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, 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 0-11699
                       -------

                        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, 1997 and December 31, 1996
                                  (Unaudited)

                                    ASSETS

                                                 1997            1996
                                            --------------  --------------
Cash and cash equivalents                   $   5,768,763   $  29,204,900
Cash and cash equivalents - Early
  Investment Incentive Fund                     2,597,316         185,167
Accounts and accrued interest receivable          164,568       1,092,340
Prepaid expenses                                   19,901          54,692
                                            --------------  --------------
                                                8,550,548      30,537,099
                                            --------------  --------------
Real estate held for sale (net of allowance
  of $1,491,800 in 1997 and $4,023,000
  in 1996)                                     10,904,343      13,258,400

Investment in joint venture with affiliates                       268,975
                                            --------------  --------------
                                               10,904,343      13,527,375
                                            --------------  --------------
                                            $  19,454,891   $  44,064,474
                                            ==============  ==============

                       LIABILITIES AND PARTNERS' CAPITAL

Accounts and accrued real estate taxes
  payable                                   $     132,926   $     533,906
Due to affiliates                                 131,773         145,771
Security deposits                                                  12,489
Mortgage notes payable                          2,046,740       3,883,828
                                            --------------  --------------
    Total liabilities                           2,311,439       4,575,994
                                            --------------  --------------
Commitments and contingencies

Limited Partners' capital (429,606 
  Interests issued and outstanding)            26,577,982      48,752,958

Less Interests held by Early Investment
  Incentive Fund (41,330 in 1997 and 1996)     (9,264,478)     (9,264,478)
                                            --------------  --------------
                                               17,313,504      39,488,480
<PAGE>
                         BALCOR PENSION INVESTORS - IV
                       (AN ILLINOIS LIMITED PARTNERSHIP)

                                BALANCE SHEETS
                   September 30, 1997 and December 31, 1996
                                  (Unaudited)
                                  (Continued)


                                                 1997            1996
                                            --------------  --------------

General Partner's deficit                        (170,052)           None
                                            --------------  --------------
    Total partners' capital                    17,143,452      39,488,480
                                            --------------  --------------
                                            $  19,454,891   $  44,064,474
                                            ==============  ==============

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, 1997 and 1996
                                  (Unaudited)


                                                 1997            1996
                                            --------------  --------------
Income:
  Interest on loan receivable                               $     129,301
  Interest on short-term investments        $     436,920         170,494
  Settlement income                                75,000
                                            --------------  --------------
    Total income                                  511,920         299,795
                                            --------------  --------------
Expenses:
  Loss (income) from operations of real
    estate held for sale                          201,545      (1,386,241)
  Participation in loss (income) of joint
    venture with affiliates                        81,930        (300,020)
  Provision for potential losses on
    real estate                                 2,354,057       2,694,330
  Administrative                                  544,026         903,558
                                            --------------  --------------
      Total expenses                            3,181,558       1,911,627
                                            --------------  --------------
Loss before gain on prepayment of loan       
  receivable and extraordinary item            (2,669,638)     (1,611,832)
                                                             
Gain on prepayment of loan receivable                             786,766
                                            --------------  --------------
Loss before extraordinary item                 (2,669,638)       (825,066)

Extraordinary item:
  Gain on forgiveness of debt                   1,769,057
                                            --------------  --------------
Net loss                                    $    (900,581)  $    (825,066)
                                            ==============  ==============
Loss before extraordinary item
  allocated to General Partner                       None   $     (61,880)
                                            ==============  ==============
Loss before extraordinary item
  allocated to Limited Partners             $  (2,669,638)  $    (763,186)
                                            ==============  ==============
Loss before extraordinary item per average
  number of Limited Partnership Interests
  outstanding (388,276 in 1997 and 394,263
  in 1996)                                  $       (6.88)          (1.94)
                                            ==============  ==============
<PAGE>
                         BALCOR PENSION INVESTORS - IV
                       (AN ILLINOIS LIMITED PARTNERSHIP)

                       STATEMENTS OF INCOME AND EXPENSES
             for the nine months ended September 30, 1997 and 1996
                                  (Unaudited)
                                  (Continued)


