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 March 31, 1997
                               ------------------
                                   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     
    -----     -----
<PAGE>
                     BALCOR REALTY INVESTORS 85 - SERIES I
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                                BALANCE SHEETS
                     March 31, 1997 and December 31, 1996
                                  (Unaudited)

                                    ASSETS

                                                1997            1996
                                           --------------- ---------------
Cash and cash equivalents                  $   13,356,615  $   16,372,728
Accounts and accrued interest receivable          168,682         168,416
Prepaid expenses                                    3,505          29,911
                                           --------------- ---------------
                                               13,528,802      16,571,055
                                           --------------- ---------------
Investment in real estate:
  Land                                                          1,958,223
  Buildings and improvements                                   15,033,831
                                                           ---------------
                                                               16,992,054
  Less accumulated depreciation                                 6,849,503
                                                           ---------------
Investment in real estate, net of
  accumulated depreciation                                     10,142,551
                                           --------------- ---------------
                                           $   13,528,802  $   26,713,606
                                           =============== ===============

                  LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

Accounts payable                           $      276,909  $      120,413
Due to affiliates                                 129,528         130,331
Accrued liabilities, principally
  real estate taxes                                                91,810
Security deposits                                                  62,326
Losses in excess of investments in joint
  ventures with affiliates                        531,283         499,671
Mortgage notes payable                                         11,495,334
                                           --------------- ---------------
     Total liabilities                            937,720      12,399,885
                                           --------------- ---------------
Commitments and contingencies

Limited Partners' capital (82,697
  Interests issued and outstanding)            12,895,082      14,675,847
General Partner's deficit                        (304,000)       (362,126)
                                           --------------- ---------------
     Total partners' capital                   12,591,082      14,313,721
                                           --------------- ---------------
                                           $   13,528,802  $   26,713,606
                                           =============== ===============

The accompanying notes are an integral part of the financial statements.
<PAGE>
                     BALCOR REALTY INVESTORS 85 - SERIES I
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                       STATEMENTS OF INCOME AND EXPENSES
                for the quarters ended March 31, 1997 and 1996
                                  (Unaudited)

                                                1997            1996
                                           --------------- ---------------
Income:
  Rental and service                       $      443,934  $    3,948,816
  Interest on short-term investments              124,005          35,087
  Participation in (loss) income of joint
    ventures with affiliates                         (527)        145,326
                                           --------------- ---------------
    Total income                                  567,412       4,129,229
                                           --------------- ---------------

Expenses:
  Interest on mortgage notes payable               99,717       1,112,417
  Lender participation                          1,025,000
  Depreciation                                     62,779         480,025
  Amortization of deferred expenses                                42,084
  Property operating                              263,437       1,314,078
  Real estate taxes                                12,325         233,228
  Property management fees                         17,151         198,365
  Administrative                                   98,760         124,663
                                           --------------- ---------------
    Total expenses                              1,579,169       3,504,860
                                           --------------- ---------------
(Loss) income before gain on sale of 
  property and extraordinary item              (1,011,757)        624,369

Gain on sale of property                       12,768,729       4,627,131
                                           --------------- ---------------
Income before extraordinary item               11,756,972       5,251,500

Extraordinary item:
  Debt extinguishment expense                                    (251,004)
                                           --------------- ---------------
Net income                                 $   11,756,972  $    5,000,496
                                           =============== ===============
Income before extraordinary item
  allocated to General Partner             $       58,126  $       52,515
                                           =============== ===============
Income before extraordinary item
  allocated to Limited Partners            $   11,698,846  $    5,198,985
                                           =============== ===============
Income before extraordinary item
  per Limited Partnership Interest
  (82,697 issued and outstanding)          $       141.47  $        62.87
                                           =============== ===============

The accompanying notes are an integral part of the financial statements.
<PAGE>
                     BALCOR REALTY INVESTORS 85 - SERIES I
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                       STATEMENTS OF INCOME AND EXPENSES
                for the quarters ended March 31, 1997 and 1996
                                  (Unaudited)
                                  (Continued)

