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, 1996
                               ------------------
                                      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 0-11699
                       -------

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

          Illinois                                      36-3202727    
-------------------------------                     -------------------
(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 PENSION INVESTORS - IV
                       (AN ILLINOIS LIMITED PARTNERSHIP)

                                BALANCE SHEETS
                   September 30, 1996 and December 31, 1995
                                  (UNAUDITED)

                                    ASSETS

                                                 1996             1995
                                          ---------------  ---------------
Cash and cash equivalents                 $   11,305,192   $    4,220,385
Cash and cash equivalents - Early
  Investment Incentive Fund                        5,207          148,230
Escrow deposits                                  958,452          838,807
Accounts and accrued interest receivable          43,606          230,107
Prepaid expenses                                 248,369          144,818
Deferred expenses, net of accumulated
  amortization of $75,483 in 1996 and            107,210          124,107
  $58,586 in 1995                         ---------------  ---------------
                                              12,668,036        5,706,454
                                          ---------------  ---------------
Investment in loan receivable - first 
  mortgage                                                      1,657,786
 
Real estate held for sale (net of allowance
  of $5,209,805 in 1996 and $2,621,805
  in 1995)                                    32,849,142       40,692,114

Investment in joint venture with affiliates    4,306,488        4,223,275
                                          ---------------  ---------------
                                              37,155,630       46,573,175
                                          ---------------  ---------------
                                          $   49,823,666   $   52,279,629
                                          ===============  ===============

                       LIABILITIES AND PARTNERS' CAPITAL

Accounts and accrued real estate taxes
  payable                                 $      769,036   $      535,761
Due to affiliates                                101,029           44,376
Other liabilities (principally security
  deposits)                                      281,100          288,363
Mortgage notes payable                        10,088,123       10,419,008
                                          ---------------  ---------------
    Total liabilities                         11,239,288       11,287,508
                                          ---------------  ---------------
Limited Partners' capital (429,606 
  Interests issued and outstanding)           51,221,269       53,167,282
<PAGE>
                         BALCOR PENSION INVESTORS - IV
                       (AN ILLINOIS LIMITED PARTNERSHIP)

                                BALANCE SHEETS
                   September 30, 1996 and December 31, 1995
                                  (UNAUDITED)
                                  (Continued)

Less Interests held by Early Investment
  Incentive Fund (37,584 in 1996 and
  34,915 in 1995)                             (8,905,577)      (8,613,130)
                                          ---------------  ---------------
                                              42,315,692       44,554,152
General Partner's deficit                     (3,731,314)      (3,562,031)
                                          ---------------  ---------------
    Total partners' capital                   38,584,378       40,992,121
                                          ---------------  ---------------
                                          $   49,823,666   $   52,279,629
                                          ===============  ===============

The accompanying notes are an integral part of the financial statements.
<PAGE>
                         BALCOR PENSION INVESTORS - IV
                       (AN ILLINOIS LIMITED PARTNERSHIP)

                       STATEMENTS OF INCOME AND EXPENSES
             for the nine months ended September 30, 1996 and 1995
                                  (UNAUDITED)

                                                 1996            1995
                                                              (Restated)
                                          ---------------  ---------------
Income:
  Interest on loans receivable            $      129,301   $      175,664
  Income from operations of real estate
    held for sale                              1,386,241        1,467,738
  Participation in income of joint
    venture with affiliates                      300,020          283,738
  Interest on short-term investments             170,494          463,387
  Other income                                                    710,155
                                          ---------------  ---------------
    Total income                               1,986,056        3,100,682
                                          ---------------  ---------------
Expenses:
  Provision for potential losses on loans,
    real estate and accrued interest
    receivable                                 2,694,330           70,270
  Administrative                                 903,558          796,057
                                          ---------------  ---------------
      Total expenses                           3,597,888          866,327
                                          ---------------  ---------------
(Loss) income before gain on               
  prepayment of loan receivable               (1,611,832)       2,234,355
                                                            
