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)  September 16, 1996

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


Illinois                                0-14351
- -----------------------------------     -----------------------------------
State or other jurisdiction             Commission file number

2355 Waukegan Road
Suite A200
Bannockburn, Illinois                   36-3327917
- -----------------------------------     -----------------------------------
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
- ------------------------------------------------------------------------

Park Crossing Apartments

In 1984, the  Partnership acquired Park  Crossing Apartments, Gwinnett  County,
Georgia, utilizing approximately $5,556,000 of offering proceeds.  The property
was acquired subject to first mortgage  financing of $9,683,000.  In 1988,  the
property  was  refinanced  with  a  $7,815,000  first  mortgage  loan  from  an
unaffiliated party. The  General Partner loaned  the Partnership $2,340,000  in
order to complete  the refinancing.    In 1992,  the Partnership used  proceeds
from the release of a $728,000 cash collateral pledge to pay down a portion  of
the principal balance  of the  first mortgage loan.   The  loan was  refinanced
again in 1993 with a $7,341,121 first mortgage loan from an unaffiliated party.
The Partnership received $217,000 of excess refinancing proceeds.

On September 16, 1996,  the Partnership contracted to  sell the property for  a
sale price of $11,350,000  to an unaffiliated party,  EEA Development, Inc.,  a
Delaware corporation.   The  purchaser has  deposited $250,000  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 November 7,  1996.
From the  proceeds of  the sale,  the Partnership  will repay  the  outstanding
principal  balance  of  the  first  mortgage  loan  which  is  expected  to  be
approximately $7,138,000 at closing and $170,250 to an unaffiliated party as  a
brokerage commission. The  Partnership will receive  the remaining proceeds  of
approximately $4,042,000, 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.

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 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 Park Crossing Apartments, Gwinnett County, Georgia.
 
               (b)  First Amendment to  Agreement of Sale  relating to the
                    sale of Park Crossing Apartments, Gwinnett County, Georgia.

               (c)  Letter relating to the sale of Park Crossing Apartments,
                    Gwintett County, Georgia.


     No information is required under Items 1, 3, 4, 5, 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 II
                    A REAL ESTATE LIMITED PARTNERSHIP

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

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

                         By:  /s/  Jerry M. Ogle
                                ------------------------------------
                                   Jerry M. Ogle, Vice President 
                                   and Secretary

Dated:  September 30, 1996
<PAGE>
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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)  September 16, 1996

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

Illinois                                0-14351
- -----------------------------------     -----------------------------------
State or other jurisdiction             Commission file number

2355 Waukegan Road
Suite A200
Bannockburn, Illinois                   36-3327917
- -----------------------------------     -----------------------------------
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
- ------------------------------------------------------------------------

Park Crossing Apartments

In 1984, the  Partnership acquired Park  Crossing Apartments, Gwinnett  County,
Georgia, utilizing approximately $5,556,000 of offering proceeds.  The property
was acquired subject to first mortgage  financing of $9,683,000.  In 1988,  the
property  was  refinanced  with  a  $7,815,000  first  mortgage  loan  from  an
unaffiliated party. The  General Partner loaned  the Partnership $2,340,000  in
order to complete  the refinancing.    In 1992,  the Partnership used  proceeds
from the release of a $728,000 cash collateral pledge to pay down a portion  of
the principal balance  of the  first mortgage loan.   The  loan was  refinanced
again in 1993 with a $7,341,121 first mortgage loan from an unaffiliated party.
The Partnership received $217,000 of excess refinancing proceeds.

On September 16, 1996,  the Partnership contracted to  sell the property for  a
sale price of $11,350,000  to an unaffiliated party,  EEA Development, Inc.,  a
Delaware corporation.   The  purchaser has  deposited $250,000  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 November 7,  1996.
From the  proceeds of  the sale,  the Partnership  will repay  the  outstanding
principal  balance  of  the  first  mortgage  loan  which  is  expected  to  be
approximately $7,138,000 at closing and $170,250 to an unaffiliated party as  a
brokerage commission. The  Partnership will receive  the remaining proceeds  of
approximately $4,042,000, 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.

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 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 Park Crossing Apartments, Gwinnett County, Georgia.
 
               (b)  First Amendment to  Agreement of Sale  relating to the
                    sale of Park Crossing Apartments, Gwinnett County, Georgia.

               (c)  Letter relating to the sale of Park Crossing Apartments,
                    Gwintett County, Georgia.

     No information is required under Items 1, 3, 4, 5, 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 II
                    A REAL ESTATE LIMITED PARTNERSHIP

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

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

                         By:  /s/  Jerry M. Ogle
                                ------------------------------------
                                   Jerry M. Ogle, Vice President 
                                   and Secretary

Dated:  September 30, 1996