SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                                   FORM 10-Q
(Mark One)
  X  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
-----
     EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 1999
                               -------------
                                      OR
     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
-----
     EXCHANGE ACT OF 1934.

For the transition period from              to
                               ------------    ------------
Commission file number 0-14353
                       -------

                    BALCOR REALTY INVESTORS 85-SERIES I
                     A REAL ESTATE LIMITED PARTNERSHIP
          -------------------------------------------------------
          (Exact name of registrant as specified in its charter)

          Illinois                                      36-3244978
-------------------------------                     -------------------
(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
                                                   --------------

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
    -----     -----

                     BALCOR REALTY INVESTORS 85 - SERIES I
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                                BALANCE SHEETS
                      June 30, 1999 and December 31, 1998
                                  (Unaudited)

                                    ASSETS

                                                1999            1998
                                           --------------- ---------------
Cash and cash equivalents                  $    1,812,699  $    1,854,844
Accrued interest receivable                         9,617           6,129
                                           --------------- ---------------
                                           $    1,822,316  $    1,860,973
                                           =============== ===============



                  LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

Accounts payable                           $       70,579  $       62,447
Due to affiliates                                  22,813          22,486
                                           --------------- ---------------
     Total liabilities                             93,392          84,933
                                           --------------- ---------------
Commitments and contingencies

Limited Partners' capital (82,697
  Interests issued and outstanding)             2,034,953       2,082,069
General Partner's deficit                        (306,029)       (306,029)
                                           --------------- ---------------
     Total partners' capital                    1,728,924       1,776,040
                                           --------------- ---------------
                                           $    1,822,316  $    1,860,973
                                           =============== ===============

The accompanying notes are an integral part of the financial statements.

                     BALCOR REALTY INVESTORS 85 - SERIES I
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                       STATEMENTS OF INCOME AND EXPENSES
                for the six months ended June 30, 1999 and 1998
                                  (Unaudited)

                                                 1999            1998
                                           --------------- ---------------
Income:
  Interest on short-term investments       $       44,922  $       52,523
                                           --------------- ---------------
    Total income                                   44,922          52,523
                                           --------------- ---------------
Expenses:
  Property operating                                                6,519
  Administrative                                   92,038         132,961
                                           --------------- ---------------
    Total expenses                                 92,038         139,480
                                           --------------- ---------------
Net loss                                   $      (47,116) $      (86,957)
                                           =============== ===============
Net loss allocated to General Partner                None            None
                                           =============== ===============
Net loss allocated to Limited Partners     $      (47,116) $      (86,957)
                                           =============== ===============
Net loss per Limited Partnership
  Interest (82,697 issued and outstanding)
  - Basic and Diluted                      $        (0.57) $        (1.05)
                                           =============== ===============
Distribution to Limited Partners                     None  $      576,398
                                           =============== ===============
Distribution per Limited Partnership
  Interests (82,697 issued and
  outstanding)                                       None  $         6.97
                                           =============== ===============

The accompanying notes are an integral part of the financial statements.

                     BALCOR REALTY INVESTORS 85 - SERIES I
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                       STATEMENTS OF INCOME AND EXPENSES
                 for the quarters ended June 30, 1999 and 1998
                                  (Unaudited)

                                                1999            1998
                                           --------------- ---------------
Income:
  Interest on short-term investments       $       22,102  $       24,745
                                           --------------- ---------------
    Total income                                   22,102          24,745
                                           --------------- ---------------
Expenses:
  Administrative                                   43,678          51,628
                                           --------------- ---------------
    Total expenses                                 43,678          51,628
                                           --------------- ---------------
Net loss                                   $      (21,576) $      (26,883)
                                           =============== ===============
Net loss allocated to General Partner                None            None
                                           =============== ===============
Net loss allocated to Limited Partners     $      (21,576) $      (26,883)
                                           =============== ===============
Net loss per Limited Partnership
  Interest (82,697 issued and outstanding)
  - Basic and Diluted                      $        (0.26) $        (0.32)
                                           =============== ===============

The accompanying notes are an integral part of the financial statements.