Gain on prepayment of loan receivable            786,766
                                          ---------------  ---------------
Net (loss) income                         $     (825,066)  $    2,234,355
                                          ===============  ===============
Net (loss) income allocated to
  General Partner                         $      (61,880)  $      167,576
                                          ===============  ===============
Net (loss) income allocated to
  Limited Partners                        $     (763,186)  $    2,066,779
                                          ===============  ===============
Net (loss) income per average number of 
  Limited Partnership Interests outstanding
  (394,263 in 1996 and 400,251 in 1995)   $        (1.94)            5.16
                                          ===============  ===============
Distributions to General Partner          $      107,403   $      143,203
                                          ===============  ===============
Distributions to Limited Partners         $    1,182,827   $    6,492,605
                                          ===============  ===============
Distributions per Limited Partnership
  Interest                                $         3.00   $        16.24
                                          ===============  ===============

The accompanying notes are an integral part of the financial statements.
<PAGE>
                         BALCOR PENSION INVESTORS - IV
                       (AN ILLINOIS LIMITED PARTNERSHIP)

                       STATEMENTS OF INCOME AND EXPENSES
              for the quarters ended September 30, 1996 and 1995
                                  (UNAUDITED)


                                                 1996             1995
                                          ---------------  ---------------
Income:
  Interest on loans receivable            $       44,731   $       76,333
  Income from operations of real estate
    held for sale                                394,733          344,553
  Participation in income of joint
    venture with affiliates                       99,077           59,287
  Interest on short-term investments              64,645          109,162
                                          ---------------  ---------------
    Total income                                 603,186          589,335
                                          ---------------  ---------------

Expenses:
  Provision for potential losses on loans,
    real estate and accrued interest
    receivable                                   694,330           70,270
  Administrative                                 320,305          258,633
                                          ---------------  ---------------
      Total expenses                           1,014,635          328,903
                                          ---------------  ---------------
(Loss) income before gain on
  prepayment of loan receivable                 (411,449)         260,432

Gain on prepayment of loan receivable            786,766
                                          ---------------  ---------------
Net income                                $      375,317   $      260,432
                                          ===============  ===============
Net income allocated to General Partner   $       28,149   $       19,532
                                          ===============  ===============
Net income allocated to Limited Partners  $      347,168   $      240,900
                                          ===============  ===============
Net income per average number of Limited
  Partnership Interests outstanding
  (393,430 in 1996 and 399,531 in 1995)   $         0.88   $         0.60
                                          ===============  ===============
Distribution to General Partner           $       35,801   $       35,801
                                          ===============  ===============
Distribution to Limited Partners          $      393,445   $    5,290,737
                                          ===============  ===============
Distribution per Limited Partnership
  Interest                                $         1.00   $        13.24
                                          ===============  ===============

The accompanying notes are an integral part of the financial statements.
<PAGE>
                         BALCOR PENSION INVESTORS - IV
                       (AN ILLINOIS LIMITED PARTNERSHIP)

                           STATEMENTS OF CASH FLOWS
             for the nine months ended September 30, 1996 and 1995
                                  (UNAUDITED)


                                                 1996            1995
                                                              (Restated)
                                          ---------------  ---------------
Operating activities:
  Net (loss) income                       $     (825,066)  $    2,234,355
  Adjustments to reconcile net (loss) 
    income to net cash provided by 
    operating activities:
      Gain on prepayment of loan 
        receivable                              (786,766)
      Participation in income of joint
        venture with affiliates                 (300,020)        (283,738)
      Provision for potential losses on
        loans and real estate                  2,694,330           70,270
      Amortization of deferred expenses           16,897           16,897
      Net change in:
        Escrow deposits                         (119,645)        (184,105)
        Accounts and accrued interest
          receivable                             186,501           43,358
        Prepaid expenses                        (103,551)        (213,636)
        Accounts and accrued real estate                          376,693
          taxes payable                          233,275
        Due to affiliates                         56,653          (79,781)
        Other liabilities                         (7,263)           8,339
                                          ---------------  ---------------
  Net cash provided by operating 
    activities                                 1,045,345        1,988,652
                                          ---------------  ---------------
Investing activities:
  Distributions from joint venture
    with affiliates                              216,807          256,853
  Collection of principal payments on 
    loans receivable                           2,444,552        1,025,055
  Additions to real estate                      (378,028)        (140,588)
  Proceeds from sale of real estate            5,750,000
  Costs incurred in connection with sale
    of real estate                              (223,330)
  Costs incurred in connection with real
    estate acquired through foreclosure                          (375,000)
                                          ---------------  ---------------
  Net cash provided by investing 
    activities                                 7,810,001          766,320
                                          ---------------  ---------------
<PAGE>
                         BALCOR PENSION INVESTORS - IV
                       (AN ILLINOIS LIMITED PARTNERSHIP)

