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, 1998
                          -----------------
                                      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 0-13349
                       -------
                          BALCOR REALTY INVESTORS-84
            ------------------------------------------------------
            (Exact name of registrant as specified in its charter)

           Illinois                                      36-3215399
-------------------------------                      ------------------- 
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                       Identification No.)

2355 Waukegan Road
Bannockburn, IL                                             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 Realty Investors-84 (the "Registrant") is a limited partnership formed
in 1982 under the laws of the State of Illinois. The Registrant raised
$140,000,000 from sales of Limited Partnership Interests. The Registrant has
retained cash reserves from the sale of its real estate investments for
contingencies which exist or may arise. The Registrant's operations currently
consist of interest income earned on short-term investments and the payment of
administrative expenses.

The Registrant utilized the net offering proceeds to acquire twenty-three real
property investments and a minority joint venture interest in one additional
property and has since disposed of all of these investments. The Partnership
Agreement provides that the proceeds of any sale or refinancing of the
Registrant's properties will not be reinvested in new acquisitions.

The Partnership Agreement provides for the dissolution of the Registrant upon
the occurrence of certain events, including the disposition of all interests in
real estate. The Registrant sold its final real estate investment in November
1997. The Registrant has retained a portion of the cash from the property sales
to satisfy obligations of the Registrant as well as establish a reserve for
contingencies. The timing of the termination of the Registrant and the 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 and costs stemming from litigation involving the Registrant
including, but not limited to, the lawsuits discussed in "Item 3. Legal
Proceedings". Due to this litigation, the Registrant will not be dissolved and
reserves will be held by the Registrant until the conclusion of all
contingencies. There can be no assurances as to the time frame for conclusion
of these contingencies.

See "Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources" for information regarding the
Registrant's Year 2000 readiness.

The Registrant no longer has an ownership interest in any real estate
investment. The General Partner is not aware of any material potential
liability relating to environmental issues or conditions affecting real estate
formerly owned by the Registrant.

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

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

As of December 31, 1998, the Registrant did not own any properties.
<PAGE>
In the opinion of the General Partner, the Registrant has obtained adequate
insurance coverage for property liability and property damage matters.

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

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

Klein, et al. vs. Lehman Brothers, Inc., et al.
-----------------------------------------------

On August 30, 1996, a proposed class action complaint was filed, Lenore Klein,
et al. vs. Lehman Brothers, Inc., et al. (Superior Court of New Jersey, Law
Division, Union County, Docket No. Unn-L-5162-96). The complaint was amended on
each of October 18, 1996, December 5, 1997 and January 15, 1998. The
Registrant, additional limited partnerships which were sponsored by The Balcor
Company (together with the Registrant, the "Affiliated Partnerships"), The
Balcor Company, American Express Company, Lehman Brothers, Inc., Smith Barney,
Inc., American Express Financial Advisors, and other affiliated entities and
various individuals are named defendants in the action. The most recent amended
complaint, plaintiffs' Third Amended Complaint, alleges, among other things,
common law fraud and deceit, negligent misrepresentation, breach of contract,
breach of fiduciary duty and violation of certain New Jersey statutes relating
to the disclosure of information in the offering of limited partnership
interests in the Affiliated Partnerships, the marketing of interests in the
Affiliated Partnerships and the acquisition of real properties for the
Affiliated Partnerships. The Third Amended Complaint seeks judgment for
compensatory damages equal to the amount invested in the Affiliated
Partnerships by the proposed class plus interest; general damages for injuries
arising from the defendants' alleged actions; equitable relief, including
rescission, on certain counts; punitive damages; treble damages on certain
counts; recovery from the defendants of all profits received by them as a
result of their alleged actions relating to the Affiliated Partnerships;
attorneys' fees and other costs.

In June 1998, the defendants filed a motion to dismiss the complaint for
failure to state a cause of action. Oral arguments were heard by the court on
August 21, 1998. On September 24, 1998, the judge issued a letter opinion
granting the defendants' motion to dismiss the complaint. On October 23, 1998,
the judge announced that he would enter an order dismissing the complaint
without prejudice, but stated that the plaintiffs would be required to file any
new pleading in a separate action and would not be allowed to amend the
existing complaint. The plaintiffs moved for a reconsideration of the judge's
ruling, which was denied on November 20, 1998. On December 28, 1998, plaintiffs
filed a notice of appeal from both the judge's October 23 and November 20, 1998
rulings.

On March 11, 1999, an order was entered by the Superior Court of New Jersey,
Appellate Division, dismissing the appeal in this action with prejudice.
Therefore, this will be the final report to investors regarding this matter.
<PAGE>
Masri vs. Lehman Brothers, Inc., et al.
---------------------------------------

On February 29, 1996, a proposed class action complaint was filed, Raymond
Masri vs. Lehman Brothers, Inc., et al., Case No. 96/103727 (Supreme Court of
the State of New York, County of New York). The Registrant, additional limited
partnerships which were sponsored by The Balcor Company, three limited
partnerships sponsored by the predecessor of Lehman Brothers, Inc. (together
with the Registrant and the affiliated partnerships, the "Defendant
Partnerships"), Lehman Brothers, Inc. and Smith Barney, Inc. are defendants.
The complaint alleges, among other things, common law fraud and deceit,
negligent misrepresentation and breach of fiduciary duty relating to the
disclosure of information in the offering of limited partnership interests in
the Defendant Partnerships. The complaint seeks judgment for compensatory
damages equal to the amount invested in the Defendant Partnerships by the
proposed class plus interest accrued thereon; general damages for injuries
arising from the defendants' alleged actions; recovery from the defendants of
all profits received by them as a result of their alleged actions relating to
the Defendant Partnerships; exemplary damages; attorneys' fees and other costs.

The 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 how the outcome of
this action will impact the remaining cash reserves of the Registrant.

Plaintiffs' lead counsel also represents the plaintiffs in the Lenore Klein
matter discussed above. Plaintiffs' counsel has indicated an intent to withdraw
this complaint. Raymond Masri has joined as an additional plaintiff in the
Lenore Klein matter discussed above. 

Bruss et al. vs. Lehman Brothers, Inc., et al.
----------------------------------------------

On January 25, 1999, a proposed class action complaint was filed, Dorothy
Bruss, et al. vs. Lehman Brothers, Inc., et al. (Superior Court of New Jersey,
Law Division, Essex County, Docket No. L-000898-99). The Registrant,
additional limited partnerships which were sponsored by The Balcor Company
(together with the Registrant, the "Affiliated Partnerships"), The Balcor
Company, American Express Company, Lehman Brothers, Inc., Smith Barney, Inc.,
American Express Financial Corporation, and other affiliated entities and
various individuals are named defendants in the action. Lead counsel
representing the plaintiffs in this case is the same counsel representing the
plaintiffs in each of the Lenore Klein and Raymond Masri cases discussed above.
The complaint relates largely to the same issues as those raised in the Lenore
Klein and the Raymond Masri cases. The complaint alleges, among other things,
common law fraud and deceit, negligent misrepresentation, breach of contract,
breach of fiduciary duty and violation of certain New Jersey and other similar
state statutes relating to the disclosure of information in the offering of
limited partnership interests in the Affiliated Partnerships, the marketing of
interests in the Affiliated Partnerships and the acquisition of real property
for the Affiliated Partnerships. The complaint seeks judgement for
compensatory damages equal to the amount invested in the Affiliated
<PAGE>
Partnerships by the proposed class plus interest; general damages for injuries
arising from the defendants' alleged actions; equitable relief, including
rescission on certain counts; punitive damages; treble damages on certain
counts; recovery from the Defendants of all profits received by them as a
result of their alleged actions relating to the Affiliated Partnerships; and
attorneys' fees and other costs.