                                                1997            1996
                                           --------------- ---------------
Extraordinary item allocated to
  General Partner                                    None  $       (2,510)
                                           =============== ===============
Extraordinary item allocated to
  Limited Partners                                   None  $     (248,494)
                                           =============== ===============
Extraordinary item per Limited
  Partnership Interest (82,697
  issued and outstanding)                            None  $        (3.00)
                                           =============== ===============
Net income allocated to General Partner    $       58,126  $       50,005
                                           =============== ===============
Net income allocated to Limited Partners   $   11,698,846  $    4,950,491
                                           =============== ===============
Net income per Limited Partnership 
  Interest (82,697 issued and outstanding) $       141.47  $        59.87
                                           =============== ===============
Distribution to Limited Partners           $   13,479,611  $      620,228
                                           =============== ===============
Distribution per Limited Partnership 
  Interests (82,697 issued and 
  outstanding)                             $       163.00  $         7.50
                                           =============== ===============

The accompanying notes are an integral part of the financial statements.
<PAGE>
                     BALCOR REALTY INVESTORS 85 - SERIES I
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                              STATEMENTS OF CASH FLOWS
                for the quarters ended March 31, 1997 and 1996
                                  (Unaudited)

                                                1997            1996
                                           --------------- ---------------
Operating activities:
  Net income                               $   11,756,972  $    5,000,496
  Adjustments to reconcile net income to 
    net cash (used in) or provided by 
    operating activities:
    Gain on forgiveness of debt
    Gain on sale of property                  (12,768,729)     (4,627,131)
    Debt extinguishment expense                                     7,292
    Participation in loss (income) of 
      joint ventures with affiliates                  527        (145,326)
    Depreciation of properties                     62,779         480,025
    Amortization of deferred expenses                              42,084
    Net change in:
      Accounts and accrued interest
        receivable                                   (266)       (105,286)
      Escrow deposits                                             (99,778)
      Prepaid expenses                             26,406         122,402
      Accounts payable                            156,496         (95,703)
      Due to affiliates                              (803)         18,001
      Accrued liabilities                         (91,810)        (79,127)
      Security deposits                           (62,326)        (33,198)
                                           --------------- ---------------
  Net cash (used in) or provided by 
    operating activities                         (920,754)        484,751
                                           --------------- ---------------
Investing activities:
  Capital contributions to joint ventures
    with affiliates                                               (14,533)
  Distribution from joint ventures 
    with affiliates                                31,085         112,458
  Proceeds from sale of real estate            23,300,000       9,985,000
  Payment of selling costs                       (451,499)       (240,515)
                                           --------------- ---------------
  Net cash provided by investing
    activities                                 22,879,586       9,842,410
                                           --------------- ---------------

The accompanying notes are an integral part of the financial statements.
<PAGE>
                     BALCOR REALTY INVESTORS 85 - SERIES I
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                              STATEMENTS OF CASH FLOWS
                for the quarters ended March 31, 1997 and 1996
                                  (Unaudited)
                                  (Continued)

                                                1997            1996
                                           --------------- ---------------
Financing activities:
  Distribution to Limited Partners            (13,479,611)       (620,228)
  Repayment of mortgage note payable          (11,458,759)     (5,790,869)
  Principal payments on mortgage
    notes payable                                 (36,575)       (799,958)
  Disbursements from improvement escrows                          136,699
                                           --------------- ---------------
  Net cash used in financing activities       (24,974,945)     (7,074,356)
                                           --------------- ---------------

Net change in cash and cash equivalents        (3,016,113)      3,252,805
Cash and cash equivalents at 
  beginning of period                          16,372,728       2,369,231
                                           --------------- ---------------
Cash and cash equivalents at end of period $   13,356,615  $    5,622,036
                                           =============== ===============

The accompanying notes are an integral part of the financial statements.
<PAGE>
                        BALCOR REALTY INVESTORS 85-SERIES I
                         A REAL ESTATE LIMITED PARTNERSHIP
                         (An Illinois Limited Partnership)

                           NOTES TO FINANCIAL STATEMENTS


1. Accounting Policies:

(a) A reclassification has been made to the previously reported 1996 statements
in order to provide comparability with the 1997 statements. This 
reclassification has not changed the 1996 results. In the opinion of 
management, all adjustments necessary for a fair presentation have been made
to the accompanying statements for the quarter ended March 31, 1997, and all
such adjustments are of a normal and recurring nature.