                           STATEMENTS OF CASH FLOWS
             for the nine months ended September 30, 1996 and 1995
                                  (UNAUDITED)
                                  (Continued)

Financing activities:
  Distribution to Limited Partners            (1,182,827)      (6,492,605)
  Distribution to General Partner               (107,403)        (143,203)
  Change in cash and cash equivalents -
    Early Investment Incentive Fund              143,023           (5,446)
  Repurchase of Limited Partnership
    Interests                                   (292,447)        (537,156)
  Principal payments on mortgage notes
    payable                                     (330,885)        (206,442)
  Release of capital improvement escrows                           23,060
                                          ---------------  ---------------
  Net cash used in financing activities       (1,770,539)      (7,361,792)
                                          ---------------  ---------------
Net change in cash and cash equivalents        7,084,807       (4,606,820)
Cash and cash equivalents at beginning
  of year                                      4,220,385       11,860,415
                                          ---------------  ---------------
Cash and cash equivalents at end of 
  period                                  $   11,305,192   $    7,253,595
                                          ===============  ===============

The accompanying notes are an integral part of the financial statements.
<PAGE>
                          BALCOR PENSION INVESTORS-IV
                       (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, 1996 and all such adjustments are of a normal and recurring
nature.

2. Restatement:

In April 1995, the Partnership received insurance proceeds of $710,155 related
to earthquake damage at the Glendale Fashion Center. The proceeds were used to
reduce the basis of the property, which was consistent with the General
Partner's strategy at that time to redevelop the Center. During the fourth
quarter of 1995, the General Partner revised its strategy and decided to market
the Center for sale as a redevelopment project. As a result, the receipt of
insurance proceeds was recognized as other income at December 31, 1995.
Consequently, at September 30, 1995, real estate held for sale, partners'
capital and other income have been increased by $710,155 from amounts
previously reported.

3. Interest Expense:

During the nine months ended September 30, 1996 and 1995, the Partnership
incurred interest expense on mortgage notes payable of $709,477 and $745,468
and paid interest expense of $709,888 and $745,468, respectively.

4. Transactions with Affiliates:

Fees and expenses paid and payable by the Partnership to affiliates for the
nine months and quarter ended September 30, 1996 are:

                                           Paid
                                   -----------------------
                                    Nine Months    Quarter      Payable
                                    ------------  ---------    ---------- 
   Mortgage servicing fees           $   4,667    $ 1,167           None
   Reimbursement of expenses to
    the General Partner, at cost        146,341     25,858       $101,029

5. Investment in Joint Venture with Affiliates:

The Partnership owns a 15.37% joint venture interest in Perimeter 400 Center
Office Building. The following information has been summarized from the
financial statements of the joint venture:
<PAGE>
                                                               1996   

   Net investment in real estate as of September 30       $26,541,734
   Total liabilities as of September 30                       465,132
   Total income                                             4,295,970
   Net income                                               1,951,983

6. Prepayment of Loan Receivable:

In July 1996, the borrower of the Stonehaven South Apartments loan paid
$2,380,685 in full satisfaction of the loan. The loan balance at the date of
prepayment was $1,588,691. For financial statement purposes, the Partnership
recognized a gain of $786,766 from the prepayment of the loan receivable.

