited
Partners in October 1996. See Note 12 of Notes to Financial Statements for
additional information.

The 45 West 45th Street Office Building was owned by a joint venture consisting
of the Partnership and three affiliates. In November 1996, the joint venture
sold the property in an all cash sale for $10,300,000. From the proceeds of the
sale, the joint venture paid $579,075 in selling costs. The net proceeds from
the sale were $9,720,925, of which $4,014,742 was the Partnership's share.
Pursuant to the terms of the sale, $500,000 of the proceeds will be retained by
the joint venture until April 1997. See Note 10 of Notes to Financial
Statements for additional information.

The Sun Lake Apartments was owned by a joint venture consisting of the
Partnership and an affiliate. In November 1996, the joint venture sold the
property in an all cash sale for $24,000,000. The purchaser took title to the
property subject to the existing first mortgage loan of $15,508,832. From the
proceeds of the sale, the joint venture paid $701,215 in selling costs. The net
proceeds of the sale were $7,789,953, of which $4,825,876 was the Partnership's
share. Pursuant to the terms of the sale, $300,000 of the proceeds was retained
by the joint venture until December 1996. The remainder of the proceeds was
distributed to Limited Partners in January 1997.  The holdback was released in
full in December 1996. See Note 12 of Notes to Financial Statements for
additional information. 

The Jonathan's Landing Apartments was owned by a joint venture consisting of
the Partnership and an affiliate. In November 1996, the joint venture sold the
property in an all cash sale for $21,300,000. From the proceeds of the sale,
the joint venture paid $796,475 in selling costs. The net proceeds from the
sale were $20,503,525, of which $9,534,139 was the Partnership's share.  The
proceeds were distributed to Limited Partners in January 1997.  See Note 10 of
Notes to Financial Statements for additional information.

The Perimeter 400 Center Office Building was owned by a joint venture
consisting of the Partnership and three affiliates. In December 1996, the joint
venture sold the property in an all cash sale for $40,700,000. From the
proceeds of the sale, the joint venture paid $882,765 in selling costs. The net
proceeds from the sale were $39,817,235, of which $19,908,618 was the
Partnership's share. Pursuant to the terms of the sale, the Partnership is
required to retain $1,750,000 of the sales proceeds until September 1997.  The
remainder of the proceeds was distributed in to Limited Partners in January
1997. See Note 12 of Notes to Financial Statements for additional information.
<PAGE>
In December 1996, the Partnership sold the Symphony Woods Office Building in an
all cash sale for $7,275,000. From the proceeds of the sale, the Partnership
paid $251,836 in selling costs. The proceeds were distributed to Limited
Partners in January 1997.  See Note 12 of Notes to Financial Statements for
additional information.

In February 1997, the Partnership sold the Park Central Office Building in an
all cash sale for $21,471,000. From the proceeds of the sale, the Partnership
paid $470,891 in selling costs. Pursuant to the terms of the sale, the
Partnership is required to hold back $1,100,000 of the sales proceeds until
November 1997. The remainder of the proceeds is expected to be distributed in
1997.  See Note 17 of Notes to Financial Statements for additional information.

In February 1997, the Partnership sold the Flamingo Pines Shopping Center in an
all cash sale for $10,200,000. From the proceeds of the sale, the Partnership
paid $346,400 in selling costs. The proceeds are expected to be distributed in
1997.  See Note 17 of Notes to Financial Statements for additional information.

The Partnership made four distributions totaling $39.04, $17.40 and $39.20 per
Interest in 1996, 1995 and 1994, respectively. See Statement of Partner's
Capital for additional information. Distributions were comprised of $11.34 of
Cash Flow and $27.70 of Mortgage Reductions, $8.60 of Cash Flow and $8.80 of
Mortgage Reductions in 1995 and $10.00 of Cash Flow and $29.20 of Mortgage
Reductions in 1994. Cash Flow distributions increased in 1996 as compared to
1995 due to the payment of special distributions of $1.34 and $2.00 per
Interest from Cash Flow reserves in July and October 1996, respectively. Cash
Flow distributions decreased in 1995 as compared to 1994 primarily due to loan
prepayments received in 1994. Distributions of Mortgage Reductions increased in
1996 as compared to 1995 due to the property sales.

In January 1997, the Partnership paid a distribution of $38,711,736 ($28.00 per
Interest) to the holders of Limited Partnership Interests. This amount includes
the regular quarterly distribution from Cash Flow of $2.00 per Interest and a
special distribution of Mortgage Reductions of $26.00 per Interest from
proceeds received in connection with the sale of the 45 West 45th Street,
Perimeter 400 Center and Symphony Woods office buildings and the Sun Lake and
Jonathan's Landing apartment complexes, all of which occurred during the fourth
quarter of 1996. The level of the regular quarterly distribution is consistent
with the amount distributed for the third quarter of 1996. Including the
January 1997 distribution, Limited Partners have received cash distributions
totaling $268.36 per $250 Interest. Of this amount, $139.86 represents Cash
Flow from operations and $128.50 represents a return of Original Capital. In
January 1997, the Partnership also paid $230,427 to the General Partner as its
distributive share of the Cash Flow distributed for the fourth quarter of 1996
and made a contribution to the Early Investment Incentive Fund of $76,809. In
February 1997, the General Partner made a settlement payment of $207,384($.15
per $250 Interest) to members of the class pursuant to the settlement approved
by the court in November 1996 in the Paul Williams and Beverly Kennedy et. al.
v. Balcor Pension Investors, et. al. class action lawsuit.  Future
distributions will be made from remaining reserves and proceeds from sales of
the Partnership's remaining properties, as to all of which there can be no
assurances.
<PAGE>
During 1996, the General Partner on behalf of the Partnership used amounts
placed in the Early Investment Incentive Fund to repurchase 16,967 Interests
from Limited Partners at a cost of $1,684,405. In February 1997, the
Partnership discontinued the repurchase of Interests from Limited Partners.

Changing interest rates can impact real estate values in several ways.
Generally, declining interest rates may lower the cost of capital allowing
buyers to pay more for a property whereas rising interest rates may increase
the cost of capital and lower the price of real estate.

Inflation has several types of potentially conflicting impacts on real estate
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents and/or sale prices
depending on general or local economic conditions. In the long-term, inflation
can be expected to increase operating costs and replacement costs and may lead
to increased rental revenues and real estate values.

Certain statements in this Form 10-K constitute "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. These
statements may include projections of revenues, income or losses, capital
expenditures, plans for future operations, financing plans or requirements, and
plans relating to properties of the Partnership, as well as assumptions
relating to the foregoing.

The forward-looking statements made by the Partnership are subject to known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Partnership to differ materially
from any future results, performance or achievements expressed or implied by
the forward-looking statements.

Item 8.  Financial Statements and Supplementary Data
----------------------------------------------------

See Index to Financial Statements in this Form 10-K.

The supplemental financial information specified by Item 302 of Regulation S-K
is not applicable.
<PAGE>
Item 9.  Changes in and Disagreements with Accountants on Accounting and
------------------------------------------------------------------------
Financial Disclosure
--------------------

On September 14, 1995 the Registrant approved the engagement of Coopers &
Lybrand L.L.P. as its independent accountants for the fiscal year ending
December 31, 1995 to replace the firm of Ernst & Young LLP, who were dismissed
as auditors of the Registrant effective September 14, 1995.  The General
Partner of the Registrant approved the change in auditors.

The reports of Ernst & Young LLP on the Registrant's financial statements for
each of the two fiscal years ended December 31, 1994 did not contain an adverse
opinion or a disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope, or accounting principles.