Extraordinary item allocated to
  General Partner                                    None            None
                                            ==============  ==============
Extraordinary item allocated to
  Limited Partners                          $   1,769,057            None
                                            ==============  ==============
Extraordinary item per average number of
  Limited Partnership Interests outstanding
  (388,276 in 1997 and 394,263 in 1996)     $        4.56            None
                                            ==============  ==============
Net loss allocated to General Partner                None   $     (61,880)
                                            ==============  ==============
Net loss allocated to Limited Partners      $    (900,581)  $    (763,186)
                                            ==============  ==============
Net loss per average number of Limited
  Partnership Interests outstanding         $       (2.32)  $       (1.94)
  (388,276 in 1997 and 394,263 in 1996)     ==============  ==============

Distributions to General Partner            $     205,853   $     107,403
                                            ==============  ==============
Settlement Distribution to Limited Partners $      16,056            None
                                            ==============  ==============
Distributions to Limited Partners           $  21,258,339   $   1,182,827
                                            ==============  ==============
Distributions per Limited Partnership
  Interest                                  $       54.75   $        3.00
                                            ==============  ==============

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, 1997 and 1996
                                  (Unaudited)

                                                1997            1996
                                            --------------  --------------
Income:
  Interest on loan receivable                               $      44,731
  Participation in income of joint                                 99,077
    venture with affiliates
  Interest on short-term investments        $     121,923          64,645
                                            --------------  --------------
    Total income                                  121,923         208,453
                                            --------------  --------------
Expenses:
  Loss (income) from operations of real
    estate held for sale                           57,146        (394,733)
  Provision for potential losses on
    real estate                                 1,769,057         694,330
  Administrative                                  120,042         320,305
                                            --------------  --------------
      Total expenses                            1,946,245         619,902
                                            --------------  --------------
Loss before gain on prepayment of loan
  receivable and extraordinary item            (1,824,322)       (411,449)

Gain on prepayment of loan receivable                             786,766
                                            --------------  --------------
(Loss) income before extraordinary item        (1,824,322)        375,317

Extraordinary item:
  Gain on forgiveness of debt                   1,769,057
                                            --------------  --------------
Net (loss) income                           $     (55,265)  $     375,317
                                            ==============  ==============
Income before extraordinary item
  allocated to General Partner                       None   $      28,149
                                            ==============  ==============
(Loss)income before extraordinary item
  allocated to Limited Partners             $  (1,824,322)  $     347,168
                                            ==============  ==============
(Loss)income before extraordinary item per
 average number of Limited Partnership
 Interests outstanding (388,276 in 1997
 and 394,263 in 1996)                       $       (4.70)  $        0.88
                                            ==============  ==============
Extraordinary item allocated to
  General Partner                                    None            None
                                            ==============  ==============
<PAGE>
                         BALCOR PENSION INVESTORS - IV
                       (AN ILLINOIS LIMITED PARTNERSHIP)

                       STATEMENTS OF INCOME AND EXPENSES
              for the quarters ended September 30, 1997 and 1996
                                  (Unaudited)
                                  (Continued)

                                                1997            1996
                                            --------------  --------------
Extraordinary item allocated to
  Limited Partners                          $   1,769,057            None
                                            ==============  ==============
Extraordinary item per average number of
  Limited Partnership Interests outstanding
  (388,276 in 1997 and 394,263 in 1996)     $        4.56            None
                                            ==============  ==============
Net income allocated to General Partner              None   $      28,149
                                            ==============  ==============
Net (loss) income allocated to Limited
  Partners                                  $     (55,265)  $     347,168
                                            ==============  ==============
Net (loss) income per average number of
 Limited Partnership Interests outstanding
  (388,276 in 1997 and 394,263 in 1996)     $       (0.14)  $        0.88
                                            ==============  ==============
Distribution to General Partner             $      71,601   $      35,801
                                            ==============  ==============
Distribution to Limited Partners            $     776,560   $     393,445
                                            ==============  ==============
Distribution per Limited Partnership
  Interest                                  $        2.00   $        1.00
                                            ==============  ==============

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, 1997 and 1996
                                  (Unaudited)