7. Sale of Real Estate:

In September 1996, the Partnership sold the Regency Club Apartments in an all
cash sale for $5,750,000.  From the proceeds of the sale, the Partnership paid
$223,330 in selling costs.  The basis of the property was $5,633,000.  For
financial statement purposes, the Partnership recognized no gain or loss on the
sale of this property. However, the Partnership had previously established an
allowance for potential losses related to Regency Apartments against which its
remaining net investment of $106,330 was written off.

8. Contingency:

A proposed settlement has been reached with respect to the class action    
complaint, Paul Williams and Beverly Kennedy, et al v. Balcor Pension 
Investors, et al. between counsel for the Class and counsel for the defendants.
Notice of the proposed settlement terms was sent to class members in September
1996.  A final hearing on the proposed settlement is expected to be held in
November 1996.  The General Partner does not believe that the proposed
settlement will have a material adverse impact on the Partnership.   

9. Subsequent Events:

(a) In October 1996, the Partnership made a distribution of $6,014,483 to the
holders of Limited Partnership Interests which represents a regular quarterly
distribution of available Cash Flow of $1.00 per Interest for the third quarter
of 1996, and a special distribution of $13.00 per Interest from Mortgage
Reductions received from the Stonehaven South Apartments loan prepayment and
the sale of the Regency Club Apartments.

(b) In October 1996, the Partnership reached a settlement with a former tenant
at the 240 East Ontario Office Building, which was sold in 1993, for rental
income owed to the Partnership pursuant to the terms of the lease.  Under the
terms of the settlement, the Partnership received $600,000 in October 1996,
which will be recognized as settlement income during the fourth quarter of 1996
for financial statement purposes.  An additional $75,000 is due to the
Partnership on December 31, 1996 and a final payment of $75,000 is due on June
30, 1997.  
<PAGE>
(c) In October 1996, the Partnership sold the Pelican Pointe Apartments in an
all cash sale for $9,000,000.  From the proceeds of the sale, the Partnership
paid $312,315 in selling costs.  For financial statement purposes, the
Partnership will recognize a gain of approximately $1,264,000 from the sale of
this property during the fourth quarter of 1996.
<PAGE>
                          BALCOR PENSION INVESTORS-IV
                       (An Illinois Limited Partnership)

                     MANAGEMENT'S DISCUSSION AND ANALYSIS

Balcor Pension Investors-IV (the "Partnership") is a limited partnership formed
in 1982 to invest in wrap-around mortgage loans and, to a lesser extent, make
other junior mortgage loans and first mortgage loans. The Partnership raised
$214,803,000 through the sale of Limited Partnership Interests and utilized
these proceeds to fund thirty-eight loans. The Partnership's remaining loan,
which was collateralized by the Stonehaven South Apartments, was prepaid in
July 1996 and the Regency Club and Pelican Pointe apartment complexes were sold
in September and October 1996, respectively. Currently, the Partnership is
operating five properties held for sale and holds a minority joint venture
interest in one property.

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 1995 for a more complete understanding of
the Partnership's financial position.

Operations
----------

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

The Partnership recognized provisions for potential losses on real estate
totaling approximately $2,694,000 related to certain of its properties during
the second and third quarters of 1996. In addition, in April 1995, the
Partnership received insurance proceeds of $710,155 related to the Glendale
Fashion Center which were recognized as other income. These events were the
primary reasons a net loss was recognized during the nine months ended
September 30, 1996 as compared to net income for the same period in 1995.  The
recognition of a gain on the July 1996 Stonehaven South Apartments loan
prepayment partially offset the decrease in net income during the nine months
and resulted in an increase in net income during the quarter ended September
30, 1996 as compared to the same period in 1995.  Further discussion of the
Partnership's operations is summarized below.

1996 Compared to 1995
---------------------

Unless otherwise noted, discussions of fluctuations between 1996 and 1995 refer
to both the nine months and quarters ended September 30, 1996 and 1995.