The defendants intend to vigorously contest this action. No class has been
certified as of this date. The Registrant believes that it has meritorious
defenses to contest the claims. It is not determinable at this time how the
outcome of this action will impact the remaining cash reserves of the
Registrant.

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 1998.
<PAGE>
                                    PART II

Item 5. Market for the 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, 1998, the number of record holders of Limited Partnership
Interests of the Registrant was 11,501.

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

                                      Year ended December 31,                 
                  ------------------------------------------------------------
                      1998       1997        1996        1995         1994
                  ----------- ----------- ----------- ------------  -----------
Total income         $162,158 $3,512,008 $19,030,209  $28,134,122  $30,392,509 
(Loss) income before
 gains on sales 
 of properties,
 affiliate's  
 participation in 
 joint venture  
 and extra-
 ordinary items      (115,819)   178,509    (415,736)   (410,442)   (2,814,657)
Net (loss) income    (115,819)22,350,754  52,406,576   3,004,923    5,572,852
Net (loss) income per
  Limited Partner-
  ship Interest -
  Basic and Diluted     (0.83)    152.57       370.59       21.25        39.41
Total assets        2,484,650  7,455,003   29,290,928  84,442,075   98,385,353
Mortgage notes
  payable                None       None  26,039,303  103,293,307  114,779,433
Distributions per
  Limited
  Partnership
  Interest (A)          34.36     125.00      160.00         None         None

(A) These amounts include distributions of Original Capital of $34.36, $125.00
and $156.00 for 1998, 1997 and 1996, respectively.

Item 7. Management's Discussion and Analysis of Financial Condition and
-----------------------------------------------------------------------
Results of Operations
---------------------
<PAGE>
Operations
----------

Summary of Operations
---------------------

Balcor Realty Investors - 84 (the "Partnership") sold ten properties during
1996 and its remaining three properties during 1997 and recognized gains in
connection with the property sales. During 1998, administrative expenses were
higher than interest income earned on short-term investments, which resulted in
a net loss during 1998 as compared to net income during 1997. The Partnership
recognized significant gains in connection with the ten property sales in 1996
which resulted in the Partnership recognizing higher net income during 1996 as
compared to 1997. Further discussion of the Partnership's operations is
summarized below.

1998 Compared to 1997
---------------------

In 1997, the Partnership sold its three remaining properties: the Somerset
Pointe, Courtyards of Kendall and Briarwood Place apartment complexes and
recognized aggregate gains on sale of $22,126,211. As a result, rental and
service income, interest expense on mortgage notes payable, depreciation,
amortization, property operating expense, real estate taxes and property
management fees ceased during 1997. 

Higher average cash balances were available for investment in 1997 due to
proceeds received in connection with the 1997 and 1996 sales of the
Partnership's properties prior to distribution to the Limited Partners in
January and April 1997 and January 1998. This resulted in a decrease in
interest income on short-term investments during 1998 as compared to 1997.

The Partnership recognized other income during 1998 primarily due to refunds
received from vendors relating to certain of the properties sold in 1997. In
connection with the sale of Somerset Pointe apartment complex in 1997, the
Partnership recognized other income of $252,462 representing the difference
between the contractual amount of the first mortgage loan and the carrying
amount of the loan. In addition, the Partnership recognized other income of
$75,904 during 1997 primarily in connection with a partial refund of prior
years' insurance premiums relating to the Partnership's properties.  

In connection with the sale of the Courtyards of Kendall apartment complex
during 1997, the Partnership paid the lender a participation fee of $225,000.
The lender participation fee represents additional interest paid to the lender
calculated as a percentage of the sale price in excess of a certain amount
specified in the loan agreement.

Administrative expense decreased during 1998 as compared to 1997 primarily due
to lower accounting, portfolio management and professional fees and bank
charges. 

During February 1997, the Partnership paid $234,721 in full satisfaction of the
junior mortgage loan outstanding from an affiliate of the General Partner
<PAGE>
related to the Woodland Hills Apartments, representing a discount of $111,245.
The loan had an outstanding balance of $345,966, which included accrued
interest of $9,094. The discount was recognized as an extraordinary item and
classified as gain on forgiveness of debt for financial statement purposes.

In connection with the sale of the Somerset Pointe and Briarwood Place
apartment complexes in 1997, the Partnership wrote-off the remaining
unamortized deferred financing fees in the amount of $65,211. This amount was
recognized as an extraordinary item and classified as debt extinguishment
expense for financial statement purposes.

1997 Compared to 1996
---------------------

During 1996, the Partnership sold ten properties and recognized gains in
connection with these sales totaling $52,611,265. The sales of these properties
resulted in decreases in rental and service income, interest expense on
mortgage notes payable, depreciation, amortization, property operating expense,
real estate taxes and property management fees during 1997 as compared to 1996.

Higher average cash balances were available for investment during 1997 due to
proceeds received by the Partnership in connection with the 1996 and 1997
property sales prior to distributions to Limited Partners in January and April
1997 and January 1998. As a result, interest income on short-term investments
increased during 1997 as compared to 1996.

Due to the repayment of the short-term loans from an affiliate in March 1996,
interest expense on short-term loans from an affiliate ceased in 1996.

The Partnership incurred higher postage and printing costs in connection with
its response to a tender offer during 1996. In addition, the Partnership
incurred higher accounting and portfolio management fees during 1996. These
were the primary reasons for the decrease in administrative expenses during
1997 as compared to 1996. 

In connection with the sale of the Chestnut Ridge - Phase II Apartments during
1996, the junior loan outstanding from an affiliate of the General Partner,
which had an outstanding balance of $1,714,747, including accrued interest of
$55,552, was forgiven. These amounts were recognized as extraordinary items and
classified as gains on forgiveness of debt for financial statement purposes.