In connection with the audits of the Registrant's financial statements for each
of the two years ended December 31, 1994, and in the subsequent interim period,
there were no disagreements with Ernst & Young LLP on any matters of accounting
principles or practices, financial statement disclosure, or auditing scope and
procedures which, if not resolved to the satisfaction of Ernst & Young LLP
would have caused Ernst & Young LLP to make reference to the matter in their
report.
<PAGE>
                                   PART III

Item 10.  Directors and Executive Officers of the Registrant
------------------------------------------------------------

(a) Neither the Registrant nor Balcor Mortgage Advisors-VI, its General
Partner, has a Board of Directors.

(b, c & e) The names, ages and business experience of the executive officers
and significant employees of the General Partner of the Registrant are as
follows:


               TITLE                              OFFICERS
               -----                              --------
         Chairman, President and Chief         Thomas E. Meador
            Executive Officer
         Senior Vice President                 Alexander J. Darragh
         Senior Vice President                 James E. Mendelson
         Senior Vice President                 John K. Powell, Jr.
         Managing Director, Chief              Jayne A. Kosik
            Financial Officer, Treasurer
            and Assistant Secretary                            


Thomas E. Meador (age 49) joined Balcor in July 1979. He is Chairman,
President and Chief Executive Officer and has responsibility for all ongoing
day-to-day activities at Balcor. He is a Director of The Balcor Company. He
is also Senior Vice President of American Express Company and is responsible
for its real estate operations worldwide. Prior to joining Balcor, Mr.
Meador was employed at the Harris Trust and Savings Bank in the commercial
real estate division where he was involved in various lending activities.
Mr. Meador received his M.B.A. degree from the Indiana University Graduate
School of Business.

Alexander J. Darragh (age 42) joined Balcor in September 1988 and is
responsible for due diligence analysis and real estate advisory services for
Balcor and American Express Company. He also has supervisory responsibility
for Balcor's environmental matters. Mr. Darragh received masters' degrees in
Urban Geography from Queen's University and in Urban Planning from
Northwestern University.

James E. Mendelson (age 34) joined Balcor in July 1984 and is responsible
for Balcor's property sales activities. He also has supervisory
responsibility for Balcor's accounting, financial, treasury, investor
services and investment administration functions. From 1989 to 1995, Mr.
Mendelson was Vice President - Transaction Management and Vice President -
Senior Transaction Manager and had responsibility for various asset
management matters relating to real estate investments made by Balcor,
including negotiations for the restructuring of mortgage loan investments.
Mr. Mendelson received his M.B.A. degree from the University of Chicago. 
<PAGE>
John K. Powell, Jr. (age 46) joined Balcor in September 1985 and is
responsible for portfolio and asset management matters relating to Balcor's
partnerships. Mr. Powell also has supervisory responsibility for Balcor's
risk management function. He received a Master of Planning degree from the
University of Virginia. Mr. Powell has been designated a Certified Real
Estate Financier by the National Society for Real Estate Finance and is a
full member of the Urban Land Institute.

Jayne A. Kosik (age 39) joined Balcor in August 1982 and, as Chief Financial
Officer, is responsible for Balcor's financial, human resources and treasury
functions. From June 1989 until October 1996, Ms. Kosik had supervisory
responsibility for accounting functions relating to Balcor's public and
private partnerships. She is also Treasurer and a Managing Director of The
Balcor Company. Ms. Kosik is a Certified Public Accountant.  

(d) There is no family relationship between any of the foregoing officers.

(f) None of the foregoing officers or employees are currently involved in any
material legal proceedings nor were any such proceedings terminated during the
fourth quarter of 1996.

Item 11.  Executive Compensation
--------------------------------

The Registrant paid $12,170 in 1996 with respect to one of the executive
officers and directors of Balcor Mortgage Advisors-VI, the General Partner.
Certain of the remaining officers receive compensation from The Balcor Company
(but not from the Registrant) for services performed for various affiliated
entities, which may include services performed for the Registrant. The
Registrant has not paid and does not intend to pay any remuneration to the
remaining executive officers and directors of the General Partner. However, the
General Partner believes that any such compensation attributable to services
performed for the Registrant is immaterial to the Registrant. See Note 11 of
Notes to Financial Statements for the information relating to transactions with
affiliates.

Item 12.  Security Ownership of Certain Beneficial Owners and Management
------------------------------------------------------------------------
(a) The following entities are the sole Limited Partners which own beneficially
more than 5% of the outstanding Limited Partnership Interests of the
Registrant.

                    Name and            Amount and
                    Address of          Nature of      Percent 
                    Beneficial          Beneficial     of
Title of Class      Owner               Ownership      Class
----------------    -----------         ----------     ------------
Limited             Walton Street       63,355.14            4.54%
Partnership         Capital Acquisition Limited 
Interests           Co. II, L.L.C.      Partnership
                    Chicago             Interests
                    Illinois

Limited             Beattie             34,115.70            2.44%
Partnership         Place               Limited 
Interests           Greenville,         Partnership
                    South Carolina      Interests
<PAGE>
While Walton Street Capital Acquisition Co. II, L.C.C. and Beattie Place
individually own less than 5% of the Interests, for purposes of this Item 12,
Walton Street Capital Acquisition Co. II, L.L.C. is an affiliate of Beattie
Place and, collectively, they own 6.98% of the Interests.

(b) Balcor Mortgage Advisors-VI and its officers and partners own as a group
through the Early Investment Incentive Fund and otherwise the following Limited
Partnership Interests of the Registrant:

                                  Amount
                               Beneficially
         Title of Class            Owned       Percent of Class
         --------------        -------------   ----------------
         Limited Partnership
         Interests             70,714 Interests       5.1%              


Relatives and affiliates of the officers and partners of the General Partner do
not own any additional interests.

(c) The Registrant is not aware of any arrangements, the operation of which may
result in a change of control of the Registrant.


Item 13.  Certain Relationships and Related Transactions
--------------------------------------------------------

(a & b) See Note 4 of Notes to Financial Statements for information relating to
the Partnership Agreement and the allocation of distributions and profits and
losses.

See Note 11 of Notes to Financial Statements for additional information
relating to transactions with affiliates.

(c) No management person is indebted to the Registrant.

(d) The Registrant has no outstanding agreements with any promoters.
<PAGE>
                                    PART IV


Item 14.  Exhibits and Reports on Form 8-K
------------------------------------------

(a)
(1 & 2) See Index to Financial Statements in this Form 10-K.

(3) Exhibits:

(3) The Amended and Restated Agreement and Certificate of Limited Partnership
previously filed as Exhibit 3 to Amendment No. 1 to the Registrant's
Registration Statement on Form S-11 dated January 14, 1985 (Registration No.
2-93840), is incorporated herein by reference.

(4) Form of Subscription Agreement previously filed as Exhibit 4.1 to Amendment
No. 1 to the Registrant's Registration Statement on Form S-11 dated January 14,
1985 (Registration No. 2-93840) and Form of Confirmation regarding Interests in
the Registrant set forth as Exhibit 4.2 to the Registrant's Report on Form 10-Q
for the quarter ended June 30, 1992 are incorporated herein by reference.

(10) Material Contracts:

(a) Agreement of Sale and attachment thereto relating to the sale of Perimeter
400 Center, Fulton County, Georgia, as previously filed as Exhibit (2) to the
Registrant's Current Report on Form 8-K dated December 2, 1996 is incorporated
herein by reference.

(b)(i) Agreement of Sale and attachment thereto relating to the sale of the
Park Central Office Building, DeKalb County, Georgia, as previously filed as
Exhibit (2) to the Registrant's Current Report on Form 8-K dated December 18,
1996 is incorporated herein by reference.

(b)(ii)  Letter Agreement relating to the sale of the Park Central Office
building, De Kalb County, Georgia, is attached hereto.

(c) Agreement of Sale and attachment thereto relating to the sale of Hammond
Aire Plaza Shopping Center, Baton Rouge, Louisiana, is attached hereto.