The Colonial Coach Mobile Home Park loan was prepaid in September 1995. In
addition, installments due from the settlement of the remaining balance of the
Briarwood Apartments loan receivable were received and recognized as interest
income during the third quarter of 1995 and the second quarter of 1996. These
events resulted in a decrease in net interest income on loans receivable during
1996 as compared to 1995. 
<PAGE>
Operations of real estate held for sale represent the net operations of those
properties acquired by the Partnership through foreclosure. At September 30,
1996, the Partnership was operating six properties. The funds advanced for
these six properties by the Partnership total approximately $24,900,000,
representing approximately 13% of the original funds advanced.  Electrical and
plumbing repair projects were completed at the Pelican Pointe Apartments
resulting in higher maintenance expense during 1996. In addition, the cost for
security contracts increased at the Del Lago Apartments. These events resulted
in a decrease in income from real estate held for sale during the nine months
ended September 30, 1996 as compared to the same period in 1995. However,
operations improved at the Colony Apartments due to increased rental income
resulting from higher rental rates and due to the completion of asphalt repairs
during the third quarter of 1995. Increased service income was received during
the third quarter of 1996 at the Palm View Apartments.  These events partially
offset the decrease for the nine months and resulted in an increase in income
from real estate held for sale during the quarter ended September 30, 1996 as
compared to the same period in 1995.

Participation in income of joint venture with affiliates represents the
Partnership's 15.37% share of the operations from the Perimeter 400 Center
Office Building. Higher rental income due to improved occupancy resulted in an
increase in participation in income of joint venture with affiliates during
1996 as compared to 1995.

Lower average cash balances were available for investment due to the payment of
special distributions to Limited Partners in July and October 1995 of proceeds
received in connection with prior loan repayments and property sales. This
resulted in a decrease in interest income on short-term investments during 1996
as compared to 1995. 

In April 1995, the Partnership received insurance proceeds of $710,155 related
to earthquake damage incurred at the Glendale Fashion Center which was
recognized as other income.

Provisions are charged to income when the General Partner believes an
impairment has occurred, either in a borrower's ability to repay the loan or in
the value of the collateral property. Determinations of fair value are made
periodically on the basis of performance under the terms of the loan agreement
and assessments of property operations. Determinations of fair value represent
estimations based on many variables which affect the value of real estate,
including economic and demographic conditions. During the nine months ended
September 30, 1996, the Partnership did not recognize any provisions for
potential losses related to its loan. The Partnership recognized provisions of
$2,694,330 related to the North Kent Mall and the Del Lago and Regency Club
apartment complexes during the nine months ended September 30, 1996 to provide
for the change in the estimates of the fair values of the properties. During
the third quarter of 1996, allowances of $106,330 related to the Regency Club
Apartments were written off in connection with the sale of the property. The
Partnership recognized a provision of $70,270 related to the Colonial Coach
loan during the nine months ended September 30, 1995 and wrote-off allowances
of $320,270 in connection with the prepayment of the loan at a discount. 
<PAGE>
The Partnership incurred legal, consulting, printing and postage costs in
connection with its response to a tender offer and certain related litigation
during 1996. As a result, administrative expenses increased during 1996 as
compared to 1995.  This increase was partially offset by lower accounting fees.

During the third quarter of 1996, the Partnership recognized a gain of $786,766
in connection with the prepayment of the Stonehaven South Apartments loan.

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

The cash position of the Partnership increased by approximately $7,085,000 as
of September 30, 1996 when compared to December 31, 1995 primarily due to the
Stonehaven South Apartments loan prepayment and the sale of the Regency Club
Apartments.  The Partnership received cash flow of approximately $1,045,000
from its operating activities, primarily from interest income earned on its
investment in loans receivable and short-term interest bearing instruments and
cash flow generated by the Partnership's properties held for sale, net of
administrative expenses.  The Partnership also received cash of approximately
$7,810,000 from its investing activities primarily due to the receipt of
proceeds totaling approximately $2,370,000 from the Stonehaven South Apartments
loan prepayment and proceeds totaling approximately $5,527,000 from the sale of
Regency Club Apartments.  The Partnership used cash in its financing activities
which consisted of the payment of distributions to the Partners totaling
approximately $1,290,000, the payment of principal of approximately $331,000 on
the mortgage notes payable and repurchases of Limited Partnership Interests at
a cost of approximately $292,000. The Partnership also made a special
distribution to Limited Partners from Mortgage Reductions in October 1996 as
described below.