In connection with the sales of the Antlers, Canyon Sands, Chesapeake, Chimney
Ridge, Quail Lakes, Ridgetree - Phase I, Sunnyoak Village and Woodland Hills
apartment complexes in 1996, the Partnership wrote-off the remaining
unamortized deferred financing expenses in the amounts of $818,320. In
addition, in connection with the sales of the Chestnut Ridge - Phase II,
Creekwood - Phase I, Quail Lakes and Woodland Hills apartment complexes in
1996, the Partnership paid $685,380 in prepayment penalties. These amounts were
recognized as extraordinary items and classified as debt extinguishment
expenses for financial statement purposes.
<PAGE>
Liquidity and Capital Resources
-------------------------------

The cash position of the Partnership decreased by approximately $4,931,000 as
of December 31, 1998 when compared to December 31, 1997 primarily due to the
January 1998 distribution to Limited Partners consisting primarily of Net Cash
Proceeds from the November 1997 sale of the Briarwood Place Apartments. The
Partnership used cash of approximately $120,000 in its operating activities to
pay administrative expenses which was partially offset by interest income
earned on short-term investments and refunds received from vendors related to
properties sold in 1997. The Partnership used cash to fund its financing
activities which consisted of a distribution to Limited Partners of
approximately $4,811,000. 

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. The Partnership sold its final real estate investment in November
1997. The Partnership has retained a portion of the cash from the property
sales to satisfy obligations of the Partnership as well as establish a reserve
for contingencies. 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 and costs stemming from litigation involving the Partnership
including, but not limited to, the lawsuits discussed in "Item 3. Legal
Proceedings". Due to this litigation, the Partnership will not be dissolved and
reserves will be held by the Partnership until the conclusion of all
contingencies. There can be no assurances as to the time frame for conclusion
of these contingencies.

The Partnership made distributions in 1998, 1997 and 1996 totaling $34.36,
$125.00 and $160.00 per Limited Partnership Interest, respectively. See
Statement of Partners' Capital (Deficit) for additional information.
Distributions were comprised of $34.36 and $125.00 per Interest of Net Cash
Proceeds in 1998 and 1997, respectively, and $4.00 per Interest of Net Cash
Receipts and $156.00 per Interest of Net Cash Proceeds in 1996.

Limited Partners have received distributions totaling $319.36 per $1,000
Interest, as well as certain tax benefits. Of this amount, $4.00 represents
Cash Flow from operations and $315.36 represents a return of Original Capital.
No additional distributions are anticipated to be made prior to the termination
of the Partnership. However, after paying final partnership expenses, any
remaining cash reserves will be distributed. Limited Partners will not recover
a substantial portion of their original investment.

The Partnership sold all of its remaining real property investments and
distributed a majority of the proceeds from these sales to Limited Partners in
1996 and 1997. Since the Partnership no longer has any operating assets, the
number of computer systems and programs necessary to operate the Partnership
has been significantly reduced. The Partnership relies on third party vendors
to perform most of its functions and has implemented a plan to determine the
Year 2000 compliance status of these key vendors. The Partnership is within its
timeline for having these plans completed prior to the year 2000.
<PAGE>
The Partnership's plan to determine the Year 2000 compliance status of its key
vendors involves the solicitation of information from these vendors through the
use of surveys, follow-up discussions and review of data where needed. The
Partnership has sent out surveys to these vendors and received back a majority
of these surveys. While the Partnership cannot guarantee Year 2000 compliance
by its key vendors, and in many cases will be relying on statements from these
vendors without independent verification, preliminary surveys indicate that the
key vendors performing services for the Partnership are aware of the issues and
are working on a solution to achieve compliance before the year 2000. The
Partnership is in the process of developing a contingency plan in the event any
of its key vendors are not Year 2000 compliant prior to the year 2000. As part
of its contingency plan, the Partnership will identify replacement vendors in
the event that current vendors are not substantially Year 2000 compliant by
June 30, 1999. The Partnership does not believe that failure by any of its key
vendors to be Year 2000 compliant by the year 2000 would have a material effect
on the business, financial position or results of operations of the
Partnership.

Certain statements in this report 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 statements regarding income or losses 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 from any
future results, performance or achievements expressed or implied by the
forward-looking statements. 

Item 7a. Quantitative and Qualitative Disclosures About Market Risk
-------------------------------------------------------------------

The supplemental financial information specified by Item 305 of Regulation S-K
is not applicable.

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.

The net effect of the differences between the financial statements and the tax
returns is summarized as follows:
<PAGE>
                       December 31, 1998           December 31, 1997    
                    -------------------------  -------------------------
                      Financial        Tax       Financial        Tax
                      Statements     Returns    Statements      Returns 
                      ----------    ---------   ----------     ---------
Total assets           $2,484,650  $18,480,809  $7,455,003    $23,449,263
Partners' capital
  accounts:
    General Partner          None         None        None           None
    Limited Partners    2,387,840   18,384,002   7,314,438     23,324,280
Net (loss) income:
    General Partner          None         None     991,280      1,544,850
    Limited Partners     (115,819)    (129,499) 21,359,474     30,310,426
    Per Limited Part-
      nership Interest   (0.83)(A)       (0.92)   152.57(A)        216.50

(A) Amount represents basic and diluted net (loss) income per Limited
Partnership Interest.

Item 9. Changes in and Disagreements with Accountants on Accounting and
-----------------------------------------------------------------------
Financial Disclosure
--------------------

There have been no changes in or disagreements with accountants on any matter
of accounting principles, practices or financial statement disclosure.
<PAGE>
                                   PART III

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

(a) Neither the Registrant nor Balcor Partners-XV, 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 Managing Director, Chief                Jayne A. Kosik
   Financial Officer, Treasurer
   and Assistant Secretary                           

Thomas E. Meador (age 51) 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 member of the board of directors 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. 

Mr. Meador is on the Board of Directors of Grubb & Ellis Company, a publicly
traded commercial real estate firm. Mr. Meador was elected to the Board of
Grubb & Ellis Company in May 1998. Mr. Meador is also a director of AMLI
Commercial Properties Trust, a private real estate investment trust that owns
office and industrial buildings in the Chicago, Illinois area. Mr. Meador was
elected to the Board of AMLI Commercial Properties Trust in August 1998. 

Alexander J. Darragh (age 44) joined Balcor in September 1988 and is
responsible for real estate advisory services for Balcor and American Express
Company. Mr. Darragh received masters' degrees in Urban Geography from Queen's
University and in Urban Planning from Northwestern University.

Jayne A. Kosik (age 41) joined Balcor in August 1982 and, as Chief Financial
Officer, is responsible for Balcor's financial, human resources and treasury
functions. Ms Kosik is also a member of the board of directors of the Balcor
Company. 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 Senior Managing Director of The
Balcor Company. Ms. Kosik is a Certified Public Accountant.
<PAGE>
(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 1998.