                                                 1997            1996
                                            --------------  --------------
Operating activities:
  Net loss                                  $    (900,581)  $    (825,066)
  Adjustments to reconcile net loss to net
    cash provided by operating activities:
      Gain on forgiveness of debt              (1,769,057)
      Gain on prepayment of loan 
        receivable                                               (786,766)
      Participation in loss (income) of 
        joint venture with affiliates              81,930        (300,020)
      Provision for potential losses on
        real estate                             2,354,057       2,694,330
      Amortization of deferred expenses                            16,897
      Net change in:
        Escrow deposits                                          (119,645)
        Accounts and accrued interest
          receivable                              927,772         186,501
        Prepaid expenses                           34,791        (103,551)
        Accounts and accrued real estate
          taxes payable                          (286,289)        233,275
        Due to affiliates                         (13,998)         56,653
        Other liabilities                          (3,000)         (7,263)
                                            --------------  --------------
  Net cash provided by operating activities       425,625       1,045,345
                                            --------------  --------------
Investing activities:
  Capital contribution to joint venture
    with affiliate                                (81,930)
  Distributions from joint venture
    with affiliates                               268,975         216,807
  Collection of principal payments on 
    loan receivable                                             2,444,552
  Additions to real estate                                       (378,028)
  Proceeds from sale of real estate                             5,750,000
  Costs incurred in connection with sale
    of real estate                                               (223,330)
                                            --------------  --------------
  Net cash provided by investing activities       187,045       7,810,001
                                            --------------  --------------
<PAGE>
                         BALCOR PENSION INVESTORS - IV
                       (AN ILLINOIS LIMITED PARTNERSHIP)

                           STATEMENTS OF CASH FLOWS
             for the nine months ended September 30, 1997 and 1996
                                  (Unaudited)
                                  (Continued)


                                                 1997            1996
                                           --------------  --------------
Financing activities:
  Distributions to Limited Partners           (21,274,395)     (1,182,827)
  Distributions to General Partner               (205,853)       (107,403)
  Contribution by General Partner                  35,801
  Change in cash and cash equivalents -
    Early Investment Incentive Fund            (2,412,149)        143,023
  Repurchase of Limited Partnership
    Interests                                                    (292,447)
  Principal payments on mortgage notes
    payable                                      (192,211)       (330,885)
                                            --------------  --------------
  Net cash used in financing activities       (24,048,807)     (1,770,539)
                                            --------------  --------------
Net change in cash and cash equivalents       (23,436,137)      7,084,807
Cash and cash equivalents at beginning
  of year                                      29,204,900       4,220,385
                                            --------------  --------------
Cash and cash equivalents at end of period  $   5,768,763   $  11,305,192
                                            ==============  ==============

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 Policies:

(a) 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, 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 provisions in the Partnership Agreement.
In order for the capital accounts of the General Partner and Limited Partners
to appropriately reflect their remaining economic interests as provided for in
the Partnership Agreement, the loss allocations between the partners have been
adjusted for financial statement purposes in 1997.

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. In September 1997, the lender on North Kent Mall acquired the
property pursuant to a deed in lieu of foreclosure; however, the Partnership
still owns an outlot at the property, which it is currently marketing for sale.
The Partnership has entered into a contract to sell the Glendale Fashion
Center. During 1996, the Partnership sold five properties and its minority
joint venture interest in one additional property. A majority of the proceeds
from the sales were distributed to Limited Partners in January and April 1997.
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 and costs stemming
from litigation involving the Partnership including, but not limited to, the
lawsuit discussed in Note 8 of Notes to 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 continues to exist or
arises, reserves may be held by the Partnership for a longer period of time.

3. Interest Expense:

During the nine months ended September 30, 1997 and 1996, the Partnership
incurred interest expense on mortgage notes payable of $282,285 and $709,477
and paid interest expense of $286,111 and $709,888, 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, 1997 are:
<PAGE>
                                           Paid
                                    ----------------------
                                    Nine Months    Quarter      Payable
                                    -----------   --------   ----------  
   Reimbursement of expenses to
     the General Partner, at cost     $ 125,997   $ 42,416    $ 131,773

The General Partner made a contribution of $35,801 in connection with the
settlement of certain litigation as further discussed in Note 7 of Notes to
Financial Statements.