(16) Letter from Ernst & Young LLP dated September 19, 1995 regarding the
change in the Registrant's certifying accountant previously filed as Exhibit 16
to the Registrant's Report on Form 8-K/A dated October 27, 1995 is hereby
incorporated herein by reference.

(27) Financial Data Schedule of the Registrant for 1996 is attached hereto.

(c) Exhibits: See Item 14(a)(3) above.

(d) Financial Statement Schedules: None.

(99)(a)(i) Second Amendment to Agreement of Sale relating to the sale of
Flamingo Pines Plaza, Pembroke Pines, Florida, is attached hereto.
 
(99)(a)(ii) Third Amendment to Agreement of Sale relating to the sale of
Flamingo Pines Plaza, Pembroke Pines, Florida, is attached hereto.
<PAGE>
(99)(a)(iii) Fourth Amendment to Agreement of Sale relating to the sale of
Flamingo Pines Plaza, Pembroke Pines, Florida, is attached hereto.
 
(99)(b)  Form of Notice of Proposed Class Action Settlement and Hearing
relating to Paul Williams and Beverly Kennedy, et al. vs. Balcor Pension
Investors, et al. previously filed as Exhibit (99)(b) to the Registrant's
Report on From 10-Q for the quarter ended June 30, 1996 is incorporated herein
by reference.  

(b) Reports on form 8-K:
 
(i) A Current Report on Form 8-K dated December 2, 1996 was filed reporting the
contract to sell the Perimeter 400 Center Office Building in Fulton County,
Georgia, and the closing of the sales of Jonathan's Landing Apartments in Kent,
Washington and the Sun Lake Apartments in Lake Mary, Florida, is incorporated
herein by reference.

(ii) A Current Report on Form 8-K dated December 18, 1996 was filed reporting
the contract to sell the Park Central Office Building in DeKalb County, Georgia
and the closing of the sales of Perimeter 400 Center Office Building in Fulton
County, Georgia and the Symphony Woods Office Building in Columbia, Maryland,
is incorporated herein by reference.
<PAGE>
SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of l934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                         BALCOR PENSION INVESTORS-VI


                         By: /s/Jayne A. Kosik
                             -----------------------------------
                             Jayne A. Kosik
                             Managing Director and Chief Accounting 
                             and Financial Officer (Principal Accounting
                             Officer) of Balcor Mortgage 
                             Advisors-VI, the General Partner

Date: March 28, 1997
      ----------------

Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

       Signature                     Title                       Date    
---------------------    -------------------------------     ------------
                         Executive and Chief Executive
                         Officer (Principal Executive
                         Officer) of Balcor Mortgage
/s/Thomas E. Meador      Advisors-VI, the General Partner   March 28, 1997
---------------------                                       --------------
  Thomas E. Meador

                         Managing Director and Chief Accounting
                         and Financial Officer (Principal 
                         Accounting Officer) of Balcor Mortgage
 /s/Jayne A. Kosik       Advisors-VI, the General Partner   March 28, 1997
--------------------                                        --------------
  Jayne A. Kosik
<PAGE>
                         INDEX TO FINANCIAL STATEMENTS



Report of Independent Accountants

Report of Independent Auditors

Financial Statements:

Balance Sheets, December 31, 1996 and 1995

Statements of Partners' Capital, for the years ended December 31, 1996, 1995
and 1994

Statements of Income and Expenses, for the years ended December 31, 1996, 1995
and 1994

Statements of Cash Flows, for the years ended December 31, 1996, 1995 and 1994

Notes to Financial Statements

Financial Statement Schedules are omitted for the reason that they are
inapplicable or equivalent information has been included elsewhere herein.
Audited Financial Statements for the significant subsidiary investments in
joint ventures are omitted since the properties were sold and the Partnership
is in its liquidation phase.
<PAGE>
                       REPORT OF INDEPENDENT ACCOUNTANTS


To the Partners of
Balcor Pension Investors-VI:

We have audited the accompanying balance sheets of Balcor Pension Investors-VI
(An Illinois Limited Partnership) as of December 31, 1996 and 1995, and the
related statements of partners' capital, income and expenses and cash flows for
each of the two years in the period ended December 31, 1996. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Balcor Pension Investors-VI
(An Illinois Limited Partnership) at December 31, 1996 and 1995, and the
results of its operations and its cash flows for each of the two years in the
period ended December 31, 1996, in conformity with generally accepted
accounting principles. 

As described in Note 2 to the financial statements, the Partnership Agreement
provides for the dissolution of the Partnership upon the disposition of all its
real estate interests. The Partnership is presently marketing for sale its
remaining real estate assets. Upon disposition of its remaining real estate
assets and resolution of the litigation described in Note 14 to the financial
statements, the Partnership intends to cease operations and dissolve.


                                        /s/Coopers & Lybrand L.L.P.

                                        COOPERS & LYBRAND L.L.P.




Chicago, Illinois
March 26, 1997
<PAGE>
                        REPORT OF INDEPENDENT AUDITORS

To the Partners of
Balcor Pension Investors-VI:

We have audited the accompanying statements of partners' capital, income and
expenses and cash flows of Balcor Pension Investors-VI (An Illinois Limited
Partnership) for the year ended December 31, 1994.  These financial statements
are the responsibility of the Partnership's management.  Our responsibility is
to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations and cash flows of Balcor
Pension Investors-VI for the year ended December 31, 1994, in conformity with
generally accepted accounting principles.




                                        /s/Ernst & Young LLP

                                        ERNST & YOUNG LLP





Chicago, Illinois
March 11, 1995
<PAGE>
                          BALCOR PENSION INVESTORS-VI
                       (An Illinois Limited Partnership)

                                BALANCE SHEETS
                          December 31, 1996 and 1995

                                    ASSETS

                                                1996              1995
                                           ---------------   ----------------
Cash and cash equivalents                  $   57,942,543    $    16,076,834
Escrow deposits                                                      557,405
Accounts and accrued interest receivable        2,638,571          2,522,489
Prepaid expenses                                   89,022            283,525
Deferred expenses, net of accumulated
  amortization of $380,456 in 1996 and
  $1,014,165 in 1995                              634,027          1,935,041
                                           ---------------   ----------------
                                               61,304,163         21,375,294
                                           ---------------   ----------------
Investment in loan receivable:
  Investment in acquisition loan                                   4,434,410
Less:
  Allowance for potential loan loss                                  274,594
                                                             ----------------
Net investment in loan receivable                                  4,159,816
Real estate held for sale (net of             
  allowance of $4,814,809 in 1996 and                         
  $7,300,000 in 1995)                          54,282,276        130,149,878
Investment in joint ventures with                             
   affiliates                                     206,499         21,214,156
                                           ---------------   ----------------
                                               54,488,775        155,523,850
                                           ---------------   ----------------
                                           $  115,792,938    $   176,899,144
                                           ===============   ================

                    LIABILITIES AND PARTNERS' CAPITAL 

Accounts payable                           $      926,057    $       763,742
Due to affiliates                                 174,426             51,700
Accrued liabilities, principally              
  real estate taxes                               715,520            808,262
Security deposits                                 256,363            665,005
Mortgage note payable                                             15,657,066
                                           ---------------   ----------------
    Total liabilities                           2,072,366         17,945,775
                                           ---------------   ----------------
Commitments and contingencies
Affiliates' participation in joint<PAGE>
   ventures                                     3,904,307         19,861,816
Limited Partners' capital (1,382,562
  Interests issued and
  outstanding)                                109,967,857        146,274,796
General Partner's deficit                        (151,592)        (7,183,243)
                                           ---------------   ----------------
    Total partners' capital                   109,816,265        139,091,553
                                           ---------------   ----------------
                                           $  115,792,938    $   176,899,144
                                           ===============   ================

