SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC  20549

                                   FORM 8-K

                                CURRENT REPORT

                    PURSUANT TO SECTION 13 OR 15 (d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

        Date of Report (date of earliest event reported)  June 28, 1996

                     BALCOR REALTY INVESTORS 85 - SERIES I
                       A REAL ESTATE LIMITED PARTNERSHIP
         ------------------------------------------------------------
                           Exact Name of Registrant


Illinois                                0-14353
- ---------------------------             --------------------------
State or other jurisdiction             Commission file number

2355 Waukegan Road
Suite A200
Bannockburn, Illinois                   36-3244978
- ---------------------------             --------------------------
Address of principal                    I.R.S. Employer
executive offices                       Identification
                                        Number

60015
- ---------------------------
Zip Code


              Registrant's telephone number, including area code:
                                (847) 267-1600
<PAGE>
ITEM 2.  ACQUISITION OR DISPOSITION OF ASSETS
- ------------------------------------------------------------------------

Forestwood Apartments

In 1984, the Partnership acquired the Forestwood Apartments, East Baton Rouge
Parish, Louisiana, utilizing approximately $4,386,645 of offering proceeds.
The property was acquired subject to first mortgage financing of $7,823,000.
In 1987, the first mortgage loan was refinanced with a new approximately
$5,906,000 first mortgage loan from a third party.  In connection with the
refinancing, the Partnership made a $1,916,993 principal prepayment of the
mortgage loan.  The first mortgage loan was refinanced again in 1993 with a new
$5,900,000 first mortgage loan from a third party. 

On June 28, 1996, the Partnership contracted to sell the property for a sale
price of $10,558,000 to an unaffiliated party, BH TFL, Inc.  On or before July
23, 1996, upon completion of the purchaser's due diligence review, the
purchaser will deposit $105,580 into an escrow account as earnest money.  The
remaining portion of the sale price will be payable in cash at closing, which
is scheduled to occur on August 15, 1996.  From the proceeds of the sale, the
Partnership will pay the outstanding balance of the first mortgage loan which
is expected to have an outstanding principal balance of approximately
$5,762,400 at closing and  $211,160 to an unaffiliated party as a brokerage
commission.  An affiliate of the third party providing property management
services for the property will receive a fee for services rendered in
connection with the sale of the property of $105,580.  The Partnership will 
receive the remaining proceeds of approximately $4,478,860, less closing costs.
Neither the General Partner nor any affiliate will receive a brokerage 
commission in connection with the sale of the property.  The General Partner 
will be reimbursed by the Partnership for actual expenses incurred in 
connection with the sale.

Affiliates of the General Partner have simultaneously contracted to sell 5
other properties to the purchaser.

The closing is subject to the satisfaction of numerous terms and conditions.
There can be no assurance that all of the terms and conditions will be complied
with and, therefore, it is possible the sale of the property may not occur.
<PAGE>
ITEM 5. OTHER INFORMATION
- ------------------------------------------

Forest Ridge Apartments, Phase I  

As previously reported, on April 23, 1996, the Partnership contracted to sell
Forest Ridge Apartments, Phase I, Dallas, Texas, to an unaffiliated party, ERP
Operating Limited Partnership, an Illinois limited partnership, for a sale 
price of $11,600,000.  The sale closed on June 7, 1996.  From the proceeds of
the sale, the Partnership repaid the outstanding balance of the first mortgage
loan of $7,589,194, legal fees of approximately $15,000 and a fee of $116,000
to an affiliate of the third party providing property management services for
the property for services rendered in connection with the sale.  The 
Partnership received approximately $3,880,000 representing the remaining 
proceeds.  Of such amount, $500,000 is being retained by the Partnership and
will not be available for use or distribution by the Partnership until 120 days
after closing.


ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS
- ----------------------------------------------------------------------

     (a)  FINANCIAL STATEMENTS AND EXHIBITS:

            None

     (B)  PRO FORMA FINANCIAL INFORMATION:

             None

     (C)  EXHIBITS:

          (2)  (a) Agreement of Sale and attachment thereto relating to the
                   sale of Forestwood Apartments, East Baton Rouge
                   Parish, Louisiana.

               (b) Amendment to Agreement of Sale and Escrow Agreement
                   relating to the sale of Forestwood Apartments, East Baton
                   Rouge, Louisiana.

          (99) (a) Master Amendment and Agreement dated May 22, 1996
                   relating to the sale of Forest Ridge Apartments, Phase I, 
                   Dallas, Texas.

               (b) Master Amendment and Agreement #2 dated May 22, 1996
                   relating to the sale of Forest Ridge Apartments, Phase I,
                   Dallas, Texas. 

     No information is required under Items 1, 3, 4, 6 and 8 and these items
have, therefore, been omitted.
<PAGE>
Signature
- -------------

     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 hereunto duly authorized.