5. Real Estate Relinquished through Foreclosure:

North Kent Mall is composed of two portions, a shopping center (the "Mall") and
a land parcel on which a theater is located (the "North Kent Outlot"), each of
which is collateralized by a mortgage loan from a different lender. In
September 1997, the lender of the mortgage loan collateralized by the Mall took
title to the property pursuant to a deed in lieu of foreclosure. In connection
with the foreclosure, the Partnership recognized a $1,769,057 extraordinary
gain on forgiveness of debt. In addition, the Partnership recognized a
$1,769,057 provision for losses equal to the carrying value of the property.
For financial statement purposes, the basis of the Mall was written off
against the previously established loss allowance at $4,885,287 related to
this property. The Partnership continues to own the North Kent Outlot.

6. Investment in Joint Venture with Affiliates:

The Perimeter 400 Center Office Building was owned by a joint venture
consisting of the Partnership and three affiliates. The Partnership's sharing
percentage was 15.37%. In 1996, the joint venture sold the property. Pursuant
to the terms of the sale, $1,750,000 of the proceeds were retained by the joint
venture until September 1997, at which time the funds were released in full.
The Partnership's share was $268,975.  
 
7. Settlement of Litigation:

(a) A settlement received final approval by the court in November 1996 in the
class action, Paul Williams and Beverly Kennedy, et. al. v. Balcor Pension
Investors, et. al. upon the terms described in the notice to class members in
September 1996. The General Partner made a contribution of $35,801 to the
Partnership, from which the plaintiff's counsel was paid $3,581 pursuant to the
settlement agreement. In February 1997, the General Partner made a settlement
payment of the remaining $32,220 ($0.08 per Interest) to members of the class
pursuant to the settlement agreement. Of the settlement amount, $16,056 was
paid to original investors who held their Limited Partnership Interests at the
date of the settlement and was recorded as a distribution to Limited Partners
in the Financial Statements. The remaining portion of the settlement of $16,164
was paid to original investors who previously sold their Interests in the
<PAGE>
Partnership. This amount was recorded as an administrative expense in the
Financial Statements. Similar contributions and payments were made on the seven
other partnerships included in the lawsuit in addition to those payments
described above. The Balcor Company paid an additional $635,000 to the
plaintiffs' class counsel and The Balcor Company received approximately
$946,000 from the eight partnerships as a reimbursement of its legal expenses,
of which $169,393 was the Partnership's share. The settlement had no material
impact on the Partnership.

(b) In October 1996, the Partnership reached a settlement totaling $750,000
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
tenant's lease.  Under the terms of the settlement, the Partnership received
$675,000 in 1996. In June 1997, the Partnership received a final payment of
$75,000, which was recognized as settlement income for financial statement
purposes.  

8. Contingency:

The Partnership is currently involved in a lawsuit whereby the Partnership, the
General Partner and certain third parties have been named as defendants seeking
damages relating to tender offers to purchase interests in the Partnership and
nine affiliated partnerships initiated by the third party defendants in 1996.
The defendants continue to vigorously contest this action. The action has been
dismissed with prejudice and plaintiffs have filed an appeal. It is not
determinable at this time whether or not an unfavorable decision in this 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.  

9. Subsequent Event:

In October 1997, the Partnership made a distribution of $859,212 ($2.00 per
Interest) to the holders of Limited Partnership Interests which represents a
special distribution of Mortgage Reductions primarily from the release of sale
holdbacks on the Regency Club Apartments and Perimeter 400 Center Office
Building. 
<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. As a result of the repayments,
foreclosures and write-offs of loans in prior years, the Partnership has no
loans in its portfolio as of September 30, 1997. In September 1997, the lender
on North Kent Mall acquired title to the property pursuant to a deed in lieu of
foreclosure; however, the Partnership still owns an outlot at the property (the
"North Kent Outlot"), which it is currently marketing for sale. The Partnership
has entered into a contract for the sale of the Glendale Fashion Center.