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

The Registrant has not paid and does not propose to pay any remuneration to the
executive officers and directors of the General Partner. The executive 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. However, the General Partner believes that any
such compensation attributable to services performed for the Registrant is
immaterial to the Registrant. See Note 8 of Notes to Financial Statements for
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             WIG 84              10,858.73      7.76%
Partnership         Partners            Limited
Interests           Chicago,            Partnership
                    Illinois            Interests

Limited             Metropolitan        8,043.61       5.75%
Partnership         Acquisition         Limited 
Interests           VII,                Partnership
                    Greenville,         Interests
                    South Carolina

For purposes of this Item 12, WIG 84 Partners is an affiliate of Metropolitan
Acquisition VII and, collectively, they own 13.51% of the Interests.

(b) Balcor Partners-XV and its officers and partners own as a group the
following Limited Partnership Interests of the Registrant:
<PAGE>
                                  Amount
                               Beneficially
         Title of Class            Owned       Percent of Class
         --------------        -------------   ----------------

         Limited Partnership
           Interests           116 Interests     Less than 1%

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

In addition, Balcor LP Corp., an affiliate of the General Partner, holds title
to 88 Limited Partnership Interests in the Partnership due exclusively to
instances in which Limited Partners abandoned title to their Limited
Partnership Interests. Balcor LP Corp. is a nominee holder only of such
Interests and has disclaimed any economic or beneficial ownership in said
Interests. All distributions of cash payable with respect to such Interests
held by Balcor LP Corp. are returned to the Partnership for distribution to
other Limited Partners in accordance with the Partnership Agreement.

(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 8 of Notes to Financial Statements for 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, Financial Statement Schedules, 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 of Limited Partnership and Amended and
Restated Certificate of Limited Partnership, previously filed as Exhibits 3 and
4.1 to Amendment No. 1 to the Registrant's Registration Statement on Form S-11
dated December 16, 1983 (Registration No. 2-86317) are incorporated herein by
reference.

(4) Form of Confirmation regarding Interests in the Registrant set forth as
Exhibit 4.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1992 are incorporated herein by reference.

(10) Material Contracts:

(i) Agreement of Sale and attachments thereto relating to the sale of the
Briarwood Place Apartments, Chandler, Arizona, previously filed as exhibit (10)
to the Registrant's Current Report on Form 8-K dated May 22, 1997, is
incorporated herein by reference.

(ii) Amendment to Agreement of Sale and Escrow Agreement relating to the sale
of the Briarwood Place Apartments, Chandler, Arizona, previously filed as
Exhibit (10)(j)(ii) to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997, is incorporated herein by reference.

(iii) Second Amendment to Agreement of Sale and Escrow Agreement relating to
the sale of the Briarwood Place Apartments, Chandler, Arizona, previously filed
as Exhibit (10)(j)(iii) to the Registrant's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1997, is incorporated herein by reference.

(iv) Third Amendment to Agreement of Sale and Escrow Agreement relating to the
sale of the Briarwood Place Apartments, Chandler, Arizona, previously filed as
Exhibit (10)(j)(iv) to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997, is incorporated herein by reference.

(v) Fourth Amendment to Agreement of Sale and Escrow Agreement relating to the
sale of the Briarwood Place Apartments, Chandler, Arizona, previously filed as
Exhibit (10)(j)(v) to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997, is incorporated herein by reference.

(vi) Fifth Amendment to Agreement of Sale and Escrow Agreement relating to the
sale of the Briarwood Place Apartments, Chandler, Arizona, previously filed as
Exhibit (10)(j)(vi) to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997, is incorporated herein by reference.
<PAGE>
(vii) Sixth Amendment to Agreement of Sale and Escrow Agreement relating to the
sale of the Briarwood Place Apartments, Chandler, Arizona, previously filed as
Exhibit (10)(j)(vii) to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997, is incorporated herein by reference.

(viii) Letter Agreement dated November 6, 1997 relating to the sale of the
Briarwood Place Apartments, Chandler, Arizona, previously filed as Exhibit
(10)(j)(viii) to the Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997, is incorporated herein by reference.

(ix) Letter Agreement dated November 7, 1997 relating to the sale of the
Briarwood Place Apartments, Chandler, Arizona, previously filed as Exhibit
(10)(j)(ix) to the Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997, is incorporated herein by reference.

(27) Financial Data Schedule of the Registrant for 1998 is attached hereto. 

(b) Reports on Form 8-K:  No Reports on Form 8-K were filed during the quarter
ended December 31, 1998.

(c) Exhibits:  See Item 14(a)(3) above.
<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 REALTY INVESTORS-84


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

Date: March 19, 1999                  
      --------------

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    
----------------------   -------------------------------     ------------
                         President, Chief Executive
                         Officer (Principal Executive
                         Officer) of Balcor Partners-XV,
                         the General Partner
/s/ Thomas E. Meador                                        March 19, 1999
--------------------                                        --------------
    Thomas E. Meador

                         Senior Managing Director and Chief
                         Financial Officer (Principal
                         Accounting and Financial Officer) 
                         of Balcor Partners-XV,
                         the General Partner
/s/ Jayne A. Kosik                                          March 19, 1999
------------------                                          --------------
    Jayne A. Kosik
<PAGE>
                         INDEX TO FINANCIAL STATEMENTS

Report of Independent Accountants

Financial Statements:

Balance Sheets, December 31, 1998 and 1997

Statements of Partners' Capital (Deficit), for the years ended December 31,
1998, 1997 and 1996

Statements of Income and Expenses, for the years ended December 31, 1998, 1997
and 1996

Statements of Cash Flows, for the years ended December 31, 1998, 1997 and 1996

Notes to Financial Statements


Financial Statement Schedules are omitted for the reason that they are
inapplicable or equivalent information has been included elsewhere herein.
<PAGE>
                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Partners of
Balcor Realty Investors-84:

In our opinion, the accompanying balance sheets and the related statements of
partners' capital (deficit), of income and expenses and of cash flows present
fairly, in all material respects, the financial position of Balcor Realty
Investors 84 An Illinois Limited Partnership (the "Partnership") at December
31, 1998 and 1997, and the results of its operations and its cash flows for
each of the three years in the period ended December 31, 1998, in conformity
with generally accepted accounting principles. 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 of these statements in accordance with generally accepted
auditing standards which 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, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.

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. As of December 31, 1998, the Partnership no longer has
an ownership interest in any real estate investment. Upon resolution of the
litigation described in Note 12 to the financial statements, the Partnership
intends to cease operations and dissolve.