The accompanying notes are an integral part of the financial statements.
<PAGE>
                          BALCOR PENSION INVESTORS-VI
                       (An Illinois Limited Partnership)
                                                   
                        STATEMENTS OF PARTNERS' CAPITAL
             for the years ended December 31, 1996, 1995 and 1994

                                      Partners' Capital  (Deficit) Accounts
                                   --------------- ------------- -------------
                                                       General       Limited
                                          Total        Partner       Partners
                                   --------------- ------------- -------------
Balance at December 31, 1993        $  197,578,783  $ (6,588,256) $204,167,039
Cash distributions to:
  Limited Partners (A)                 (54,196,430)                (54,196,430)
  General Partner                       (1,536,180)   (1,536,180)

Net income for the year
  ended December 31, 1994               11,040,627     1,104,063     9,936,564
                                   --------------- ------------- -------------
Balance at December 31, 1994           152,886,800    (7,020,373)  159,907,173
Cash distributions to:
  Limited Partners (A)                 (24,056,579)                (24,056,579)
  General Partner                       (1,321,115)   (1,321,115)
Net income for the year
  ended December 31, 1995               11,582,447     1,158,245    10,424,202
                                   --------------- ------------- -------------
Balance at December 31, 1995           139,091,553    (7,183,243)  146,274,796

Cash distributions to:
  Limited Partners (A)                 (53,975,220)                (53,975,220)
  General Partner                       (1,742,028)   (1,742,028)
  Deemed distribution (B)                 (151,261)                   (151,261)
Net income for the year
  ended December 31, 1996               26,593,221     8,773,679    17,819,542
                                   --------------- ------------- -------------
Balance at December 31, 1996        $  109,816,265  $   (151,592) $109,967,857
                                   =============== ============= =============

(A) Summary of cash distributions paid per Limited Partnership Interest:

                                        1996          1995          1994
                                  ---------------  ------------ -------------

             First Quarter         $         2.00  $       2.00  $      12.20
             Second Quarter                  2.86          4.50         12.00
             Third Quarter                   7.68          6.52         13.00
             Fourth Quarter                 26.50          4.38          2.00
                                                               
(B) This amount represents a state withholding tax paid on behalf of the 
Limited Partners relating to the gain on the sale of the Perimeter 400 Center
Office Building.

The accompanying notes are an integral part of the financial statements.
<PAGE>
                          BALCOR PENSION INVESTORS-VI
                       (An Illinois Limited Partnership)
                                                   
                       STATEMENTS OF INCOME AND EXPENSES
             for the years ended December 31, 1996, 1995 and 1994

                                         1996           1995          1994
                                   --------------- ------------- -------------
Income:
  Interest on loans 
    receivable and from
    investment in
    acquisition loan                $      313,255  $    816,044  $  2,362,044
  Income from operations
    of real estate held
    for sale                             9,923,126    11,142,276     9,639,905
  Interest on short-term
    investments                          1,194,304     1,587,705     1,694,880
  Participation income                                               3,000,000
  Recovery of losses on
    loans, real estate
    and accrued interest
    receivable                           3,351,785     2,465,000
                                   --------------- ------------- -------------
      Total income                      14,782,470    16,011,025    16,696,829
                                   --------------- ------------- -------------
Expenses:
  Provision for potential
    losses on loans, real
    estate and accrued
    interest receivable                  2,605,562     1,800,000     3,900,000
  Amortization of deferred
    expenses                               851,951       300,935       281,613
  Administrative                         1,556,744     1,229,199     1,514,676
                                   --------------- ------------- -------------
      Total expenses                     5,014,257     3,330,134     5,696,289
                                   --------------- ------------- -------------
Income before joint venture
  participations, equity in loss
  from investment in acquisition
  loan, gains on dispositions
  of real estate and extraordinary
  items                                  9,768,213    12,680,891    11,000,540
Participation in income (loss)
  of joint ventures - affiliates
  before extraordinary items             5,573,531       (18,481)      568,147
Equity in loss from
  investment in
  acquisition loan                         (56,481)      (32,714)      (40,410)
Affiliates' participation
  in income of joint ventures           (7,608,339)   (1,047,249)   (1,306,029)
Gains on dispositions of
  real estate                           19,443,993                     818,379
                                   --------------- ------------- -------------
Income before extraordinary items       27,120,917    11,582,447    11,040,627
<PAGE>
                                   --------------- ------------- -------------
Extraordinary items:
   Debt extinguishment expenses           (746,767)
   Affiliate's participation in debt
     extinguishment                        284,145
   Participation in debt 
     extinguishment expense of
       joint venture - affiliate           (65,074)
                                   ---------------
      Total extraordinary items           (527,696)
                                   --------------- ------------- -------------
Net income                          $   26,593,221  $ 11,582,447  $ 11,040,627
                                   =============== ============= =============

The accompanying notes are an integral part of the financial statements.
<PAGE>
                          BALCOR PENSION INVESTORS-VI
                       (An Illinois Limited Partnership)

                       STATEMENTS OF INCOME AND EXPENSES
             for the years ended December 31, 1996, 1995, and 1994
                                  (Continued)

                                     1996           1995          1994
                                -------------- ------------- -------------
Income before extraordinary 
   items allocated to 
   General Partner              $   8,826,449  $  1,158,245  $  1,104,063
                                ============== ============= =============
Income before extraordinary
   items allocated to
   Limited partner              $  18,294,468  $ 10,424,202  $  9,936,564
                                ============== ============= =============
Income before extraordinary items
  per Partnership Interest
  (1,382,562 issued and
  outstanding)                  $       13.23          None          None
                                ============== ============= =============
Extraordinary items allocated
   to General Partner           $     (52,770)         None          None
                                ============== ============= =============
Extraordinary items allocated
   to Limited Partners          $    (474,926)         None          None
                                ============== ============= =============
Extraordinary items per
   Limited Partnership Interest
  (1,382,562 issued and         $       (0.34)         None          None
  outstanding)                  ============== ============= =============

Net income allocated to 
   General Partner              $   8,773,679  $  1,158,245  $  1,104,063
                                ============== ============= =============
Net income allocated to
   Limited Partners             $  17,819,542  $ 10,424,202  $  9,936,564
                                ============== ============= =============
Net income per Limited
   Partnership Interest
  (1,382,562 issued and
  outstanding)                  $       12.89  $       7.54  $       7.18
                                ==============  ============ =============

The accompanying notes are an integral part of the financial statements.
<PAGE>
                          BALCOR PENSION INVESTORS-VI
                       (An Illinois Limited Partnership)

                           STATEMENTS OF CASH FLOWS
             for the years ended December 31, 1996, 1995 and 1994