(b) For financial statement purposes, in previous years partners were allocated
income and loss in accordance with the profit and loss percentages in the
Partnership Agreement. In order for the capital accounts of the General Partner
and Limited Partners to appropriately reflect their respective remaining
economic interests as provided for in the Partnership Agreement, the General
Partner was allocated less income in 1997 for financial statement purposes. 

2. Partnership Termination:

The Partnership Agreement provides for the dissolution of the Partnership upon
the occurrence of certain events, including the disposition of all interests in
real estate. During 1996, the Partnership sold six properties and its minority
joint venture interest in one additional property. During February 1997, the
Partnership sold the Templeton Park Apartments. Currently, the General Partner
is actively marketing for sale its remaining investment, the North Hill
Apartments, in which the Partnership holds a minority joint venture interest.
The Partnership has retained a portion of the cash 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 stemming from
litigation involving the Partnership including, but not limited to, the
lawsuits discussed in Note 6 of Notes to the Financial Statements. In the
absence of any such contingency, the reserves will be paid within twelve months
of the last property being sold. In the event a contingency exists, reserves
may be held by the Partnership for a longer period of time.

3.  Interest Expense:

During the quarters ended March 31, 1997 and 1996, the Partnership incurred and
paid interest expense on mortgage notes payable of $99,717 and $1,112,417,
respectively. 

4.  Transactions with Affiliates:

Fees and expenses paid and payable by the Partnership to affiliates during the
quarter ended March 31, 1997 are:
<PAGE>
                                          Paid       Payable
                                      ------------  ---------         

      Reimbursement of expenses to
        the General Partner, at cost      $13,294    $129,528    

            
5.  Property Sales:

In February 1997, the Partnership sold the Templeton Park Apartments in an all
cash sale for $23,300,000. From the proceeds of the sale, the Partnership paid
$11,458,759 to the third party mortgage holder in full satisfaction of the
first mortgage loan, paid $451,499 in selling costs and $1,025,000 in lender
participation calculated as a percentage of proceeds in excess of the
outstanding mortgage debt. Lender participation represents additional interest
paid to the lender calculated as a percentage of the sales price in excess of
amounts specified in the loan agreement. The basis of the property was
$10,079,772, which is net of accumulated depreciation of $6,912,282. For
financial statement purposes, the Partnership recognized a gain of $12,768,729
from the sale of this property.

6. Contingencies: 

The Partnership is currently involved in two lawsuits whereby the Partnership
and certain affiliates have been named as defendants alleging substantially
similar claims involving certain federal securities law violations with regard
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 and,
no determinations of the merits have been made. It is not determinable at this
time whether or not an unfavorable decision in either action would have a
material adverse impact on the financial position, operations and liquidity of
the Partnership. The Partnership believes it has meritorious defenses to
contest the claims.

7.  Subsequent Event:

In April 1997, the Partnership made a distribution of $10,419,822 ($126.00 per
Interest) to the holders of Limited Partnership Interests representing a
special distribution of Net Cash Proceeds primarily from the net proceeds
received in connection with the sale of the Templeton Park Apartments.
<PAGE>
                      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 March 31, 1997, the Partnership has disposed of nine of these
properties and two of the properties in which it held a minority joint venture.
During February 1997, the Partnership sold the Templeton Park Apartments and
continues to own a minority joint venture interest in the North Hill
Apartments. Currently, the North Hill Apartments is being marketed for sale.

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 1996 for a more complete understanding of
the Partnership's financial position.

Operations
----------

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

During February 1997, the Partnership sold the Templeton Park Apartments and
recognized a significant gain on the sale. This was the primary reason for the
increase in net income during the quarter ended March 31, 1997 as compared to
the same period in 1996. This increase in net income was partially offset by a
decrease in income generated from property operations resulting from the sale
of the properties in 1996 and 1997. Further discussion of the Partnership's
operations are summarized below.

1997 Compared to 1996
---------------------
 
Discussions of fluctuations between 1997 and 1996 refer to the quarters ended
March 31, 1997 and 1996.

The Partnership sold six properties during 1996, which were generating income
prior to their sales. The Partnership sold the Templeton Park Apartments in
February 1997 and recognized a gain in connection with the sale for financial
statement purposes of $12,768,729.  These sales 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.
<PAGE>
Higher average cash balances were available for investment due to proceeds
received in connection with the 1996 and 1997 property sales prior to
distribution to Limited Partners in January and April 1997. As a result,
interest income on short-term investments increased during 1997 as compared to
1996. This amount has been recorded as lender participation.