PricewaterhouseCoopers LLP

Chicago, Illinois
March 17, 1999
<PAGE>
                          BALCOR REALTY INVESTORS-84
                       (An Illinois Limited Partnership)

                                BALANCE SHEETS
                          December 31, 1998 and 1997

                                    ASSETS

                                       
                                               1998              1997
                                          ---------------   --------------
Cash and cash equivalents                 $    2,477,554    $   7,408,757
Accounts and accrued interest receivable           7,096           46,246
                                          ---------------   --------------
                                          $    2,484,650    $   7,455,003
                                          ===============   ==============


                      LIABILITIES AND PARTNERS' CAPITAL 

Accounts payable                          $       65,100    $      83,280
Due to affiliates                                 31,710           57,285
                                          ---------------   --------------
    Total liabilities                             96,810          140,565
                                          ---------------   --------------
Commitments and contingencies

Limited Partners' capital
  (140,000 Interests issued 
  and outstanding)                             2,387,840        7,314,438
General Partner's capital                           None             None
                                          ---------------   --------------
    Total partners' capital                    2,387,840        7,314,438
                                          ---------------   --------------
                                          $    2,484,650    $   7,455,003
                                          ===============   ==============

The accompanying notes are an integral part of the financial statements.
<PAGE>
                          BALCOR REALTY INVESTORS-84
                       (An Illinois Limited Partnership)

                   STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
             for the years ended December 31, 1998, 1997 and 1996


                                   Partners' Capital (Deficit) Accounts
                               -------------- -------------- -------------
                                                  General       Limited
                                    Total         Partner     Partners (A)
                               -------------- -------------- -------------
Balance at
  December 31, 1995            $ (27,542,892) $  (1,515,346) $(26,027,546)

Cash distributions to 
  Limited Partners (B)           (22,400,000)                 (22,400,000)

Net income for the year
  ended December 31, 1996         52,406,576        524,066    51,882,510
                               -------------- -------------- -------------
Balance at 
  December 31, 1996                2,463,684       (991,280)    3,454,964

Cash distributions to
  Limited Partners (B)           (17,500,000)                 (17,500,000)

Net income for the year
  ended December 31, 1997         22,350,754        991,280    21,359,474
                               -------------- -------------- -------------
Balance at 
  December 31, 1997                7,314,438           None     7,314,438

Cash distributions to
  Limited Partners (B)            (4,810,779)                  (4,810,779)

Net loss for the year
  ended December 31, 1998           (115,819)                    (115,819)
                               -------------- -------------- -------------
Balance at 
  December 31, 1998            $   2,387,840           None  $  2,387,840
                               ============== ============== =============

(A) Includes a $110,000 investment by the General Partner, which is 
    treated on the same basis as the other Limited Partnership Interests.

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

                                    1998           1997          1996
                                -------------  -------------  ------------
First Quarter                  $       34.36  $       67.00          None
Second Quarter                          None          48.00          None
Third Quarter                           None           None  $      80.00
Fourth Quarter                          None          10.00         80.00

The accompanying notes are an integral part of the financial statements.
<PAGE>
                          BALCOR REALTY INVESTORS-84
                       (An Illinois Limited Partnership)

                       STATEMENTS OF INCOME AND EXPENSES
             for the years ended December 31, 1998, 1997 and 1996


                                    1998           1997          1996
                               -------------- -------------- -------------
Income:
  Rental and service                          $   2,757,412  $ 18,666,688
  Interest on short-term
    investments                $     150,255        426,230       363,521
  Other income                        11,903        328,366
                               -------------- -------------- -------------
    Total income                     162,158      3,512,008    19,030,209
                               -------------- -------------- -------------
Expenses:
  Interest on mortgage 
    notes payable                                   771,288     5,544,510
  Interest on short-term 
    loans from an affiliate                                        49,045
  Lender participation fee                          225,000
  Depreciation                                      381,353     2,544,366
  Amortization of deferred 
    expenses                                         22,960       163,862
  Property operating                              1,174,052     7,934,800
  Real estate taxes                                 165,771     1,481,427
  Property management fees                          135,303       956,610
  Administrative                     277,977        457,772       771,325
                               -------------- -------------- -------------
    Total expenses                   277,977      3,333,499    19,445,945
                               -------------- -------------- -------------
(Loss) income before gains
  on sales of properties
  and extraordinary items           (115,819)       178,509      (415,736)
Gains on sales of properties                     22,126,211    52,611,265
                               -------------- -------------- -------------
(Loss) income before 
  extraordinary items               (115,819)    22,304,720    52,195,529
                               -------------- -------------- -------------
Extraordinary items:
  Gains on forgiveness
    of debt                                         111,245     1,714,747
  Debt extinguishment 
    expenses                                        (65,211)   (1,503,700)
                                              -------------- -------------
  Total extraordinary items                          46,034       211,047
                               -------------- -------------- -------------
Net (loss) income              $    (115,819) $  22,350,754  $ 52,406,576
                               ============== ============== =============

The accompanying notes are an integral part of the financial statements.
<PAGE>
                          BALCOR REALTY INVESTORS-84
                       (An Illinois Limited Partnership)

                       STATEMENTS OF INCOME AND EXPENSES
             for the years ended December 31, 1998, 1997 and 1996
                                  (Continued)

                                     1998          1997          1996
                               -------------- -------------- -------------
Income before 
  extraordinary items 
  allocated to General 
  Partner                              None   $     989,238  $    521,955
                               ============== ============== =============
(Loss) income before
  extraordinary items 
  allocated to Limited 
  Partners                     $    (115,819) $  21,315,482  $ 51,673,574
                               ============== ============== =============
(Loss) income before
  extraordinary items per
  Limited Partnership 
  Interest (140,000 issued
  and outstanding) -
  Basic and Diluted            $       (0.83) $      152.26  $     369.10
                               ============== ============== =============
Extraordinary items 
  allocated to General 
  Partner                               None  $       2,042  $      2,111
                               ============== ============== =============
Extraordinary items 
  allocated to Limited
  Partners                              None  $      43,992  $    208,936
                               ============== ============== =============
Extaordinary items per Limited
  Partnership Interest
  (140,000 issued and
  outstanding) -
  Basic and Diluted                     None  $        0.31  $       1.49
                               ============== ============== =============
Net income allocated 
  to General Partner                    None  $     991,280  $    524,066
                               ============== ============== =============
Net (loss) income allocated 
  to Limited Partners          $    (115,819) $  21,359,474  $ 51,882,510
                               ============== ============== =============
Net (loss) income per Limited
  Partnership Interest
  (140,000 issued and
  outstanding) -
  Basic and Diluted            $       (0.83) $      152.57  $     370.59
                               ============== ============== =============

The accompanying notes are an integral part of the financial statements.
<PAGE>
                          BALCOR REALTY INVESTORS-84
                       (An Illinois Limited Partnership)

                           STATEMENTS OF CASH FLOWS
             for the years ended December 31, 1998, 1997 and 1996