The Partnership classifies the cash flow performance of its properties as
either positive, a marginal deficit or a significant deficit, each after
consideration of debt service payments unless otherwise indicated. A deficit is
considered to be significant if it exceeds $250,000 annually or 20% of the
property's rental and service income. The Partnership defines cash flow
generated from its properties as an amount equal to the property's revenue
receipts less property related expenditures, which include debt service
payments, if applicable. The Del Lago and Pelican Pointe apartment complexes do
not have underlying debt. During the nine months ended September 30, 1996 and
1995, five of the Partnership's six remaining properties generated positive
cash flow while Glendale Fashion Center operated at a significant cash flow
deficit. However, significant leasing costs were incurred at North Kent Mall in
order to lease vacant space and renew existing tenant leases which were
scheduled to expire during 1996. These costs were not included in classifying
the cash flow performance of the Mall since they are non-recurring
expenditures. Had these costs been included, the Mall would have operated at a
significant deficit during 1996.  The Regency Club Apartments, which was sold
in September 1996, generated positive cash flow during the nine months ended
September 30, 1995 and prior to its sale in 1996.  The Perimeter 400 Center
Office Building, a property in which the Partnership holds a minority joint
venture interest, also generated positive cash flow during 1996 and 1995. 
<PAGE>
As of September 30, 1996, the occupancy rates of the Partnership's residential
properties ranged from 91% to 100%. The current occupancy level of North Kent
Mall is 67%. After reviewing current market conditions, the General Partner
determined that it is in the best interest of the Partnership to sell the North
Kent Mall and therefore, is actively marketing the property for sale. The
Glendale Fashion Center is currently vacant due to the Partnership's strategy
to market the property for sale as a redevelopment project. The Partnership has
a contract to sell Glendale Fashion Center. Many rental markets continue to
remain extremely competitive; therefore, the General Partner's goals are to
maintain high occupancy levels while increasing rents where possible, and to
monitor and control operating expenses and capital improvement requirements at
the properties.

In April 1984, the Partnership funded a second mortgage loan collateralized by
the Stonehaven South Apartments. In June 1990, the borrower of the loan filed
for protection under the U.S. Bankruptcy Code and in June 1991, the Partnership
and the borrower executed a loan modification agreement which was approved by
the Bankruptcy Court in August 1991. Pursuant to the modification,
approximately $2,100,000 of the principal amount of the loan was considered a
secured claim. The remaining portion was considered an unsecured claim and was
payable from the net proceeds received by the borrower, if any, upon the sale
or refinancing of the property. In July 1996, the borrower paid $2,120,289 to
the Partnership in full satisfaction of the secured portion of the loan,
$250,000 in full satisfaction of the unsecured claim and $10,096 in full
satisfaction of the legal fees incurred in connection with the bankruptcy.  See
Note 6 of Notes to Financial Statements for additional information.

In September 1996, the Partnership sold the Regency Club Apartments in an all
cash sale for $5,750,000.  From the proceeds of the sale, the Partnership paid
$223,330 in selling costs.  A portion of the remaining proceeds were used to
make a special distribution to the Limited Partners in October 1996.  See Note
7 of Notes to Financial Statements for additional information.

In October 1996, the Partnership sold the Pelican Pointe Apartments in an all
cash sale for $9,000,000.  From the proceeds of the sale, the Partnership paid
$312,315 in selling costs.  See Note 9(c) of Notes to Financial Statements for
additional information.