                                     1996           1995          1994
                                -------------- ------------- -------------
Operating activities:
  Net income                    $  26,593,221  $ 11,582,447  $ 11,040,627
  Adjustments to reconcile
    net income to net cash
    provided by operating
    activities:
      Recovery of losses on
       loans, real estate
       and accrued interest
       receivable                  (3,351,785)   (2,465,000)
      Provision for
       potential losses on
       loans, real estate                        
       and accrued interest
       receivable                   2,605,562     1,800,000     3,900,000
      Payment of deferred
       expenses                      (297,704)     (264,559)     (284,080)
      Amortization of
       deferred expenses              851,951       300,935       281,613
      Participation in (income)
       loss of joint ventures-
       affiliates                  (5,573,531)       18,481      (568,147)
      Equity in loss from
       investment in acquisition
       loan                            56,481        32,714        40,410
      Affiliates' participation
       in income of joint
       ventures                     7,608,339     1,047,249     1,306,029
      Gains on dispositions of
        real estate               (19,443,993)                   (818,379)
      Debt extinguishment expense     746,767
      Affiliate's participation
       in debt extinguishment
       expense                       (284,145)
      Participation in debt
       extinguishment expense of
       joint venture - affiliate       65,074
      Net change in:
       Escrow deposits                356,330      (341,703)         (281)
       Escrow deposits -
         restricted                                               238,983
       Accounts and accrued
         interest receivable         (116,082)       17,251      (455,195)
       Prepaid expenses               194,503      (176,701)       24,528
       Accounts payable               162,315       258,094        77,072
       Due to affiliates              122,726      (122,478)       19,763
       Accrued liabilities            (92,742)      (97,008)     (185,427)
       Security deposits             (408,642)       19,401       (21,219)
                                -------------- ------------- -------------
<PAGE>
  Net cash provided by
    operating activities            9,794,645    11,609,123    14,596,297
                                -------------- ------------- -------------
Investing activities:
  Proceeds from sale of
    investment in acquisition
    loan                            3,803,640
  Cost incurred in connection
    with sale of investment in 
   acquisition loan                   (53,058)
  Distributions from joint
    ventures - affiliates          26,576,814       859,648       871,330
  Contribution to joint                          
    ventures - affiliates             (60,700)     (138,899)  
  Collection of principal                                     
    payments on loans
    receivable                                                 21,637,000
  Improvements to
    properties                     (1,478,867)     (521,832)     (867,198)
  Proceeds from dispositions                                  
    of real estate                 85,116,168                   8,325,000
  Cost incurred with
   dispositions of real estate     (2,735,562)
                                -------------- ------------- -------------
  Net cash provided by                                        
    investing activities          111,168,435       198,917    29,966,132
                                -------------- ------------- -------------

The accompanying notes are an integral part of the financial statements.
<PAGE>
                          BALCOR PENSION INVESTORS-VI
                       (An Illinois Limited Partnership)

                           STATEMENTS OF CASH FLOWS
             for the years ended December 31, 1996, 1995 and 1994
                                  (Continued)

                                     1996           1995          1994
                                -------------- ------------- -------------
Financing activities:
  Distributions to Limited
    Partners                    $ (53,975,220) $(24,056,579) $(54,196,430)
  Distributions to General
    Partner                        (1,742,028)   (1,321,115)   (1,536,180)
  Deemed distribution to
    Limited Partners                 (151,261)
  Distributions to joint venture
    partners - affiliates         (23,769,020)   (1,042,505)   (1,188,567)
  Capital contributions by joint
    venture partners-affiliates       487,317                     103,285
  Refunding of underlying revenue
    bonds                                        15,700,000
  Issuance of underlying revenue
    bonds                                       (15,700,000)
  Release of restricted
    investment                                      700,000
  Repayment of mortgage notes
    payable                                                    (5,434,419)
  Principal payments on
    mortgage notes payable           (148,234)      (42,934)     (123,249)
  Funding of repair escrows                        (201,075)
  Release of repair escrows           201,075
  Payment of refinancing fees                      (774,744)
                                -------------- ------------- -------------
  Net cash used in
    financing activities          (79,097,371)  (26,738,952)  (62,375,560)
                                -------------- ------------- -------------
Net change in cash and cash
  equivalents                      41,865,709   (14,930,912)  (17,813,131)
Cash and cash equivalents
  at beginning of year             16,076,834    31,007,746    48,820,877
                                -------------- ------------- -------------
Cash and cash equivalents
  at end of year                $  57,942,543  $ 16,076,834  $ 31,007,746
                                ============== ============= =============

The accompanying notes are an integral part of the financial statements.
<PAGE>
                          BALCOR PENSION INVESTORS-VI
                       (An Illinois Limited Partnership)

                         NOTES TO FINANCIAL STATEMENTS

1. Nature of the Partnership's Business:

Balcor Pension Investors-VI (the "Partnership") is engaged principally in the
operation of commercial real estate located in various markets within the
United States.

2. Partnership Termination:

The Partnership Agreement provides for the dissolution of the Partnership upon
the occurrence of certain events, including the disposition of all interests in
real estate. During 1996, the Partnership sold the Hawthorne Heights, Shoal
Run, Sun Lake and Woodscape apartment complexes, and the Perimeter 400 Center
and Symphony Woods office buildings. In addition, the Partnership sold its
minority joint venture interests in the 45 West 45th Street Office Building,
and Jonathan's Landing and Sand Pebble Village - Phases I and II apartment
complexes. During February 1997, the Partnership sold the Park Central Office
Building and Flamingo Pines Shopping Center. Currently, the Partnership has
entered into a contract for the sale of the Hammond Aire Plaza Shopping Center.
The Partnership is actively marketing the Brookhollow/Stemmons Center and 420
North Wabash office buildings for sale. The timing of the termination of the
Partnership and final distribution of cash will depend upon the nature and
extent of liabilities and contingencies which exist or may arise. Such
contingencies may include legal and other fees stemming from litigation
involving the Partnership including, but not limited to, the lawsuit as
discussed in Note 14 of Notes to Financial Statements. In the absence of any
contingency, the reserves will be paid within twelve months of the last
property being sold. In the event a contingency exists, reserves may be held by
the Partnership for a longer period of time.

3. Accounting Policies:

(a) The preparation of the financial statements in conformity with generally
accepted accounting principles requires the General Partner 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 revenues and expenses during the
reporting period. Actual results could vary from those estimates. 

(b) Income on loans was recorded as earned in accordance with the terms of the
related loan agreements. The accrual of interest was discontinued when a loan
became ninety days contractually delinquent or sooner when, in the opinion of
the General Partner, an impairment had occurred in the value of the collateral
property securing the loan. Income on nonaccrual loans or loans which were
otherwise not performing in accordance with their terms was recorded on a cash
basis.

Various loan agreements provided for participation by the Partnership in
increases in value of the collateral property when the loan was repaid or
refinanced. In addition, certain loan agreements allowed the Partnership to
receive a percentage of rental income exceeding a base amount. Participation
income was reflected in the accompanying Statements of Income and Expenses when
received.
<PAGE>
Income from operations of real estate held for sale is reflected in the
accompanying Statements of Income and Expenses net of related direct operating
expenses.

(c)  Loan losses on mortgage notes receivable were charged to income and an
allowance account was established when the General Partner believed the loan
balance would not be recovered. The General Partner assessed the collectibility
of each loan on a periodic basis through a review of the collateral property
operations, the property value and the borrower's ability to repay the loan.
Upon foreclosure, the loan net of the allowance was transferred to real estate
held for sale after the fair value of the property, less costs of disposal, was
assessed. Upon the transfer to real estate held for sale, a new basis in the
property was established.

Effective January 1, 1995 the Partnership adopted Statement of Financial
Accounting Standards, No. 121 (SFAS 121), "Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to Be Disposed Of". Under SFAS 121, the
General Partner periodically assesses, but not less than on an annual basis,
the fair value of its real estate properties held for sale. The General Partner
estimates the fair value of its properties based on the current sales price
less estimated closing costs.  Changes in the property's fair value is recorded
by an adjustment to the property allowance account and is recognized in the
income statement as an increase or decrease through recovery income or a
provision for loss in the period the change in fair value is determined. The
General Partner considers the methods referred to above to result in a
reasonable measurement of a property's fair value, unless other factors
affecting the property's value indicate otherwise.

(d) Investment in acquisition loan represented a first mortgage loan which,
because the loan agreement included certain specified terms, was accounted for
as an investment in a real estate venture. The investment was therefore
reflected in the accompanying financial statements using the equity method of
accounting. Under this method, the Partnership recorded its investment at cost
(representing total loan fundings) and subsequently adjusted its investment for
its share of property income or loss.