                                    1998           1997           1996
                               -------------------------------------------
Operating activities:
  Net (loss) income            $    (115,819) $  22,350,754  $ 52,406,576
  Adjustments to reconcile      
    net (loss) income to net 
    cash (used in) or provided
    by operating activities:
      Other income                                 (252,462)
      Extraordinary items:
        Gains on forgiveness
          of debt                                  (111,245)   (1,714,747)
        Debt extinguishment
          expenses                                   65,211       818,320
      Gains on sales of
        properties                              (22,126,211)  (52,611,265)
      Depreciation of
        properties                                  381,353     2,544,366
      Amortization of 
        deferred expenses                            22,960       163,862
      Net change in:
        Escrow deposits                              68,590     1,668,574
        Accounts and accrued
          interest receivable         39,150      1,071,901      (454,545)
        Prepaid expenses                             74,940       242,042
        Accounts payable             (18,180)      (258,035)      124,432
        Due to affiliates            (25,575)      (130,628)       65,304
        Accrued liabilities                         (33,371)   (1,073,821)
        Security deposits                          (216,248)     (340,880)
                               -------------- -------------- -------------
  Net cash (used in) or
    provided by operating 
    activities                      (120,424)       907,509     1,838,218
                               -------------- -------------- -------------
Investing activities:
  Proceeds from sales of
    properties                                   39,633,333    89,127,646
  Payment of selling costs                       (1,102,148)   (2,088,105)
                                              -------------- -------------
  Net cash provided by 
    investing activities                         38,531,185    87,039,541
                                              -------------- -------------

The accompanying notes are an integral part of the financial statements.
<PAGE>
                          BALCOR REALTY INVESTORS-84
                       (An Illinois Limited Partnership)

                           STATEMENTS OF CASH FLOWS
             for the years ended December 31, 1998, 1997 and 1996
                                  (Continued)


                                    1998           1997          1996
                               -------------- -------------- -------------
Financing activities:
  Distributions to Limited
    Partners                   $  (4,810,779) $ (17,500,000) $(22,400,000)
  Proceeds from issuance of
    mortgage note payable - 
    affiliate                                                     143,456
  Repayment of mortgage note
    payable - affiliate                            (234,721)
  Repayment of loans payable
    - affiliate                                                (6,623,202)
  Repayment of mortgage 
    notes payable                               (25,233,144)  (48,441,864)
  Principal payments on
    mortgage notes payable                         (216,825)     (987,645)
  Release of financing
    escrows                                                       191,548
                               -------------- -------------- -------------
  Net cash used in
    financing activities          (4,810,779)   (43,184,690)  (78,117,707)
                               -------------- -------------- -------------
Net change in cash and cash
  equivalents                     (4,931,203)    (3,745,996)   10,760,052

Cash and cash equivalents 
  at beginning of year             7,408,757     11,154,753       394,701
                               -------------- -------------- -------------
Cash and cash equivalents 
  at end of year               $   2,477,554  $   7,408,757  $ 11,154,753
                               ============== ============== =============

The accompanying notes are an integral part of the financial statements.
<PAGE>
                          BALCOR REALTY INVESTORS-84
                       (An Illinois Limited Partnership)

                         NOTES TO FINANCIAL STATEMENTS

1. Nature of Partnership's Business: 

Balcor Realty Investors-84 (the "Partnership") has retained cash reserves from
the sale of its real estate investments for contingencies which exist or may
arise. The Partnership's operations currently consist of interest income earned
on short-term investments and the payment of administrative expenses.

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. The Partnership sold its final real estate investment in November
1997. The Partnership has retained a portion of the cash from the property
sales to satisfy obligations of the Partnership as well as to establish a
reserve for contingencies. 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 and costs stemming from litigation involving the
Partnership including, but not limited to, the lawsuits discussed in Note 12 of
Notes to Financial Statements. Due to this litigation, the Partnership will not
be dissolved and reserves will be held by the Partnership until the conclusion
of all contingencies. There can be no assurances as to the time frame for
conclusion of these contingencies.

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) Depreciation expense was computed using straight-line and accelerated
methods. Rates used in the determination of depreciation were based upon the
following estimated useful lives:

               Buildings and improvements       20 to 30 years
               Furniture and fixtures             5 to 7 years

Maintenance and repairs were charged to expense when incurred. Expenditures for
improvements were charged to the related asset account.

As properties were sold, the related costs and accumulated depreciation were
removed from the respective accounts. Any gain or loss on disposition was
recognized in accordance with generally accepted accounting principles.
<PAGE>
(c) The Partnership recorded its investments in real estate at the lower of
cost or fair value, and periodically assessed, but not less than on an annual
basis, possible impairment to the value of its properties. The General Partner
estimated the fair value of its properties based on the current sales price
less estimated closing costs. The General Partner determined that no impairment
in value had occurred prior to the sales of the properties. The General Partner
considered the method referred to above to result in a reasonable measurement
of a property's fair value, unless other factors affecting the property's value
indicated otherwise.

(d) Deferred expenses consisted of financing fees which were amortized over the
terms of the respective agreements. Upon sale, any remaining unamortized
balance was recognized as debt extinguishment expense and classified as an
extraordinary item.

(e) The Partnership calculates the fair value of its financial instruments
based on estimates using present value techniques. The Partnership includes
this additional information in the notes to the financial statements when the
fair value is different than the carrying value of those financial instruments.
When the fair value reasonably approximates the carrying value, no additional
disclosure is made.

(f) For financial statement purposes, prior to 1997, the partners were
allocated income and loss in accordance with the provisions in the Partnership
Agreement. In order for the capital account balances to appropriately reflect
the partners' remaining economic interests in the Partnership, the income
(loss) allocations have been adjusted. 

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

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

(i) Revenue is recognized on an accrual basis in accordance with generally
accepted accounting principles.

(j) Statement of Financial Accounting Standards, No. 128, "Earnings per Share"
was adopted by the Partnership effective for the year-ended December 31, 1997
and has been applied to the prior earnings period presented in the financial
statements. Since the Partnership has no dilutive securities, there is no
difference between basic and diluted net income per Limited Partnership
Interest.

(k) Certain reclassifications of a prior year's information were made to
conform to the 1998 presentation.
<PAGE>
4. Partnership Agreement:

The Partnership was organized in September 1982. The Partnership Agreement
provides for Balcor Partners-XV to be the General Partner and for the admission
of Limited Partners through the sale of up to 150,000 Limited Partnership
Interests at $1,000 per Interest, 140,000 of which were sold on or prior to
June 27, 1984, the termination date of the offering.

The Partnership Agreement generally provides that the General Partner will be
allocated 1% of the profits and losses and the Limited Partners will be
allocated 99% of the profits and losses. For financial statement purposes,
prior to 1997, the partners were allocated income and loss in accordance with
the provisions in the Partnership Agreement. In order for the capital account
balances to appropriately reflect the partners' remaining economic interests in
the Partnership, the income (loss) allocations have been adjusted. 

One hundred percent of Net Cash Receipts available for distribution was
distributed to the holders of Interests in proportion to their participating
percentages as of the record date for such distributions. Under certain
circumstances, the General Partner would have participated in the Net Cash
Proceeds of the sale or refinancing of Partnership properties. The General
Partner's participation was limited to 15% of excess Net Cash Proceeds after
the return to holders of Interests their Original Capital plus certain levels
of return as specified by the Partnership Agreement. Since the required
subordination levels were not met, the General Partner has not received any
distributions of Net Cash Receipts or Net Cash Proceeds during the lifetime of
the Partnership.