The General Partner believes that the market for multifamily housing properties
has become increasingly favorable to sellers of these properties. During 1996,
the Partnership sold the Pelican Pointe and Regency Club apartment complexes.
Currently, the Partnership has contracts to sell the Colony, Del Lago and Palm
View apartment complexes and the Glendale Fashion Center for sales prices of
$7,100,000, $2,800,000, $6,500,000 and $11,500,000, respectively.  The
Partnership is actively marketing the North Kent Mall for sale. Additionally,
the General Partner is marketing for sale the commercial property in which it
holds a minority joint venture interest. The General Partner examines each
property individually by property type and market in determining the optimal
time to sell each property.

Changing interest rates can impact real estate values in several ways.
Generally, declining interest rates may lower the cost of capital allowing
buyers to pay more for a property whereas rising interest rates may increase
the cost of capital and lower the price of real estate.   
<PAGE>
In October 1996, the Partnership reached a settlement with a former tenant at
the 240 East Ontario Office Building, which the Partnership sold in 1993, for
rental income owed to the Partnership pursuant to the terms of the lease.
Under the terms of the settlement, the Partnership received $600,000 in October
1996.  An additional $75,000 is due to the Partnership on December 31, 1996 and
a final payment of $75,000 is due on June 30, 1997.

Certain of the Partnership's properties held for sale are owned through the use
of third-party mortgage loan financing and, therefore, the Partnership is
subject to the financial obligations required by such loans. The Partnership
has only one loan maturing within the next two years, a mortgage loan of
approximately $1,937,000 collateralized by the North Kent Mall. The Partnership
negotiated an extension of the maturity of the mortgage loan from July 1996 to
December 1996 and made a $100,000 principal payment on the loan as a condition
of the extension. The Partnership is marketing the property for sale to satisfy
the obligation. However, the Partnership may use Partnership reserves to repay
the loan.

In October 1996, the Partnership paid a distribution of $6,014,483 ($14.00 per
Interest) to the holders of Limited Partnership Interests representing the
regular quarterly distribution of Cash Flow of $1.00 per Interest for the third
quarter of 1996 and a special distribution of $13.00 per Interest from Mortgage
Reductions received from the Stonehaven South Apartments loan prepayment and
the sale of Regency Club Apartments.  The level of the regular quarterly
distribution is consistent with the amount distributed for the second quarter
of 1996. Including the October 1996 distribution, Limited Partners have
received cash distributions totaling $589.23 per $500 Interest. Of this amount,
$325.10 represents Cash Flow from operations and $264.13 represents a return of
Original Capital. In October 1996, the Partnership also paid $35,801 to the
General Partner as its distributive share of Cash Flow distributed for the
third quarter of 1996 and made a contribution to the Early Investment Incentive
Fund of $11,934.

The Partnership expects to continue making quarterly cash distributions;
however, the level of such future distributions will be dependent upon the cash
flow generated by the operations of the Partnership's properties held for sale,
less administrative expenses. The General Partner believes the Partnership has
retained an appropriate amount of working capital to meet current cash or
liquidity requirements which may occur.

During the nine months ended September 30, 1996, the General Partner on behalf
of the Partnership used amounts placed in the Early Investment Incentive Fund
to repurchase 2,669 Interests from Limited Partners at a total cost of
$292,447.

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 PENSION INVESTORS-IV
                       (An Illinois Limited Partnership)

                          PART II - OTHER INFORMATION

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

Colony Apartments
-----------------

As previously reported, on September 26, 1996, the Partnership contracted to
sell Colony Apartments, Chapel Hill, North Carolina, to an unaffiliated party,
Colony Apartments/Chapel Hill Limited Partnership, a Maryland limited
partnership, for a sale price of $7,100,000.  Pursuant to an agreement between
the Partnership and the purchaser, the closing date has been extended to the
later of (i) three business days after receipt from the holder of the first
mortgage loan of written approval to the sale of the property and the
prepayment of the loan or (ii) November 25, 1996.  The purchaser has deposited
an additional $50,000 in earnest money for a total of $150,000. 