                     BALCOR REALTY INVESTORS 85 - SERIES I
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                           STATEMENTS OF CASH FLOWS
                for the six months ended June 30, 1999 and 1998
                                  (Unaudited)

                                                 1999            1998
                                           --------------- ---------------
Operating activities:
  Net loss                                 $      (47,116) $      (86,957)
  Adjustments to reconcile net loss to
    net cash used in operating activities:
    Net change in:
      Accounts and accrued interest
        receivable                                 (3,488)         17,284
      Accounts payable                              8,132           5,524
      Due to affiliates                               327          10,468
                                           --------------- ---------------
  Net cash used in operating activities           (42,145)        (53,681)
                                           --------------- ---------------
Financing activity:
  Distribution to Limited Partners                               (576,398)
                                                           ---------------
  Cash used in financing activity                                (576,398)
                                                           ---------------
Net change in cash and cash equivalents           (42,145)       (630,079)
Cash and cash equivalents at
  beginning of period                           1,854,844       2,508,464
                                           --------------- ---------------
Cash and cash equivalents at end of period $    1,812,699  $    1,878,385
                                           =============== ===============

The accompanying notes are an integral part of the financial statements.

                      BALCOR REALTY INVESTORS 85-SERIES I
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                         NOTES TO FINANCIAL STATEMENTS

1. Accounting Policy:

In the opinion of management, all adjustments necessary for a fair presentation
have been made to the accompanying statements for the six months and quarter
ended June 30, 1999, and all such adjustments are of a normal and recurring
nature.

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 September
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 4 of
Notes to the 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 the conclusion of these contingencies.

3. Transactions with Affiliates:

Fees and expenses paid and payable by the Partnership to affiliates during the
six months and quarter ended June 30, 1999 are:


                                           Paid
                                   -------------------------
                                     Six Months     Quarter    Payable
                                    ------------   ---------  ---------

   Reimbursement of expenses to
     the General Partner, at cost   $ 19,978       $ 9,334    $ 22,813


4. Contingencies:

(a) 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.

(b) In May 1999, a lawsuit was filed against the Partnership, Madison
Partnership Liquidity Investors XX, et. al vs. The Balcor Company, et al.
whereby the Partnership and certain affiliates have been named as defendants.
The plaintiffs are entities that initiated tender offers to purchase and, in
fact, purchased units in eleven affiliated partnerships.  The complaint alleges
breach of fiduciary duties and breach of contract under the partnership
agreement and seeks the winding up of the affairs of the Partnership, the
establishment of a liquidating trust, the appointment of an independent trustee
for the trust and the distribution of a portion of the cash reserves to limited
partners. The defendants intend to vigorously contest this action.  The
Partnership 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 Partnership.

                      BALCOR REALTY INVESTORS 85-SERIES I
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                     MANAGEMENT'S DISCUSSION AND ANALYSIS

Balcor Realty Investors 85 - Series I A Real Estate Limited Partnership (the
"Partnership") was formed in 1983 to invest in and operate income-producing
real property. The Partnership raised $82,697,000 through the sale of Limited
Partnership Interests and utilized these proceeds to acquire ten real property
investments and minority joint venture interests in three additional
properties. As of June 30, 1999, the Partnership has no properties in its
portfolio.

Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1998 for a more complete understanding of
the Partnership's financial position.

Operations
----------

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

The operations of the Partnership in 1999 and 1998 consisted primarily of
administrative expenses which were partially offset by interest income earned
on short-term investments. In addition, in the first quarter of 1998 the
Partnership paid its share of property operating expenses relating to the North
Hill Apartments, which was sold in 1997. Primarily as a result of lower
administrative expenses in 1999, the Partnership's net loss decreased during
the six months and quarter ended June 30, 1999 as compared to the same periods
in 1998. Further discussion of the Partnership's operations is summarized
below.

1999 Compared to 1998
---------------------

Unless otherwise noted, discussions of fluctuations between 1999 and 1998 refer
to the six months and quarters ended June 30, 1999 and 1998.

As a result of lower interest rates and higher cash balances in 1998 prior to a
distribution to Limited Partners in January 1998, interest income on short-term
investments decreased during 1999 when compared to 1998.

During the first quarter of 1998, the Partnership paid its share of property
operating expenses related to the North Hill Apartments, in which the
Partnership held a minority joint venture interest. This property was sold in
1997.

Primarily due to a decrease in accounting fees, administrative expenses
decreased during 1999 when compared to 1998.

Liquidity and Capital Resources
-------------------------------

The cash position of the Partnership decreased by approximately $42,000 as of
June 30, 1999 as compared to December 31, 1998 due to cash used in operating
activities for the payment of administrative expenses, which was partially
offset by interest income earned on short-term investments.