Amounts representing contractually required debt service were recorded in the
accompanying Statements of Income and Expenses as interest income and
participation income. Equity from investment in acquisition loan represented
the Partnership's share of the collateral property's operations, including
depreciation and interest expense. The Partnership's share of operations had no
effect on cash flow of the Partnership.

(e) Investment in joint ventures - affiliates represented the Partnership's
44.63%, 41.3%, and 46.5% interest, under the equity method of accounting, in
joint ventures with affiliates. Under the equity method of accounting, the
Partnership recorded its initial investment at cost and adjusted its investment
account for additional capital contributions, distributions and its share of
joint venture income or loss.

(f) Deferred expenses consist of refinancing fees which are amortized over the
term of the respective agreement, and leasing commissions which are amortized
over the life of each respective lease. Upon sale, any remaining balance is
recognized as debt extinguishment expense and classified as an extraordinary
item.
<PAGE>
(g)  The Financial Accounting Standard Board's Statement No. 107, "Disclosures
About Fair Value of Financial Instruments," requires disclosure of fair value
information about financial instruments for which it is practicable to estimate
that value. Since quoted market prices are not available for the Partnership's
financial instruments, fair values have been based on estimates using present
value techniques. These techniques are significantly affected by the
assumptions used, including the discount rate and estimates of future cash
flows. In that regard, the derived fair value estimates cannot be substantiated
by comparison to independent markets and, in many cases, may not be realized in
immediate settlement of the instrument. Statement No. 107 does not apply to all
balance sheet items and excludes certain financial instruments and all
non-financial instruments such as real estate and investment in joint ventures
from its disclosure requirements.

(h) Revenue is recognized on an accrual basis in accordance with generally
accepted accounting principles. Income from operating leases with significant
abatements and/or scheduled rent increases is recognized on a straight line
basis over the respective lease term. Service income includes reimbursements
from operating costs such as real estate taxes, maintenance and insurance and
is recognized as revenue in the period the applicable costs are incurred.

(i) Cash and cash equivalents include all unrestricted highly liquid
investments with an original maturity of three months or less when purchased.
Cash is held or invested in one financial institution.

(j) The Partnership is not liable for Federal income taxes and each partner
recognizes his proportionate share of the Partnership's income or loss in his
tax return; therefore, no provision for income taxes is made in the financial
statements of the Partnership.

(k) For financial statement purposes, in previous years partners were allocated
income and loss in accordance with the provisions in the Partnership Agreement.
In order for the capital accounts of the General Partner and Limited Partners
to appropriately reflect their respective remaining economic interests as
provided for in the Partnership Agreement, the General Partner was allocated
additional income in 1996 for financial statement purposes.

(l) Several reclassifications have been made to the previously reported 1994
financial statements to conform with the classifications used in 1996 and 1995.
These reclassifications have not changed the 1994 results.

4. Partnership Agreement:

The Partnership was organized in October 1984. The Partnership Agreement
provides for Balcor Mortgage Advisors-VI to be the General Partner and for the
admission of Limited Partners through the sale of up to 1,450,000 Limited
Partnership Interests at $250 per Interest, 1,382,562 of which were sold on or
prior to October 31, 1985, the termination date of the offering. For financial
statement purposes, the Partnership's results of operations are allocated 90%
to Limited Partners and 10% to the General Partner, of which 2.5% of the
General Partner's share relates to the Early Investment Incentive Fund.

To the extent that Cash Flow is distributed, distributions are made as follows:
(i) 90% of such Cash Flow is distributed to the Limited Partners, (ii) 7.5% of
such Cash Flow is distributed to the General Partner, and (iii) an additional
2.5% of such Cash Flow is distributed to the General Partner and constitutes
the Early Investment Incentive Fund (the "Fund"). An amount not to exceed such
<PAGE>
2.5% share originally allocated will be returned to the Partnership by the Fund
at the dissolution of the Partnership to the extent necessary to enable early
investors to receive upon dissolution of the Partnership a return of their
Original Capital plus a Cumulative Return of 15% for Interests purchased on or
before June 30, 1985, and 14% for Interests purchased between July 1, 1985 and
October 31, 1985.

Amounts placed in the Fund were used to repurchase Interests from existing
Limited Partners, at the sole discretion of the General Partner and subject to
certain limitations. During 1996, the Fund repurchased 16,967 Interests at a
cost of $1,684,405. All repurchases of Interests have been made at 90% of the
current value of such Limited Partnership Interests at the previous quarter
end. In February 1997, the Partnership discontinued the repurchase of Interests
from Limited Partners.

Distributions of Cash Flow and Mortgage Reductions pertaining to such
repurchased Interests were paid to the Fund and were available to repurchase
additional Interests.

5. Mortgage Notes Payable:

In October 1995, the underlying revenue bonds which financed the Sun Lake
Apartments $15,700,000 mortgage note payable, were refunded. The proceeds from
the new bonds were used to repay the prior bonds. The interest rate increased
from 4.5% to 5.375%. The prior bonds were collateralized by a letter of credit
for a fee of 1.7% annually of the letter of credit balance. The new bonds
required payment of guarantee and servicing fees totaling .975% annually of the
letter of credit balance. The monthly principal and interest payment due on the
new bonds was $99,080. The mortgage note payable had a balance of $15,657,066
at December 31, 1995.

Real estate held for sale with an aggregate carrying value of $21,885,000 at
December 31, 1995 was pledged as collateral for repayment of this mortgage
note. In November 1996 this property was sold. See Note 12 of Notes to
Financial Statements for additional information.

In November 1994, the Partnership remarketed the underlying revenue bonds which
financed the Sun Lake Apartments $15,700,000 mortgage note payable, which
reduced the interest rate of the loan from 7.625% to 4.5% effective November 1,
1994. The interest rate remained constant until November 1, 1995, the
remarketing date of the bonds. The bonds were collateralized by an irrevocable
letter of credit. In connection with the remarketing, the letter of credit was
reduced to approximately $16,131,750 and extended one additional year to
November 1, 1995. The Partnership needed to replace the letter of credit or
find an alternate credit facility for the bonds as of such date. The
Partnership paid a fee of approximately 1.7% on the letter of credit balance.
In addition, beginning November 1, 1994, the Partnership was required to remit
excess cash flow payments to the letter of credit provider to be held in trust
for future remarketing expenditures. Unless there was a prior redemption of all
or part of the bonds, the entire principal balance of the loan would have been
due on November 1, 1997.
 
During the years ended December 31, 1996, 1995 and 1994, the Partnership
incurred interest expense on the mortgage notes payable of $941,895, $959,064
and $1,688,971, respectively, and paid interest expense of $941,895, $1,020,529
and $1,627,506, respectively.
<PAGE>
6. Investment in Acquisition Loan:

In January 1989, the joint venture consisting of the Partnership and two
affiliates entered into a participation agreement to fund a $23,300,000 first
mortgage loan on the Noland Fashion Square. The Partnership participated
ratably in 21.46% of the loan amount, related interest income and participation
income. In August 1996, the Partnership sold its interest in the loan for a
sales price of $3,803,640. From the proceeds of the sale, the Partnership paid
$53,058 as its share of the selling costs. The carrying value of the loan was
$4,377,929. The Partnership did not recognize a gain or loss in connection with
the sale of this loan. During 1996, the Partnership recognized a provision for
loan losses of $352,753 and wrote off $627,347 against the previously
established loss allowance related to this loan.

The Jonathan's Landing loan receivable was on non-accrual status in 1994 and
prior to the acquisition through foreclosure of the property in 1995.  Loans,
and loans whose payment terms have been restructured, were thereafter referred
to as impaired loans. Net interest income relating to impaired loans was
$524,637 in 1995 and $1,049,275 in 1994. Net interest income included in the
accompanying Statements of Income and Expenses amounted to $425,421 in 1995 and
$887,409 in 1994.