Seabrook Apartments, in which the Partnership held a minority joint venture
interest, was sold during February 1996. While the Partnership recognized
participation in income during 1996 in connection with the gain on the sale of
the Seabrook Apartments, the Partnership recognized participation in loss from
joint ventures with affiliates from the North Hill Apartments during 1997.

The Partnership paid to the holder of the first mortgage loan a percentage of
the net sale proceeds equal to $1,025,000 in connection with the sale of the
Templeton Park Apartments during 1997.

Lower portfolio management fees during 1997 and printing and postage costs
incurred during 1996 in connection with tender offers during  quarter of 1996
were the primary reasons for the decrease in administrative expenses during
1997 as compared to 1996.

During 1996, the Partnership wrote off the remaining unamortized deferred
expenses of $7,292 and paid a prepayment penalty of $243,712 in connection with
the March 1996 sale of the Willowbend Apartments. These amounts were recognized
as debt extinguishment expense and classified as an extraordinary item for
financial statement purposes.

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

The cash position of the Partnership decreased by approximately $3,016,000 as
of March 31, 1997 as compared to December 31, 1996, primarily due to the
special distribution made in January 1997 to Limited Partners from the 1996
property sales which was partially offset by the net proceeds received from the
sale of the Templeton Park Apartments in February 1997. The Partnership used
cash in operating activities of approximately $921,000. Cash was used to pay   
administrative expenses and lender participation which was offset by cash flow
from the operation of the Partnership's property and interest income earned on
short-term investments. The Partnership's net cash provided by investing
activities of approximately $22,880,000, consisted primarily of the net
proceeds received from the sale of the Templeton Park Apartments. Cash was 
used in the Partnership's financing activities for the repayment of the 
mortgage note in connection with the sale of the Templeton Park Apartments 
of approximately $11,459,000, principal payments on the mortgage note of 
approximately $36,000 and distributions to Limited Partners of approximately
$13,480,000. In addition, in April 1997 the Partnership made a special 
distribution of $10,419,822 to Limited Partners primarily from the net 
proceeds received in connection with the sale of the Templeton Park Apartments.
       
During 1996, the Partnership sold six properties and its minority joint venture
in one additional property. During February 1997, Partnership sold the
Templeton Park Apartments. The General Partner is actively marketing for sale
the Partnership's remaining property, the North Hill Apartments, in which the
<PAGE>
Partnership holds a minority joint venture interest. 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 exists or may
arise. The Partnership has retained a portion of the cash from property sales
to satisfy obligations of the Partnership as well as establish a reserve for
contingencies. Such contingencies may include legal and other fees stemming
from litigation involving the Partnership including, but not limited to, the
lawsuits discussed in Note 6 of Notes to Financial Statements. In the
absence of any such contingency, the reserves will be paid within twelve months
of the last property sale. In the event a contingency arises, reserves may be
held by the Partnership for a longer period of time.

In February 1997, the Partnership sold the Templeton Park Apartments in an all
cash sale for $23,300,000. From the proceeds of the sale, the Partnership paid
$11,458,759 to the third party mortgage holder in full satisfaction of the
first mortgage loan, paid $451,499 in selling costs and paid $1,025,000 to the
lender as a percentage of proceeds in excess of the outstanding mortgage debt.
The remaining available proceeds were distributed to Limited Partners in April
1997. See Note 5 of Notes to Financial Statements for additional information.

Pursuant to the sale agreement for the Forestwood Apartments, $250,000 of the
sale proceeds was retained by the Partnership and was unavailable for
distribution until February 1997, at which time the funds were released in 
full.

In April 1997, the Partnership made a distribution of $10,419,822 ($126.00 per
Interest) to the holders of Limited Partnership Interests representing a
special distribution of Net Cash Proceeds primarily from the net proceeds
received in connection with the sale of the Templeton Park Apartments.
Including the April 1997 distribution, Limited Partners have received
cumulative cash distributions of $562.50 per $1,000 Interest as well as certain
tax benefits. Of this amount, $92.50 has been from Net Cash Receipts and
$470.00 has been from Net Cash Proceeds. Future distribution will be made from
proceeds received from the sale of the Partnership's interest in the remaining
property, as to which there can be no assurances. Investors will not recover
all of their original investment. 