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 September
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 4 of
Notes to the 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 the conclusion of these contingencies.

Limited Partners have received cash distributions totaling $587.47 per $1,000
Interest as well as certain tax benefits. Of this amount, $98.79 represents Net
Cash Receipts and $488.68 represents Net Cash Proceeds. 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 all 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.

The Partnership's plan to determine the Year 2000 compliance status of its key
vendors involves soliciting information from these vendors through the use of
surveys, follow-up discussions and review of data where needed. The Partnership
has received the surveys from these vendors. 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,
these surveys and discussions with the key vendors performing services for the
Partnership indicate that the key vendors are substantially Year 2000 compliant
as of June 30, 1999. The Partnership will continue to monitor the Year 2000
compliance of its key vendors during the third quarter of 1999.  In addition,
the Partnership has developed a contingency plan in the event of non-compliance

by these key vendors in the Year 2000 which will be updated by September 30,
1999 based on the results of further surveys, discussions and testing of
systems, where applicable. 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.

                      BALCOR REALTY INVESTORS 85-SERIES I
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                          PART II - OTHER INFORMATION

Item 1. Legal Proceedings
-------------------------

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

With regard to the Dorothy Bruss litigation, the defendants filed two motions
on May 12, 1999. The first motion was a Motion to Change Venue from Essex
County, New Jersey to Union County, New Jersey, where the predecessor
complaint, the Lenore Klein case, had been filed. The second motion was a
Motion to Dismiss the complaint for failure to state a cause of action. On May
21, 1999, the plaintiffs filed a Motion for Class Certification. On July 16,
1999, the court denied the defendants' Motion to Change Venue. The defendants
anticipate filing an appeal from the court's ruling on this issue.

Madison Partnership Liquidity Investors XX, et al vs. The Balcor Company,
-------------------------------------------------------------------------
et al.
------

On May 7, 1999, a proposed class action complaint was filed and on May 13, 1999
was served on the defendants, Madison Partnership Liquidity Investors XX, et al
vs. The Balcor Company, et al (Circuit Court, Chancery Division, Cook County,
Illinois, Docket No. 99CH08972). The Partnership, twenty-one additional limited
partnerships which were sponsored by The Balcor Company (together with the
Partnership, the "Affiliated Partnerships"), The Balcor Company, other
affiliated entities and one individual are named defendants in this action.
Plaintiffs are entities that initiated tender offers to purchase units and, in
fact, purchased units in eleven of the Affiliated Partnerships. The complaint
alleges breach of fiduciary duties and breach of contract under the partnership
agreements for each of the Affiliated Partnerships. The complaint seeks the
winding up of the affairs of the Affiliated Partnerships, the establishment of
a liquidating trust for each of the Affiliated Partnerships until a resolution
of all contingencies occurs, the appointment of an independent trustee for each
such liquidating trust and the distribution of a portion of the cash reserves
to limited partners. The complaint also seeks compensatory damages, punitive
and exemplary damages, and costs and expenses in pursuing the litigation. On
July 14, 1999, the defendants filed a Motion to Dismiss the complaint. A
briefing schedule on this motion has not yet been set.

The defendants intend to vigorously contest this action. No class has been
certified as of this date. The Partnership 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 Partnership.

Item 6. Exhibits and Reports on Form 8-K
-----------------------------------------

(a) Exhibits:

(4) Subscription Agreement as set forth as Exhibit 4.1 to Amendment No. 1 to
Registrant's Registration Statement on Form S-11 dated November 29, 1984
(Registration No. 2-92777) and Form of Confirmation regarding Interests in the
Partnership as set forth as Exhibit 4.2 to the Partnership's Report on Form
10-Q for the quarter ended June 30, 1992 are incorporated herein by reference.

(27) Financial Data Schedule of the Partnership for the six months ended June
30, 1999 is attached hereto.

(b) Reports on Form 8-K: No Reports on Form 8-K were filed during the quarter
ended June 30, 1999.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                        BALCOR REALTY INVESTORS 85-SERIES I
                        A REAL ESTATE LIMITED PARTNERSHIP



                        By:   /s/Thomas E. Meador
                              --------------------------------
                              Thomas E. Meador
                              President and Chief Executive Officer (Principal
                              Executive Officer) of Balcor Partners-XVI, the
                              General Partner



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


Date: August 11, 1999
      ---------------