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
---------------------

The Partnership recognized a gain on forgiveness of debt in September 1997
related to the North Kent Mall foreclosure. The Partnership generated a loss
from operations of real estate held for sale during 1997 as compared to income
during 1996 primarily due to the 1996 sales of five of the Partnership's
properties, which were generating income from operations prior to their sales,
including the Perimeter 400 Center Office Building in which the Partnership
held a minority joint venture interest. In addition, the Partnership recognized
a gain in July 1996 related to the Stonehaven South Apartments loan prepayment.
The net effect of these events resulted in an increase in the net loss during
the nine months ended September 30, 1997 as compared to the same period in
1996, and a net loss during the quarter ended September 30, 1997 as compared to
net income during the same period in 1996. Further discussion of the
Partnership's operations is summarized below.

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

Unless otherwise noted, discussions of fluctuations between 1997 and 1996 refer
to both the nine months and quarters ended September 30, 1997 and 1996. 

As a result of the prepayment of the Stonehaven South Apartments loan in July
1996, interest income on loan receivable ceased. In addition, the Partnership
recognized a gain of $786,766 in 1996 in connection with the prepayment of the
loan receivable.
<PAGE>
Higher average cash balances were available for investment primarily due to
proceeds received by the Partnership from the 1996 property sales prior to
distribution to Limited Partners in January 1997. This resulted in an increase
in interest income on short-term investments in 1997 as compared to 1996. In
addition, higher average cash balances were available for investment in the
Early Investment Incentive Fund due to the discontinuance of repurchases of
Interests from Limited Partners in February 1997, which was the primary reason
for the increase in interest income on short-term investments during the
quarter ended September 30, 1997 as compared to the same period in 1996.

In June 1997, the Partnership received $75,000 as a final payment related to
the October 1996 settlement with a former tenant of the 240 East Ontario Office
Building which was sold in 1993. The settlement related to rental income owed
to the Partnership pursuant to the terms of the tenant's lease.  This amount
was recognized as settlement income for financial statement purposes.

Operations of real estate held for sale represent the net operations of those
properties acquired by the Partnership through foreclosure. At September 30,
1997, the Partnership was operating the Glendale Fashion Center and the North
Kent Outlot. The funds advanced for these two investments by the Partnership
total approximately $8,066,000, representing approximately 4% of original funds
advanced. In September 1997, the lender on North Kent Mall acquired the
property pursuant to a deed in lieu of foreclosure, with the exception of the
North Kent Outlot. The North Kent Mall was generating income prior to
foreclosure. In 1996 the Partnership sold five properties, which were
generating income from operations prior to their sales which resulted in a
significant decrease in income from operations of real estate held for sale
during 1997. In addition, the Glendale Fashion Center operated at a loss during
1997 and 1996. These were the primary reasons the Partnership recognized a loss
from real estate held for sale during 1997 as compared to income in 1996. 

Participation in loss (income) of joint venture with affiliates represents the
Partnership's 15.37% share of the operations from the Perimeter 400 Center
Office Building. In December 1996, the joint venture sold the property. During
the first quarter of 1997, the Partnership paid its share of additional
expenses related to the property. As a result, the Partnership recognized
participation in loss of joint venture with affiliates during the nine months
ended September 30, 1997 as compared to income during the same period in 1996.

Provisions are charged to income when the General Partner believes an
impairment has occurred to the value of its properties. Determinations of fair
value are made periodically on the basis of assessments of property operations
and the property's estimated sales price less closing costs. Determinations of
fair value represent estimations based on many variables which affect the value
of real estate, including economic and demographic conditions. The Partnership
did not recognize any provisions for potential losses for its loan during the
nine months ended September 30, 1996. The Partnership recognized provisions of
$2,354,057 related to the North Kent Mall during the nine months ended
September 30, 1997, and $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 changes in the estimates of the fair values
of the properties. The Partnership wrote off allowances of $4,885,257 in
connection with the foreclosure of the North Kent Mall in 1997.
<PAGE>
The Partnership incurred additional legal, investor processing, consulting,
printing and postage costs in connection with its response to a tender offer
and certain related litigation during 1996. This was the primary reason for the
decrease in administrative expenses during 1997 as compared to 1996. The
Partnership also incurred higher portfolio management fees during 1996 which
contributed to the decrease.

