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 September 30, 2000
                               ------------------
                                      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.)

2333 Waukegan Road, Suite 100
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
                     September 30, 2000 and December 31, 1999
                                   (Unaudited)


                                      ASSETS

                                            2000                 1999
                                         -----------          -----------
Cash and cash equivalents                $1,755,247           $1,812,965
Accounts and accrued interest receivable      9,492                8,481
                                         -----------          -----------
                                         $1,764,739           $1,821,446
                                         ===========          ===========

                        LIABILITIES AND PARTNERS' CAPITAL

Accounts payable                         $   98,789           $   95,788
Due to affiliates                             7,155               32,816
                                         -----------          -----------
    Total liabilities                       105,944              128,604
                                         -----------          -----------
Commitments and contingencies

Limited Partners' capital (82,697
  Interests issued and outstanding)       1,964,824            1,998,871
General Partner's deficit                  (306,029)            (306,029)
                                         -----------          -----------
    Total partners' capital               1,658,795            1,692,842
                                         -----------          -----------
                                         $1,764,739           $1,821,446
                                         ===========          ===========

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 nine months ended September 30, 2000 and 1999
                                 (Unaudited)


                                                 2000            1999
                                              -----------     -----------
Income:
  Interest on short-term investments          $   80,831      $   68,583
                                              -----------     -----------
    Total income                                  80,831          68,583
                                              -----------     -----------
Expenses:
  Administrative                                 114,878         132,069
                                              -----------     -----------
    Total expenses                               114,878         132,069
                                              -----------     -----------
Net loss                                      $  (34,047)     $  (63,486)
                                              ===========     ===========
Net loss allocated to General Partner                None            None
                                              ===========     ===========
Net loss allocated to Limited Partners        $  (34,047)     $  (63,486)
                                              ===========     ===========
Net loss per Limited Partnership Interest
  (82,697 issued and oustanding) -
  Basic and Diluted                           $    (0.41)     $    (0.77)
                                              ===========     ===========

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 September 30, 2000 and 1999
                                 (Unaudited)


                                                   2000           1999
                                               -----------     -----------
Income:
  Interest on short-term investments           $   28,674      $   23,661
                                               -----------     -----------
    Total income                                   28,674          23,661
                                               -----------     -----------
Expenses:
  Administrative                                   30,648          40,031
                                               -----------     -----------
    Total expenses                                 30,648          40,031
                                               -----------     -----------
Net loss                                       $   (1,974)     $  (16,370)
                                               ===========     ===========
Net loss allocated to General Partner                 None            None
                                               ===========     ===========
Net loss allocated to Limited Partners         $   (1,974)     $  (16,370)
                                               ===========     ===========
Net loss per Limited Partnership Interest
  (82,697 issued and oustanding) -
  Basic and Diluted                            $    (0.02)     $    (0.20)
                                               ===========     ===========

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 nine months ended September 30, 2000 and 1999
                                 (Unaudited)


                                                   2000            1999
                                                -----------    -----------
Operating activities:
  Net loss                                      $  (34,047)    $  (63,486)
  Adjustments to reconcile net loss to net
    cash used in operating activities:
      Net change in:
        Accounts and accrued interest
          receivable                                (1,011)        (2,293)
        Accounts payable                             3,001         17,923
        Due to affiliates                          (25,661)         3,558
                                                -----------    -----------
  Net cash used in operating activities            (57,718)       (44,298)
                                                -----------    -----------
Net change in cash and cash equivalents            (57,718)       (44,298)

Cash and cash equivalents at beginning
  of year                                        1,812,965      1,854,844
                                                -----------    -----------
Cash and cash equivalents at end of period      $1,755,247     $1,810,546
                                                ===========    ===========

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 nine months and  quarter
ended September  30,  2000,  and all  such  adjustments  are of  a  normal  and
recurring nature.

2. Partnership Termination:

As previously reported, class  action litigation involving the Partnership  was
originally filed in  February 1996. This litigation  has existed over the  past
four and 1/2 years in three separate but related cases and continues to  exist
today. Since inception of this litigation, the general partner has stated  that
the Partnership would not be dissolved until the conclusion of this  litigation
and that the general partner has  a contingent right to seek recovery from  the
Partnership of the legal fees it expends in defending against this  litigation.
The general partner believed that this litigation would have been completed and
resolved before now.  Despite the fact that  the general partner has  prevailed
twice on motions  to dismiss  the litigation for  failure to  state a cause  of
action, the  plaintiffs have  continued to  re-file the  litigation and  assert
claims and, in  so doing,  have protracted the  litigation. There is  presently
pending the general partner's and remaining defendants' third motion to dismiss
the litigation for failure to state a cause of action, on which the court heard
argument in April 2000. Defendants believe this motion to be meritorious. Given
the actions of plaintiffs' counsel to  date, at this point in time the  general
partner does not  believe that  the litigation will  be concluded  in the  near
future. As a result, the general partner has decided that it will  dissolve the
Partnership in December 2000 and distribute all remaining cash reserves to  the
limited partners.