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

                         By:  Balcor Partners-XVI, an Illinois
                                 general partnership, its general
                                 partner

                         By:  RGF-Balcor Associates-II, an Illinois
                                 general partnership, a partner

                         By:  The Balcor Company,
                                 a Delaware corporation,
                                 a partner

                         By:  /s/Jerry M. Ogle
                            ------------------------------------
                                 Jerry M. Ogle, Vice President 
                                 and Secretary
Dated:  July 12, 1996
<PAGE>
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{"company-data": {"conformed-name": "BALCOR REALTY INVESTORS 85 SERIES I", "cik": "0000751341", "assigned-sic": "6500", "irs-number": "363244978", "state-of-incorporation": "IL", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "002-92777", "film-number": "96594164"}, "business-address": {"street1": "4849 GOLF RD", "street2": "BALCOR PLZ", "city": "SKOKIE", "state": "IL", "zip": "60077", "phone": "7086772900"}, "mail-address": {"street1": "4849 GOLF ROAD", "city": "SKOKIE", "state": "IL", "zip": "60077"}}
SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC  20549

                                   FORM 8-K

                                CURRENT REPORT

                    PURSUANT TO SECTION 13 OR 15 (d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

        Date of Report (date of earliest event reported)  June 28, 1996

                     BALCOR REALTY INVESTORS 85 - SERIES I
                       A REAL ESTATE LIMITED PARTNERSHIP
         ------------------------------------------------------------
                           Exact Name of Registrant

Illinois                                0-14353
- ---------------------------             --------------------------
State or other jurisdiction             Commission file number

2355 Waukegan Road
Suite A200
Bannockburn, Illinois                   36-3244978
- ---------------------------             --------------------------
Address of principal                    I.R.S. Employer
executive offices                       Identification
                                        Number

60015
- ---------------------------
Zip Code

              Registrant's telephone number, including area code:
                                (847) 267-1600
ITEM 2.  ACQUISITION OR DISPOSITION OF ASSETS
- ------------------------------------------------------------------------

Forestwood Apartments

In 1984, the Partnership acquired the Forestwood Apartments, East Baton Rouge
Parish, Louisiana, utilizing approximately $4,386,645 of offering proceeds.
The property was acquired subject to first mortgage financing of $7,823,000.
In 1987, the first mortgage loan was refinanced with a new approximately
$5,906,000 first mortgage loan from a third party.  In connection with the
refinancing, the Partnership made a $1,916,993 principal prepayment of the
mortgage loan.  The first mortgage loan was refinanced again in 1993 with a new
$5,900,000 first mortgage loan from a third party. 

On June 28, 1996, the Partnership contracted to sell the property for a sale
price of $10,558,000 to an unaffiliated party, BH TFL, Inc.  On or before July
23, 1996, upon completion of the purchaser's due diligence review, the
purchaser will deposit $105,580 into an escrow account as earnest money.  The
remaining portion of the sale price will be payable in cash at closing, which
is scheduled to occur on August 15, 1996.  From the proceeds of the sale, the
Partnership will pay the outstanding balance of the first mortgage loan which
is expected to have an outstanding principal balance of approximately
$5,762,400 at closing and  $211,160 to an unaffiliated party as a brokerage
commission.  An affiliate of the third party providing property management
services for the property will receive a fee for services rendered in
connection with the sale of the property of $105,580.  The Partnership will 
receive the remaining proceeds of approximately $4,478,860, less closing costs.
Neither the General Partner nor any affiliate will receive a brokerage 
commission in connection with the sale of the property.  The General Partner 
will be reimbursed by the Partnership for actual expenses incurred in 
connection with the sale.

Affiliates of the General Partner have simultaneously contracted to sell 5
other properties to the purchaser.

The closing is subject to the satisfaction of numerous terms and conditions.
There can be no assurance that all of the terms and conditions will be complied
with and, therefore, it is possible the sale of the property may not occur.
ITEM 5. OTHER INFORMATION
- ------------------------------------------

Forest Ridge Apartments, Phase I  

As previously reported, on April 23, 1996, the Partnership contracted to sell
Forest Ridge Apartments, Phase I, Dallas, Texas, to an unaffiliated party, ERP
Operating Limited Partnership, an Illinois limited partnership, for a sale 
price of $11,600,000.  The sale closed on June 7, 1996.  From the proceeds of
the sale, the Partnership repaid the outstanding balance of the first mortgage
loan of $7,589,194, legal fees of approximately $15,000 and a fee of $116,000
to an affiliate of the third party providing property management services for
the property for services rendered in connection with the sale.  The 
Partnership received approximately $3,880,000 representing the remaining 
proceeds.  Of such amount, $500,000 is being retained by the Partnership and
will not be available for use or distribution by the Partnership until 120 days
after closing.

ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS
- ----------------------------------------------------------------------

     (a)  FINANCIAL STATEMENTS AND EXHIBITS:

            None

     (B)  PRO FORMA FINANCIAL INFORMATION:

             None

     (C)  EXHIBITS:

          (2)  (a) Agreement of Sale and attachment thereto relating to the
                   sale of Forestwood Apartments, East Baton Rouge
                   Parish, Louisiana.

               (b) Amendment to Agreement of Sale and Escrow Agreement
                   relating to the sale of Forestwood Apartments, East Baton
                   Rouge, Louisiana.

          (99) (a) Master Amendment and Agreement dated May 22, 1996
                   relating to the sale of Forest Ridge Apartments, Phase I, 
                   Dallas, Texas.

               (b) Master Amendment and Agreement #2 dated May 22, 1996
                   relating to the sale of Forest Ridge Apartments, Phase I,
                   Dallas, Texas. 

     No information is required under Items 1, 3, 4, 6 and 8 and these items
have, therefore, been omitted.
Signature
- -------------

     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 hereunto duly authorized.

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

                         By:  Balcor Partners-XVI, an Illinois
                                 general partnership, its general
                                 partner

                         By:  RGF-Balcor Associates-II, an Illinois
                                 general partnership, a partner

                         By:  The Balcor Company,
                                 a Delaware corporation,
                                 a partner

                         By:  /s/Jerry M. Ogle
                            ------------------------------------
                                 Jerry M. Ogle, Vice President 
                                 and Secretary
Dated:  July 12, 1996