In September 1997, the Partnership recognized a $1,769,057 extraordinary gain
on forgiveness of debt in connection with the North Kent Mall foreclosure. See
Liquidity and Capital Resources, below, for additional information.

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

The cash position of the Partnership as of September 30, 1997 decreased by
approximately $23,436,000 when compared to December 31, 1996 primarily due to
the payment of a special distribution to Limited Partners in January 1997 of
proceeds from the 1996 property sales. The Partnership received cash flow of
approximately $426,000 from its operating activities, primarily from interest
income earned on short-term interest bearing instruments and the collection of
receivables related to properties sold in 1996, net of administrative expenses.
The Partnership received cash from its investing activities from net
distributions from joint venture with affiliates totaling approximately
$187,000. The Partnership's financing activities consisted of the payment of
distributions to the Partners totaling approximately $21,481,000, an increase
in restricted cash and cash equivalents of approximately $2,412,000 due to the
discontinuance of the repurchase of Interests from Limited Partners in February
1997, a contribution by the General Partner of approximately $36,000, and the
payment of principal of approximately $192,000 on the mortgage notes payable.
In addition, in October 1997 the Partnership made a special distribution of
$859,212 to Limited Partners primarily from the release of sale holdbacks on
the Regency Club Apartments and Perimeter 400 Center Office Building.

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. In September 1997, the lender of the mortgage loan collateralized by
the North Kent Mall took title to the property pursuant to a deed in lieu of
foreclosure. The property generated positive cash flow in 1996 and prior to the
foreclosure in 1997. However, significant leasing costs were incurred in 1996
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 property in 1996 since
they were nonrecurring expenditures. Had these nonrecurring expenditures been
included, the property would have operated at a significant cash flow deficit
during 1996. The Partnership still owns the North Kent Outlot. During 1997 and
1996, the Glendale Fashion Center operated at a significant cash flow deficit.
<PAGE>
The Colony, Del Lago, Palm View, Pelican Pointe and Regency Club apartment
complexes, which were sold in 1996, generated positive cash flow prior to their
sale. In addition, the Perimeter 400 Center Office Building, the property in
which the Partnership held a minority joint venture interest, was sold in
December 1996 and generated positive cash flow prior to its sale. 

North Kent Mall is composed of two portions, a shopping center (the "Mall") and
the North Kent Outlot, a land parcel on which a theater is located, each of
which is collateralized by a mortgage loan from a different lender. The
Partnership and the holder (the "Lender") of the mortgage loan collateralized
by the Mall executed an agreement effective as of January 1, 1997, pursuant to
which the maturity date of the loan was extended to September 1, 1997.
According to the agreement, if the Partnership was unable to locate a purchaser
and consummate a sale of the Mall by September 1, 1997, title to the Mall would
be conveyed to the Lender pursuant to a deed in lieu of foreclosure. The
Partnership was unable to complete a sale of the Mall and on September 18, 1997
the deed in lieu of foreclosure was delivered to the Lender. The Partnership
has no further obligations under the loan and no further interest in the Mall.
The Partnership continues to own the North Kent Outlot. The North Kent Outlot
is collateralized by a mortgage loan of approximately $776,000 which matures in
2010. The Partnership is currently marketing the North Kent Outlot for sale.

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. In September 1997, the lender on North Kent Mall acquired the Mall
pursuant to a deed in lieu of foreclosure; however, the Partnership still owns
the North Kent Outlot, which it is currently marketing for sale. The
Partnership has entered into a contract to sell the Glendale Fashion Center for
$10,700,000. During 1996, the Partnership sold five properties and its minority
joint venture interest in one additional property. A majority of the proceeds
from the 1996 sales were distributed to Limited Partners in January and  April
1997. 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 and costs
stemming from litigation involving the Partnership including, but not limited
to, the lawsuit discussed in Note 8 of Notes to 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 continues to exist
or arises, reserves may be held by the Partnership for a longer period of time.

Pursuant to the sale agreement for the Regency Club Apartments, $250,000 of the
sale proceeds was retained by the Partnership and was unavailable for
distribution until January 1997, at which time the funds were released in full.
These proceeds were distributed to Limited Partners in October 1997.