Inflation has several types of potentially conflicting impacts on real estate
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents and/or sales prices
depending on general or local economic conditions. In the long-term, inflation
can be expected to increase operating costs and replacement costs and may lead
to increased rental revenues and real estate values.
<PAGE>
                      BALCOR REALTY INVESTORS 85-SERIES I
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                          PART II - OTHER INFORMATION

Item 5. Other Information
-------------------------

North Hill Apartments
---------------------

As previously reported, on February 21, 1997, a joint venture consisting of the
Partnership and an affiliate (the "Joint Venture") contracted to sell the North
Hill Apartments, DeKalb County, Georgia, to an unaffiliated party, EEA
Development, Inc., a Delaware corporation, for a sale price of $22,750,000. On
March 27, 1997, the purchaser exercised its option to terminate the agreement
of sale. On April 1, 1997, the agreement was reinstated by the Joint Venture
and the purchaser.  On April 4, 1997, the purchaser again exercised its option
to terminate the agreement. Pursuant to the agreement, the earnest money
previously deposited by the purchaser and interest accrued thereon has been
returned to the purchaser.

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

(a) Exhibits:

(4) The 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, 1995 are incorporated herein by reference.

(10) Material Contracts:

(a)(i) Agreement of Sale and attachments thereto relating to the sale of
Forestwood Apartments, East Baton Rouge Parish, Louisiana, previously filed as
Exhibit (2) to the Partnership's Current Report on Form 8-K dated October 14,
1996, is incorporated herein by reference.

(ii) First Amendment to Agreement of Sale and Escrow Agreement relating to the
sale of Forestwood Apartments, East Baton Rouge, Louisiana previously filed as
Exhibit (10)(a)(ii) to the Partnership's Report on Form 10-Q for the quarter
ended September 30, 1996, is incorporated herein by reference.

(iii) Second Amendment to Agreement of Sale relating to the sale of Forestwood 
Apartments, East Baton Rouge, Louisiana previously filed as Exhibit
(10)(a)(iii) to the Partnership's Report on Form 10-Q for the quarter ended
September 30, 1996, is incorporated herein by reference.
<PAGE>
(b)(i) Agreement of Sale and attachments thereto relating to Forest Ridge
Apartments, Phase I, Arlington, Texas previously filed as Exhibit (2) to the
Partnership's Current Report on Form 8-K dated April 23, 1996 is incorporated
herein by reference.

(ii) Master Amendment and Agreement dated May 22, 1996 relating to the sale of
Forest Ridge Apartments, Phase I, Dallas, Texas previously filed as Exhibit
(99)(a) to the Partnership's Current Report on Form 8-K dated June 28, 1996 is
incorporated herein by reference.

(iii) Master Amendment and Agreement #2 dated May 22, 1996 relating to the sale
of Forest Ridge Apartments, Phase I, Dallas, Texas previously filed as Exhibit
(99)(b) to the Partnership's Current Report on Form 8-K dated June 28, 1996 is
incorporated herein by reference.

(c)(i) Agreement of Sale and attachment thereto relating to the sale of Boulder
Springs Apartments, Chesterfield County, Virginia, previously filed as Exhibit
(2)(a)(i) to the Partnership's Current Report on Form 8-K dated August 8, 1996,
is incorporated herein by reference.

(ii) Letter dated August 19, 1996 relating to the sale of Boulder Springs
Apartments, Chesterfield County, Virginia, previously filed as Exhibit
(2)(a)(ii) to the Partnership's Current Report on Form 8-K dated August 8,
1996, is incorporated herein by reference.

(iii) Amendment to Agreement of Sale relating to the sale of Boulder Springs
Apartments, Chesterfield County, Virginia, previously filed as Exhibit
(99)(b)(i) to the Partnership's Current Report on Form 8-K dated October 14,
1996, is incorporated herein by reference.

(iv) Second Amendment of Agreement of Sale relating to the sale of Boulder
Springs Apartments, Chesterfield County, Virginia, previously filed as Exhibit
(99)(b)(ii) to the Partnership's Current Report on Form 8-K dated October 14,
1996, is incorporated herein by reference.