Del Lago Apartments
-------------------

As previously reported, on August 29, 1996, the Partnership contracted to sell
Del Lago Apartments, Tampa, Florida, to an unaffiliated party, Alliance
Holdings, L.L.C., an Illinois limited liability company. The sale price is
$2,800,000. The purchaser has exercised its option to extend the closing date
to December 30, 1996 and has deposited an additional $75,000 in earnest money
which amount is non-refundable in the event the sale does not close, except in
the event of a default by the Partnership. The total earnest money deposit is
$250,000.

Pelican Pointe Apartments
-------------------------

As previously reported, on August 30, 1996, the Partnership contracted to sell
Pelican Pointe Apartments, Pompano Beach, Florida, to an unaffiliated person,
David Morrow. The sale price is $9,000,000. The purchaser assigned his rights
under the agreement of sale to an affiliate, Pointe Pelican Corporation, a
Florida corporation, and the sale closed on October 31, 1996. From the proceeds
of the sale, the Partnership paid $157,500 as a brokerage commission to an
unaffiliated party, $90,000 to an affiliate of the third party providing
property management services for the property as a fee for services rendered in
connection with the sale of the property and $64,815 in closing costs. The
purchaser received proration credits of $100,000 for corrective work resulting
from the purchaser's due diligence review. The Partnership received the
remaining $8,587,685 of sale proceeds.

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

(a)(3) Exhibits:
<PAGE>
(4) Form of Confirmation regarding Interests in the Registrant set forth as
Exhibit 4 to the Registrant's Report on Form 10-Q for the quarter ended June
30, 1992 (Commission File No. 0-11699) is incorporated herein by reference.

(10)(a) Agreement of Sale and attachment thereto relating to the sale of
Regency Club Apartments, Evansville, Indiana, previously filed as Exhibit (2)
to the Partnership's Current Report on Form 8-K dated August 13, 1996, are
incorporated herein by reference.

(b)(i) Agreement of Sale and attachment thereto relating to the sale of Pelican
Pointe Apartments, Pompano Beach, Florida, previously filed as Exhibit (2) to
the Partnership's Current Report on Form 8-K dated August 29, 1996, are
incorporated herein by reference.

(ii) First Amendment dated September 30, 1996 to Agreement of Sale relating to
the sale of Pelican Pointe Apartments, Pompano Beach, Florida, previously filed
as Exhibit (99)(b) to the Partnership's Current Report on Form 8-K dated
September 16, 1996, is incorporated herein by reference.

(c)(i) Agreement of Sale dated October 10, 1996 and attachment thereto relating
to the sale of Glendale Fashion Center, Glendale, California previously filed
as Exhibit (2) to the Partnership's Current Report on Form 8-K dated September
16, 1996, are incorporated herein by reference.

(ii) First Amendment to Agreement of Purchase and Sale dated November 8, 1996
relating to the sale of Glendale Fashion Center, Glendale, California is
attached hereto.

(27) Financial Data Schedule of the Registrant for the nine months ended
September 30, 1996 is attached hereto.

(99)(a) First Amendment dated October 25, 1996 to Agreement of Sale relating to
the sale of Colony Apartments, Chapel Hill, North Carolina is attached hereto.

(b) Letter Agreement dated October 23, 1996 relating to the sale of Del Lago
Apartments, Tampa, Florida is attached hereto.


(b) Reports on Form 8-K:

(i) A Current Report on Form 8-K dated August 13, 1996 reporting the contract
to sell the Regency Club Apartments, Evansville, Indiana.

(ii) A Current Report on Form 8-K dated August 29, 1996 reporting each of the
contracts to sell the Pelican Pointe Apartments, Pompano Beach, Florida and Del
Lago Apartments, Tampa, Florida.
  
(iii) A Current Report on Form 8-K dated September 16, 1996 reporting each of
the contracts to sell the Glendale Fashion Center, Glendale, California; Palm
View Apartments, St. Petersburg, Florida; and Colony Apartments, Chapel Hill,
North Carolina; and the modifications to each of the contracts to sell the Del
Lago Apartments, Tampa, Florida and Pelican Pointe Apartments, Pompano Beach,
Florida.
<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 PENSION INVESTORS-IV



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



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



Date:  November 13, 1996
      ----------------------------
<PAGE>