Pursuant to the sale agreement for the Perimeter 400 Center Office Building,
which was owned by a joint venture consisting of the Partnership and three
affiliates, $1,750,000 of the sale proceeds was retained by the joint venture
and was unavailable for distribution until September 1997, at which time the
funds were released in full. The Partnership's share was $268,975. These
proceeds were distributed to Limited Partners in October 1997.
<PAGE>
In June 1997, the Partnership received $75,000 as a final payment related to an
October 1996 settlement with a former tenant at the 240 East Ontario Office
Building which was sold in 1993. The settlement relates to rental income owed
to the Partnership under the terms of the tenant's lease.

In February 1997, the General Partner made a settlement payment of $32,220
($.08 per Interest) to members of the class pursuant to the settlement approved
by the court in November 1996 in the Paul Williams and Beverly Kennedy, et.
al., v. Balcor Pension Investors, et. al. class action lawsuit. The General
Partner made a contribution of $35,801 to the Partnership, from which the
plaintiffs' counsel was paid $3,581 pursuant to the settlement agreement. Of
the settlement amount, $16,056 was paid to the original investors who held
their Limited Partnership Interests at the date of the settlement and was
recorded as a distribution to Limited Partners in the Financial Statements. The
remaining portion of the settlement of $16,164 was paid to original investors
who previously had sold their Interests in the Partnership. This amount was
recorded as an administrative expense in the Financial Statements. Similar
contributions and payments were made on the seven other partnerships included
in the lawsuit in addition to those payments described above. The Balcor
Company paid an additional $635,000 to the plaintiffs' class counsel and The
Balcor Company received approximately $946,000 from the eight partnerships as a
reimbursement of its legal expenses, of which $169,393 was the Partnership's
share. 

In October 1997, the Partnership paid a distribution of $859,212 ($2.00 per
Interest) to the holders of Limited Partnership Interests which represents a
special distribution of Mortgage Reductions primarily from the release of sale
holdbacks on the Regency Club Apartments and Perimeter 400 Center Office
Building. Including the October 1997 distribution, Limited Partners have
received cash distributions totaling $645.98 per $500 Interest. Of this amount,
$330.85 represents Cash Flow from operations and $315.13 represents a return of
Original Capital. Future distributions are expected to be made from available
sale proceeds from the Partnership's remaining real estate investments, as to
which there can be no assurances.

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.

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
--------------------------

Glendale Fashion Center
-----------------------

As previously reported, on October 10, 1996, the Partnership contracted to sell
the Glendale Fashion Center, Glendale, California, to an unaffiliated party,
Vestar Development Co., an Arizona corporation. The sale price is $10,700,000.
Pursuant to the agreement of sale, as amended, the purchaser has the option to
extend the scheduled closing date for 30 day periods through December 2, 1997
upon three business days' advance notice to the Partnership and the deposit of
additional earnest money. The purchaser has exercised its option to extend the
closing date to December 2, 1997 and has deposited additional earnest money for
a total of $1,250,000 of earnest money held in the escrow account.  

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

(a)(3) Exhibits:

(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) Material Contracts:

(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.

(b)(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.
<PAGE>
(c)(ii) First Amendment to Agreement of Purchase and Sale dated November 8,
1996 relating to the sale of Glendale Fashion Center, Glendale, California
previously filed as Exhibit (10)(c)(ii) to the Partnership's Report on Form
10-Q for the quarter ended September 30, 1996 is incorporated herein by
reference.

(c)(iii) Second Amendment to Agreement of Purchase and Sale relating to the
sale of Glendale Fashion Center, Glendale, California, previously filed as
Exhibit (10)(c)(iii) to the Partnership's Report on Form 10-K for the year
ended December 31, 1996 is incorporated herein by reference.

(c)(iv) Third Amendment to Agreement of Purchase and Sale relating to the sale
of Glendale Fashion Center, Glendale, California, previously filed as Exhibit
(10)(c)(iv) to the Partnership's Report on Form 10-K for the year ended
December 31, 1996 is incorporated herein by reference.