5. Mortgage Notes Payable:

During 1997 and 1996 the Partnership incurred interest expense on mortgage
notes payable to non-affiliates of $771,288 and $5,403,319 and paid interest
expense of $790,028 and $5,403,319, respectively. See Note 8 of Notes to
Financial Statements for interest paid and incurred on loans payable to
affiliates.

6. Management Agreements:

The Partnership's properties were managed by a third-party management company
prior to the sale of the properties. These management agreements provided for
annual fees of 5% of gross operating receipts.

7. Tax Accounting:

The Partnership keeps its books in accordance with the Internal Revenue Code,
rules and regulations promulgated thereunder, and existing interpretations
thereof. The accompanying financial statements, which are prepared in
accordance with generally accepted accounting principles, will differ from the
tax returns due to the different treatment of various items as specified in the
Internal Revenue Code. The net effect of these accounting differences is that
the net loss for 1998 in the financial statements is $13,680 less than the tax
loss of the Partnership for the same period. 
<PAGE>
8. Transactions with Affiliates:

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

                     Year Ended            Year Ended         Year Ended
                      12/31/98              12/31/97            12/31/96       
                  ----------------- -------------------- ------------------- 
                    Paid    Payable    Paid      Payable    Paid     Payable
                  -------- -------- ---------- --------- --------- ---------
Reimbursement
 of expenses to
 General Partner
 at cost:
   Accounting      $19,925    $7,422   $57,003   $12,227   $ 20,498  $22,640
   Data processing   2,536       872     5,372     1,664      6,694     None
   Legal            11,919     4,498    34,345     7,986     20,388   22,519
   Other             5,825      None    24,371     5,825      5,424    5,991
   Portfolio mgt.   50,715    18,918   145,397    29,583    122,976  136,763

Prior to May 1995, the Partnership participated in an insurance deductible
program with other affiliated partnerships in which the program paid claims up
to the amount of the deductible under the master insurance policy for its
properties. The program was administered by an affiliate of the General Partner
who received no fee for administering the program. However, the General Partner
was reimbursed for program expenses. The Partnership paid premiums to the
deductible insurance program relating to claims for periods prior to May 1,
1995 of $32,756 in 1996.

During 1996, the Partnership repaid the General Partner loan primarily with
proceeds from the sale of Chimney Ridge Apartments. During 1996, the
Partnership incurred interest expense of $49,045 and paid interest expense of
$119,165 on this loan. Interest expense was computed at the American Express
Company cost of funds rate plus a spread to cover administrative costs. The
interest rate was 5.85% at the date of the loan repayment. 

As of December 31, 1996, the Partnership had a junior mortgage loan outstanding
from The Balcor Company ("TBC"), an affiliate of the General Partner, relating
to the Woodland Hills Apartments in the amount of $345,966, which included
accrued interest of $9,094. The accrued interest was included in accrued
liabilities on the Partnership's balance sheet. In February 1997, the
Partnership paid $234,721 in full satisfaction of this loan, representing a
discount of $111,245 which represented the forgiven portion of the loan. In
September 1996, the junior loan outstanding from TBC related to the Chestnut
Ridge - Phase II Apartments was increased by $143,456 in order to meet the
minimum Net Cash Proceeds requirement from the sale of this property. The loan
in the amount of $1,714,747, which included accrued interest of $55,552, was
forgiven in connection with the sale of the property. During 1996, the
Partnership incurred interest expense of $141,191 and paid interest expense of
$114,812 on these affiliated mortgage loans. 
<PAGE>
9. Property Sales:

(a) In November 1997, the Partnership sold the Briarwood Place Apartments in an
all cash sale for $9,800,000. From the proceeds of the sale, the Partnership
paid $5,760,201 to the third party mortgage holder in full satisfaction of the
first mortgage loan, and paid $217,600 in selling costs. The basis of the
property was $4,205,167, which is net of accumulated depreciation of
$3,442,779. For financial statement purposes, the Partnership recognized a gain
of $5,377,233 from the sale of this property.

b) In June 1997, the Partnership sold the Courtyards of Kendall Apartments in
an all cash sale for $11,000,000. From the proceeds of the sale, the
Partnership paid $8,736,414 to the third party mortgage holder in full
satisfaction of the first mortgage loan, $225,000 to the mortgage holder as a
lender participation fee and $517,375 in selling costs. The lender
participation fee represents additional interest paid to the lender calculated
as a percentage of the sale price in excess of a certain amount specified in
the loan agreement. The basis of the property was $3,580,684, which is net of
accumulated depreciation of $6,681,665. For financial statement purposes, the
Partnership recognized a gain of $6,901,941 from the sale of this property. 

c) In January 1997, the Partnership sold the Somerset Pointe Apartments in an
all cash sale for $18,833,333. From the proceeds of the sale, the Partnership
paid $10,736,529 to the third party mortgage holder in full satisfaction of the
first mortgage loan, and paid $367,173 in selling costs. The basis of the
property was $8,619,123, which is net of accumulated depreciation of
$6,095,916. For financial statement purposes, the Partnership recognized a gain
of $9,847,037 from the sale of this property.

(d) In December 1996, the Partnership sold the Chesapeake Apartments in an all
cash sale for $7,950,000. From the proceeds of the sale, the Partnership paid
$5,072,714 to the third party mortgage holder in full satisfaction of the first
mortgage loan and $249,579 in selling costs. The basis of the property was
$4,899,461, which is net of accumulated depreciation of $3,811,596. For
financial statement purposes, the Partnership recognized a gain of $2,800,960
from the sale of this property.

(e) In November 1996, the Partnership sold the Woodland Hills Apartments in an
all cash sale for $7,300,000. From the proceeds of the sale, the Partnership
paid $4,910,568 to the third party mortgage holder in full satisfaction of the
first mortgage loan, $258,500 in selling costs and $96,211 of prepayment
penalties. The Partnership received net proceeds of $2,034,721 from the sale.
The terms of the 1993 refinancing of this property provided that minimum net
proceeds of $1,800,000 were to be received by the Partnership from the sale of
this property before repayment of the affiliate loan. As a result, in February
1997, the Partnership paid $234,721 in full satisfaction of the junior loan
outstanding from TBC resulting in a discount of $111,245. The basis of the
property was $3,798,569, which is net of accumulated depreciation of
$2,730,124. For financial statement purposes, the Partnership recognized a gain
of $3,242,931 from the sale of this property.
<PAGE>
(f) In November 1996, the Partnership sold the Quail Lakes Apartments in an all
cash sale for $10,500,000. From the proceeds of the sale, the Partnership paid
$6,683,238 and $13,695 in full satisfaction of the first and second mortgage
loans, $350,201 in selling costs and $267,330 of prepayment penalties. The
basis of the property was $6,096,614, which is net of accumulated depreciation
of $4,778,294. For financial statement purposes, the Partnership recognized a
gain of $4,053,185 from the sale of this property.