7. Allowances for Losses on Loans and Real Estate Held for Sale:

Activity recorded in the allowances for losses on loans and real estate held
for sale during the three years ended December 31, 1996 is described in the
table below:

                                   1996           1995          1994
                                -----------   -----------   -----------
    Loans:
     Balance at beginning of      
      year                         $274,594   $1,308,594   $ 1,308,594
     Provision charged to
      income                        352,753        None           None
     Direct write-off of
      loans against allowance      (627,347)  (1,034,000)         None
                                -----------   -----------   -----------
     Balance at the end of
      the year                         None    $ 274,594   $ 1,308,594
                                ===========   ===========   ===========
    Real Estate Held for Sale:
     Balance at beginning of
      year                       $7,300,000   $7,965,000    $4,065,000
     Provision charged to
      income                      2,252,809    1,800,000     3,900,000
     Recovery of provision
      previously charged         
      to income                 (3,351,785)  (2,465,000)          None
    Direct write-off of real
      estate held for sale
      against allowance         (1,386,215)        None           None

                                -----------   ----------   ------------
     Balance at the end of
      the year                   $4,814,809   $7,300,000    $7,965,000
                                ===========   ===========   ===========
<PAGE>
8.  Management Agreements:

As of December 31, 1996, all of the remaining properties owned by the
Partnership are managed by a third-party management company. These management
agreements provide for annual fees of 3% to 6% of gross operating receipts.

9. Affiliates' Participation in Joint Ventures:

(a) The Brookhollow/Stemmons Center Office Complex is owned by the Partnership
and an affiliate.  Profits and losses are allocated 72.5% to the Partnership
and 27.5% to the affiliate.

(b) The Perimeter 400 Center Office Building was owned by a joint venture
consisting of the Partnership and three affiliates. Profits and losses were
allocated 50% to the Partnership and 50% among the affiliates. The joint
venture sold this property during 1996. See Note 12 of Notes to Financial
Statements for additional information.

(c) The Sun Lake Apartments was owned by a joint venture consisting of the
Partnership and an affiliate. Profits and losses were allocated 61.95% to the
Partnership and 38.05% to the affiliate. The joint venture sold this property
during 1996. See Note 12 of Notes to Financial Statements for additional
information.

All assets, liabilities, income and expenses of the joint ventures are included
in the financial statements of the Partnership with the appropriate adjustment
of profit or loss for each affiliate's participation.

Net distributions of $23,281,703, $1,042,505 and $1,085,282 were made to joint
venture partners during 1996, 1995 and 1994, respectively. In addition, the
joint venture partners were allocated their pro-rata share of the recovery of
losses in the amount of $977,945 during 1996 and $580,001 during 1995.
Provisions for potential losses in the amount of $684,900 were recognized
during 1995.

10. Investment in Joint Ventures with Affiliates:

(a) Title to the Sand Pebble Village - Phase I Apartments was acquired through
foreclosure sale by a joint venture consisting of the Partnership and an
affiliate in July 1992. The joint venture purchased the adjacent property, the
Sand Pebble Village - Phase II Apartments in October 1993. Profits and losses,
all capital contributions and distributions for both properties were allocated
in accordance with each participant's original funding percentage in the Phase
I loan. The Partnership's ownership percentage was 44.63%.

In August 1996, the joint venture sold Sand Pebble Village Apartments - Phase I
in an all cash sale for $19,411,765. From the proceeds of the sale, the joint
venture paid $431,822 in selling costs. The basis of the property was
$21,436,000. The joint venture recognized no gain or loss on the sale of this
property. The joint venture recognized a recovery of loss on real estate of
$2,080,943 from the sale of this property, of which $928,725 represents the
Partnership's share.
<PAGE>
In August 1996, the joint venture also sold Sand Pebble Village Apartments -
Phase II in an all cash sale for $12,088,235. From the proceeds of the sale,
the joint venture paid $4,859,155 to the third party mortgage holder in full
satisfaction of the first mortgage loan, paid a prepayment penalty of $145,775
and selling costs of $272,701. The basis of the property was $9,357,449. The
joint venture recognized a gain of $2,458,085 from the sale of this property,
of which $1,097,043 represents the Partnership's share.   

During 1994, the Partnership recognized a loss of $512,000 as its share of a
provision relating to the change in the estimate of the fair value of these
properties.

The Partnership's share of the recovery of the loss allowance in 1996 and
provision for losses in 1994 are included in the Partnership's participation in
income (loss) of joint venture with affiliates. In addition, during 1996, 1995
and 1994, the Partnership received net distributions from these joint ventures
totaling $12,229,052, $855,945, and $871,330, respectively.

(b) In 1995, a joint venture consisting of the Partnership and three
affiliates acquired title to the 45 West 45th Street Office Building. Profits
and losses, all capital contributions and distributions were allocated in
accordance with each participant's original funding percentage in the loan. The
Partnership's ownership percentage was 41.3%.

In November 1996, the joint venture sold the 45 West 45th Street Office
Building in an all cash sale for $10,300,000. From the proceeds of the sale the
joint venture paid $579,075 in selling costs. The basis of the property was
$6,786,740. The joint venture recognized a gain of $2,934,185 and a recovery of
a previously established loss allowance of $2,475,000 from the sale of this
property, of which the Partnership's share is $1,211,818 and $1,021,000,
respectively. 

During 1995, the Partnership recognized a loss of $1,021,000 as its share of a
provision for losses relating to the change in the estimate of the fair value
of the property. This amount is included in the Partnership's participation in
income (loss) of joint venture with affiliates. During 1996 the Partnership
received net distributions from the joint venture of $4,121,167.  During 1995,
the Partnership made a net contribution of $211,957 to this joint venture. 

(c) In 1995, a joint venture consisting of the Partnership and an affiliate
acquired title to the Jonathan's Landing Apartments. Profits and losses, all
capital contributions and distributions were allocated in accordance with each
participant's original funding percentage in the loan. The Partnership's
ownership percentage was 46.5%.

In November 1996, the joint venture sold the Jonathan's Landing Apartments in
an all cash sale for $21,300,000. From the proceeds of the sale, the joint
venture paid $796,475 in selling costs. The basis of the property was
$18,354,120. The joint venture recognized a gain of $2,149,405 from the sale of
this property, of which $999,473 is the Partnership's share.

During 1996 and 1995, the Partnership received net distributions from the joint
venture of $10,165,895 and $76,761, respectively.  

The following combined information has been summarized from the December 31,
1996 and 1995 financial statements of the above joint ventures:
<PAGE>
                                         1996                 1995
                                     -----------           ----------
Net investment in real estate
 as of December 31                          None          $51,397,309
Total liabilities as 
 of December 31                         $108,700            5,324,506
Total income                          17,522,704            8,268,086
Income before loss provisions,
  gains on sales and
  extraordinary items                  2,380,073            1,251,627
Provision for potential losses              None           (2,473,000)
Recovery of loss                       4,553,943                 None
Gain on sales                          9,622,619                 None
Extraordinary items:
    Debt extinguishment expense          145,775                 None
Net income (loss)                     16,410,860           (1,221,373)
 
11. Transactions with Affiliates:

Fees and expenses paid and payable by the Partnership to affiliates are:

                            Year Ended       Year Ended       Year Ended
                             12/31/96         12/31/95         12/31/94   
                         ----------------  ---------------  ----------------
                           Paid  Payable    Paid   Payable   Paid    Payable
                          ------  -------  ------  -------  ------   -------

Mortgage servicing fees   $8,338    None   $30,603    $957 $71,937  $4,944
Property management fees    None    None      None    None 973,445    None
Reimbursement of expenses
  to the General Partner,
  at cost:
    Accounting             38,973 $26,534   93,992   8,319  122,102  46,741
    Data processing        11,596   3,890   74,804   5,848  147,462  33,817
    Investor communica-
      tions                 None     None   10,982    None   41,294  10,280
    Legal                  18,825  12,816   35,956   4,294   37,638  14,843
    Portfolio management  192,692 131,186  195,656  32,272  121,413  39,432
    Other                    None    None   27,456      10   26,545  24,121
    
Allegiance Realty Group, Inc. an affiliate of the General Partner, managed ten
of the Partnership's eleven properties until the affiliate was sold to a third
party in November 1994.