(c)(v) Fourth Amendment to Agreement of Purchase and Sale relating to the sale
of Glendale Fashion Center, Glendale, California, previously filed as Exhibit
(10)(c)(v) to the Partnership's Report on Form 10-K for the year ended December
31, 1996 is incorporated herein by reference.

(c)(vi) Fifth Amendment to Agreement of Purchase and Sale relating to the sale
of Glendale Fashion Center, Glendale, California, previously filed as Exhibit
(10)(c)(vi) to the Partnership's Report on Form 10-K for the year ended
December 31, 1996 is incorporated herein by reference.

(c)(vii) Sixth Amendment to Agreement of Purchase and Sale relating to the sale
of Glendale Fashion Center, Glendale, California, previously filed as Exhibit
(10)(c)(vii) to the Partnership's Report on Form 10-K for the year ended
December 31, 1996 is incorporated herein by reference.

(c)(viii) Seventh Amendment to Agreement of Purchase and Sale relating to the
sale of Glendale Fashion Center, Glendale, California, previously filed as
Exhibit (10)(c)(viii) to the Partnership's Report on Form 10-K for the year
ended December 31, 1996 is incorporated herein by reference.

(c)(ix) Eighth Amendment to Agreement of Purchase and Sale relating to the sale
of Glendale Fashion Center, Glendale, California, previously filed as Exhibit
(10)(c)(ix) to the Partnership's Report on Form 10-Q for the quarter ended
March 31, 1997 is incorporated herein by reference.

(c)(x) Extension Letter dated April 25, 1997 relating to the sale of Glendale
Fashion Center, Glendale, California, previously filed as Exhibit (10)(c)(x) to
the Partnership's Report on Form 10-Q for the quarter ended March 31, 1997 is
incorporated herein by reference.

(c)(xi) Ninth Amendment to Agreement of Sale relating to the sale of Glendale
Fashion Square, Glendale, California, previously filed as Exhibit (10)(c)(xi)
to the Partnership's Report on Form 10-Q for the quarter ended June 30, 1997 is
incorporated herein by reference.

(c)(xii) Extension Letter dated July 24, 1997 relating to the sale of Glendale
Fashion Center, Glendale, California, previously filed as Exhibit (10)(c)(xii)
to the Partnership's Report on Form 10-Q for the quarter ended June 30, 1997 is
incorporated herein by reference.
<PAGE>
(c)(xiii) Tenth Amendment to Agreement of Sale relating to the sale of Glendale
Fashion Center, Glendale, California, previously filed as Exhibit (99)(a) to
the Partnership's Report on Form 8-K dated September 18, 1997 is incorporated
herein by reference.

(c)(xiv) Extension Letter dated August 27, 1997 relating to the sale of
Glendale Fashion Center, Glendale, California, previously filed as Exhibit
(99)(b) to the Partnership's Report on Form 8-K dated September 18, 1997 is
incorporated herein by reference.

(c)(xv) Extension Letter dated September 23, 1997 relating to the sale of
Glendale Fashion Center, Glendale, California, previously filed as Exhibit
(99)(c) to the Partnership's Report on Form 8-K dated September 18, 1997 is
incorporated herein by reference.

(c)(xvi) Extension Letter dated October 22, 1997 relating to the sale of
Glendale Fashion Center, Glendale, California, is attached hereto.

(d) Agreement of Sale and attachment thereto relating to the sale of Perimeter
400 Center, Fulton County, Georgia, previously filed as Exhibit (2) to the
Partnership's Report on Form 8-K dated December 2, 1996, is incorporated herein
by reference.

(27) Financial Data Schedule of the Registrant for the nine months ended
September 30, 1997 is attached hereto.

(b) Reports on Form 8-K:  A Current Report on Form 8-K dated September 18, 1997
was filed reporting the deed in lieu of foreclosure on the North Kent Mall,
Grand Rapids, Michigan and the extension of the sale date relating to the
Glendale Fashion Center, Glendale, California.  
<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
                                  Managing Director and Chief Financial 
                                  Officer (Principal Accounting Officer) of 
                                  Balcor Mortgage Advisors-III, the General 
                                  Partner


Date: November 14, 1997
      -----------------
<PAGE>