The Partnership has accrued on its financial statements the legal fees expended
to date  by  the general  partner  in defending  against this  litigation.  The
general partner would be entitled to  place such amounts, along with an  amount
representing anticipated future legal fees, in a trust account to be held until
the conclusion of this litigation. Because the general partner believes such an
action would  not be  in the  best interests of  the limited  partners, it  has
decided not to do so and will distribute to limited partners such amounts

accrued for legal fees. The general partner does not in any way waive its claim
for indemnification  under  the  partnership agreement;  however,  the  general
partner will  not  seek  to  recover  from the  limited  partners  any  amounts
distributed  to   them  in  attempting   to  satisfy   the  general   partner's
indemnification rights.

3. Transactions with Affiliates:

Fees and expenses  paid and payable  by the Partnership  to affiliates for  the
nine months and quarter ended September 30, 2000 are:

                                              Paid
                                   -------------------------
                                     Nine Months    Quarter    Payable
                                    ------------   --------- ----------

   Reimbursement of expenses to
     the General Partner, at cost   $ 48,530       $ 7,643    $ 7,155

                      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. The Partnership sold its final real estate investment in  September
1997.

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 1999 for  a more complete understanding  of
the Partnership's financial position.

Operations
----------

2000 Compared to 1999
---------------------

The operations of the Partnership in 2000 and 1999 consisted of  administrative
expenses which were  partially offset by  interest income earned on  short-term
investments.

As a result  of higher interest  rates in 2000,  interest income on  short-term
investments increased during  the nine months  and quarter ended September  30,
2000 as compared to the same periods in 1999.

Primarily due  to  lower  accounting  and accrued  legal  fees,  administrative
expenses decreased during the nine months and quarter ended September 30,  2000
as compared to the same periods in 1999.

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

The cash position of the  Partnership decreased by approximately $58,000 as  of
September 30,  2000  as compared  to December  31,  1999 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.

As previously reported, class  action litigation involving the Partnership  was
originally filed in  February 1996. This litigation  has existed over the  past
four and 1/2 years in three separate but related cases and continues to  exist
today. Since inception of this litigation, the general partner has stated  that
the Partnership would not be dissolved until the conclusion of this  litigation
and that the general partner has  a contingent right to seek recovery from  the
Partnership of the legal fees it expends in defending against this  litigation.
The general partner believed that this litigation would have been completed and
resolved before now.  Despite the fact that  the general partner has  prevailed
twice on motions  to dismiss  the litigation for  failure to  state a cause  of
action, the  plaintiffs have  continued to  re-file the  litigation and  assert
claims and, in  so doing,  have protracted the  litigation. There is  presently
pending the general partner's and remaining defendants' third motion to dismiss
the litigation for failure to state a cause of action, on which the court heard
argument in April 2000. Defendants believe this motion to be meritorious. Given
the actions of plaintiffs' counsel to  date, at this point in time the  general
partner does not  believe that  the litigation will  be concluded  in the  near
future. As a result, the general partner has decided that it will  dissolve the
Partnership in December 2000 and distribute all remaining cash reserves to  the
limited partners.

The Partnership has accrued on its financial statements the legal fees expended
to date  by  the general  partner  in defending  against this  litigation.  The
general partner would be entitled to  place such amounts, along with an  amount
representing anticipated future legal fees, in a trust account to be held until
the conclusion of this litigation. Because the general partner believes such an
action would  not be  in the  best interests of  the limited  partners, it  has
decided not  to do  so and  will distribute  to limited  partners such  amounts
accrued for legal fees. The general partner does not in any way waive its claim
for indemnification  under  the  partnership agreement;  however,  the  general
partner will  not  seek  to  recover  from the  limited  partners  any  amounts
distributed  to   them  in  attempting   to  satisfy   the  general   partner's
indemnification rights.

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.

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

                          PART II - OTHER INFORMATION

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  nine months  ended
September 30, 2000 is attached hereto.

(b) Reports on Form 8-K: No  Reports on Form 8-K were filed during the  quarter
ended September 30, 2000.

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: November 13, 2000
      -----------------