(d)(i) Agreement of Sale and attachment thereto relating to the sale of
Timberlake Apartments, Phase I, Altamonte Springs, Florida, previously filed as
Exhibit (2)(b) to the Partnership's Current Report on Form 8-K dated August 8,
1996, is incorporated herein by reference.

(ii) Letter Agreement relating to the sale of Timberlake Apartments, Phase I,
Altamonte Springs, Florida, previously filed as Exhibit (99)(c) to the
Partnership's Current Report on Form 8-K dated October 14, 1996, is
incorporated herein by reference.

(e)(i) Agreement of Sale and Attachments thereto relating to the sale of
Templeton Park Apartments, Colorado Springs, Colorado, previously filed as
Exhibit (2) to the Partnership's Current Report on Form 8-K dated August 26,
1996, is incorporated herein by reference.

(ii) Letter agreements relating to the sale of the Templeton Park Apartments,
Colorado Springs, Colorado, previously filed as Exhibit (99)(a) to the
Partnership's Current Report on Form 8-K dated October 14, 1996, is
incorporated herein by reference.
<PAGE>
(iii) Letter agreement and Notice of Disapproval dated October 25, 1996,
regarding the sale of Templeton Park Apartments, Colorado Springs, Colorado
previously filed as Exhibit (10)(e)(iii) to the Partnership's Report on Form
10-Q for the quarter ended September 30, 1996, is incorporated herein by
reference.

(iv) First Amendment to Agreement of Sale and Escrow Agreement relating to the
sale of Templeton Park Apartments, Colorado Springs, Colorado previously filed
as Exhibit (10)(e)(iv) to the Partnership's Report on Form 10-Q for the quarter
ended September 30, 1996, is incorporated herein by reference.

(v)  Letter Agreements dated November 21, 1996, December 6, 1996, December 11,
1996, December 13, 1996, December 20, 1996, and January 20, 1997, relating to
the sale of the Templeton Park Apartments, Colorado Springs, Colorado, 
previously filed as Exhibit (99)(i) to the Partnership's Current Report on Form
8-K dated February 21, 1997 is incorporated herein by reference.

(vi) Second Amendment to Agreement of Sale and Escrow Agreement dated January
3, 1997, relating to the sale of the Templeton Park Apartments, Colorado
Springs, Colorado, previously filed as Exhibit (99)(ii) to the Partnership's
Current Report on Form 8-K dated February 21, 1997 is incorporated herein by
reference.

(f)(i) Agreement of Sale and attachment thereto relating to the sale of North
Hill Apartments, Atlanta, Georgia, previously filed as Exhibit (2)(a)(i) to the
Partnership's Current Report on Form 8-K dated February 21, 1997, is
incorporated herein by reference.

(ii) Termination Notice relating to the sale of North Hill Apartments, Atlanta,
Georgia, previously filed as Exhibit (2)(a)(ii) to the Partnership's Current
Report on Form 8-K dated February 21, 1997, is incorporated herein by
reference.

(iii) Reinstatement of, and First Amendment to the Agreement of Sale and Escrow
Agreement relating to the sale of North Hill Apartments, Atlanta, Georgia,
previously filed as Exhibit (2)(a)(iii) to the Partnership's Current Report on
Form 8-K dated February 21, 1997, is incorporated herein by reference.

(iv) Second Amendment to Agreement of Sale and Escrow Agreement relating to the
sale of North Hill Apartments, Atlanta, Georgia, is attached hereto.

(v) Termination notice relating to the sale of North Hill Apartments, Atlanta,
Georgia, is attached hereto.

(vi) Reinstatement and Third Amendment to Agreement of Sale and Escrow
Agreement relating to the sale of North Hill Apartments, Atlanta, Georgia, is
attached hereto.

(27) Financial Data Schedule of the Partnership for the three months ended  
March 31, 1997 is attached hereto.

(b) Reports on Form 8-K:

(i) A Current Report on Form 8-K dated March 7, 1997, was filed reporting the
termination and reinstatement of the agreement of sale for the North Hill
Apartments, DeKalb County, Georgia.
<PAGE>
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                           
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                              Jayne A. Kosik
                              Managing Director and Chief Financial Officer 
                              (Principal Accounting Officer) of Balcor 
                              Partners-XVI, the General Partner

Date: May 14, 1997              
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