(g) In September 1996, the Partnership sold the Chestnut Ridge - Phase II
Apartments in an all cash sale for $4,696,600. From the proceeds of the sale,
the Partnership paid $3,073,783 to the third party mortgage holder in full
satisfaction of the first mortgage loan, $171,284 in selling costs and $153,689
in prepayment penalties. The Partnership received net proceeds of $1,297,844
from the sale. However, the terms of the 1994 refinancing of this property
provided that minimum net proceeds of $1,441,300 were to be received from the
sale of this property. As a result, $143,456 was contributed to the Partnership
through an increase to the balance of the junior loan outstanding from TBC. The
basis of the property was $3,519,385, which is net of accumulated depreciation
of $2,163,522. For financial statement purposes, the Partnership recognized a
gain of $1,005,931 from the sale of this property.

(h) In September 1996, the Partnership sold the Creekwood - Phase I Apartments
in an all cash sale for $8,389,800. From the proceeds of the sale, the
Partnership paid $5,604,985 to the third party mortgage holder in full
satisfaction of the first mortgage loan, $203,068 in selling costs and $168,150
in prepayment penalties. The basis of the property was $4,284,091, which is net
of accumulated depreciation of $2,758,600. For financial statement purposes,
the Partnership recognized a gain of $3,902,641 from the sale of this property.

(i) In July 1996, the Partnership sold the Sunnyoak Village Apartments in an
all cash sale for $22,200,000. From the proceeds of the sale, the Partnership
paid $13,598,689 to the third party mortgage holder in full satisfaction of the
first mortgage loan, and paid $181,500 in selling costs. The basis of the
property was $10,571,735, which is net of accumulated depreciation of
$7,676,011. For financial statement purposes, the Partnership recognized a gain
of $11,446,765 from the sale of this property.

(j) In June 1996, the Partnership sold the Ridgetree - Phase I Apartments in an
all cash sale for $11,100,000. From the proceeds of the sale, the Partnership
paid $9,484,192 to the third party mortgage holder in full satisfaction of the
first and second mortgage loans, and paid $126,000 in selling costs. The basis
of the property was $8,491,725, which is net of accumulated depreciation of
$5,512,986. For financial statement purposes, the Partnership recognized a gain
of $2,482,275 from the sale of this property.

(k) In June 1996, the Partnership sold the Canyon Sands Apartments in an all
cash sale for $14,650,000. The purchaser of the property took title subject to
the existing first mortgage loan in the amount of $8,957,106, which represents
a noncash transaction to the Partnership. Accordingly, the noncash aspect of
this transaction is not presented in the Partnership's Statements of Cash
Flows. From the proceeds of the sale, the Partnership paid $124,875 in selling
costs. The basis of the property was $6,253,071, which is net of accumulated
depreciation of $4,914,899. For financial statement purposes, the Partnership
recognized a gain of $8,272,054 from the sale of this property.
<PAGE>
(l) In May 1996, the Partnership sold the Antlers Apartments in an all cash
sale for $15,000,000. The purchaser of the property took title subject to the
existing first mortgage loan in the amount of $10,108,860, which represents a
noncash transaction to the Partnership. Accordingly, the noncash aspect of this
transaction is not presented in the Partnership's Statements of Cash Flows.
From the proceeds of the sale, the Partnership paid $86,456 in selling costs.
The basis of the property was $8,395,037, which is net of accumulated
depreciation of $5,118,659. For financial statement purposes, the Partnership
recognized a gain of $6,518,507 from the sale of this property.

(m) In February 1996, the Partnership sold the Chimney Ridge Apartments in an
all cash sale for $13,650,000. The purchaser of the property took title subject
to the existing first mortgage loan in the amount of $7,242,788, which
represents a noncash transaction to the Partnership. Accordingly, the noncash
aspect of this transaction is not presented in the Partnership's Statements of
Cash Flows. From the proceeds of the sale, the Partnership paid $336,642 in
selling costs. The basis of the property was $4,427,342, which is net of
accumulated depreciation of $3,137,301. For financial statement purposes, the
Partnership recognized a gain of $8,886,016 from the sale of this property.

10. Extraordinary Items:

(a) In connection with the sales of the Somerset Pointe and Briarwood Place
apartment complexes in 1997, the Partnership wrote-off the remaining
unamortized deferred expenses in the amount of $51,536 and $13,675,
respectively. For financial statement purposes, these amounts were recognized
as debt extinguishment expenses and classified as extraordinary items.

(b) In February 1997, the Partnership paid $234,721 in full satisfaction of the
$345,966 junior mortgage loan from TBC, which included accrued interest of
$9,094 relating to the Woodland Hills Apartments which was sold in November
1996. The repayment resulted in a discount of $111,245 which was recognized as
an extraordinary gain on forgiveness of debt for financial statement purposes.

(c) In connection with the sales of the Chestnut Ridge - Phase II, Creekwood-
Phase I, Quail Lakes and Woodland Hills apartment complexes during 1996, the
Partnership paid $685,380 of loan prepayment penalties. In addition, the
Partnership wrote-off the remaining unamortized deferred expenses in the amount
of $818,320 related to eight of the ten properties sold during 1996. These
amounts were recognized as debt extinguishment expenses and classified as
extraordinary items. 

(d) In connection with the sale of the Chestnut Ridge - Phase II Apartments in
September 1996, the junior loan due to TBC, which had an outstanding balance of
$1,714,747, including accrued interest of $55,552, was forgiven which was
recognized as an extraordinary gain on forgiveness of debt for financial
statement purposes. 

11. Other Income:

(a) The Partnership recognized other income in 1998 primarily due to refunds
received from vendors relating to certain of the properties sold in 1997. 
<PAGE>
(b) In connection with the 1997 sale of Somerset Pointe Apartments, the
Partnership recognized other income of $252,462 representing the difference
between the contractual amount of the first mortgage loan and the carrying
amount of the loan for financial statement purposes. In addition, the
Partnership recognized other income during 1997 of $75,904 primarily in
connection with a partial refund of prior years' insurance premiums relating to
the Partnership's properties.

12. Contingencies:

The Partnership is currently involved in two related lawsuits, Masri vs. 
Lehman Brothers, Inc., et al. and Bruss, et al. vs. Lehman Brothers, Inc., et 
al., whereby the Partnership and certain affiliates have been named as 
defendants alleging substantially similar claims involving certain state 
securities and common law violations with regard to the property acquisition
process of the Partnership, and to the adequacy and accuracy of disclosures 
of information concerning, as well as marketing efforts related to, the 
offering of the Limited Partnership Interests of the Partnership. The 
defendants continue to vigorously contest these actions. A plaintiff class 
has not been certified in either action. With respect to the Masri case,
no determinations upon any significant issues have been made. The Bruss 
complaint was filed on January 25, 1999. It is not determinable at this time how
the outcome of either action will impact the remaining cash reserves of 
the Partnership. The Partnership believes it has meritorious defenses to 
contest the claims. 
<PAGE>