The Partnership participates in an insurance deductible program with other
affiliated partnerships in which the program pays claims up to the amount of
the deductible under the master insurance policies for its properties. The
program is administered by an affiliate of the General Partner who receives no
fee for administering the program; however, the General Partner is reimbursed
for program expenses. The Partnership paid premiums to the deductible insurance
program of $41,553, $169,385 and $219,226 in 1996, 1995 and 1994, respectively.
<PAGE>
12. Property Dispositions:

(a) In December 1996, the Partnership sold Symphony Woods Office Building in an
all cash sale for $7,275,000. From the proceeds of the sale, the Partnership
paid $251,836 in selling costs. The basis of the property was $5,153,837.  For
financial statement purposes, the Partnership recognized a gain of $1,869,327
from the sale of this property.

(b) The Perimeter 400 Center Office Building was owned by a joint venture
consisting of the Partnership and three affiliates. The Partnership and the
affiliates held participating percentages in the joint venture of 50%, 22%,
15%, and 13%, respectively. In December 1996, the joint venture sold the
property in an all cash sale for $40,700,000. From the proceeds of the sale,
the joint venture paid $882,765 in selling costs. In addition, the Partnership
paid a state withholding tax of $151,261 relating to the gain on the sale of
this property. The basis of the property was $27,396,252. For financial
statement purposes, the Partnership recognized a gain of $12,420,983 from the
sale of this property, of which $6,210,492 is the minority joint venture
partners' share.

(c) Sun Lake Apartments was owned by a joint venture consisting of the
Partnership and an affiliate. The Partnership and the affiliate held
percentages in the joint venture of 61.95% and 38.05%, respectively. In
November 1996, the joint venture sold the property in an all cash sale for
$24,000,000. The purchaser took title to the property subject to the existing
first mortgage loan of $15,508,832. From the proceeds of the sale, the joint
venture paid $701,215 in selling costs. The basis of the property was
$24,685,000. For financial statement purposes, the joint venture recognized no
gain or loss from the sale of this property. The joint venture recognized a
recovery of loss on real estate of $1,413,785 from the sale of this property,
of which $537,945 is the minority joint venture partner's share, and wrote off
$1,386,215 against the previously established loss allowance related to this
property.

(d) In September 1996, the Partnership sold Shoal Run Apartments in an all cash
sale for $10,800,000. From the proceeds of the sale, the Partnership paid
$290,800 in selling costs. The basis of the property was $9,450,000. For
financial statement purposes, the Partnership recognized a gain of $1,059,000
from the sale of this property.

(e) In August 1996, the Partnership sold the Woodscape Apartments in an all
cash sale for $9,550,000. From the proceeds of the sale, the Partnership paid
$299,421 in selling costs. The basis of the property was $6,629,000. For
financial statement purposes, the Partnership recognized a gain of $2,621,579
from the sale of this property. 

(f) In June 1996, the Partnership sold the Hawthorne Heights Apartments in an
all cash sale for $8,300,000. From the proceeds of the sale, the Partnership
paid $309,525 in selling costs. The basis of the property was $6,517,570. For
financial statement purposes, the Partnership recognized a gain of $1,472,905
from the sale of this property.

(g) In August 1994, the Partnership disposed of its investment in the Northgate
and Gatewood apartment complexes which had a basis of $7,506,621. In connection
with the disposition, the Partnership received proceeds of $8,325,000 and the
underlying loans related to the properties of $2,047,463 were repaid. For
<PAGE>
financial statement purposes, the Partnership recognized a gain of $818,379
from the disposition of this investment.

13.  Extraordinary Items:

(a) In connection with the November 1996 of the Sun Lake Apartments, the
Partnership wrote off the remaining unamortized deferred financing fees in the
amount of $746,767, of which $284,145 is the minority joint venture partner's
share. This amount was recognized as an extraordinary item and classified as
debt extinguishment expense.

(b) In connection with August 1996 sale of the Sand Pebble Village - Phase II
Apartments, the joint venture paid a prepayment penalty in the amount of
$145,775, of which $65,074 was the Partnership's share. This amount was
recognized as an extraordinary item and classified as debt extinguishment
expense.

14. Contingency:

The Partnership is currently involved in a lawsuit whereby the Partnership, the
General Partner and certain third parties have been named as defendants seeking
damages relating to tender offers to purchase interests in the Partnership and
nine affiliated partnerships initiated by the third party defendants in 1996.
The defendants continue to vigorously contest this action. The action has been
dismissed with prejudice and plaintiffs have filed an appeal. It is not
determinable at this time whether or not an unfavorable decision in this action
would have a material adverse impact on the financial position, operations and
liquidity of the Partnership. The Partnership believes it has meritorious
defenses to contest the claims.

15. Settlement of Litigation:

A settlement has received final approval by the court in November 1996 in
the class action, Paul Williams and Beverly Kennedy, et. al. v. Balcor Pension
Investors, et. al. upon the terms described in the notice to class members in
September 1996. The settlement had no material impact on the Partnership.

16. Fair Values of Financial Instruments:

As of December 31, 1996 and 1995, the carrying value of cash and cash
equivalents, accounts and accrued interest receivable, and accounts payable
approximates fair value.

As of December 31, 1995 , the fair value of the Partnership's loan receivable
approximated the carrying value of $4,159,816. In addition, the fair of the
Partnership's mortgage note payable was $13,675,375, and the carrying value was
$15,657,066.

17. Subsequent Events:

(a) In January 1997, the Partnership paid $38,711,736 ($28.00 per Interest) to
Limited Partners representing the regular quarterly distribution of available
Cash Flow of $2.00 per Interest for the fourth quarter of 1996 and a special
distribution of Mortgage Reductions of $26.00 per Interest from proceeds
received in connection with the sale of the 45 West 45th Street, Symphony Woods
and Perimeter 400 Center office buildings and the Sun Lake and Jonathan's
Landing apartment complexes all of which occurred during the fourth quarter of
1996.

(b) In February 1997, the General Partner made a settlement payment of
$207,384($.15 per $250 Interest) to members of the class pursuant to the
settlement approved by the court in November 1996 in the Paul Williams and
Beverly Kennedy et. al. v. Balcor Pension Investors, et. al. class action
lawsuit. 
<PAGE>
(c) In February 1997, the Partnership sold the Park Central Office Building in
an all cash sale for $21,471,000. From the proceeds of the sale, the
Partnership paid $470,891 in selling costs. Pursuant to the terms of the sale,
the Partnership is required to retain $1,100,000 of the sales proceeds until
November 1997.  The basis of the property was $14,875,198. For financial
statement purposes, the Partnership will recognize a gain of approximately
$6,125,000 in connection with the sale of this property during the first
quarter of 1997.

(d) In February 1997, the Partnership sold the Flamingo Pines Shopping Center
in an all cash sale for $10,200,000. From the proceeds of the sale, the
Partnership paid $346,400 in selling costs. The basis of the property was
$10,242,409. For financial statement purposes, the Partnership will recognize
no gain or loss in connection with the sale of this property. During 1996, the
Partnership recognized a provision of $388,809 related to this property to
provide for changes in the property's fair value based on the terms of the
sale.
<PAGE>