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)  July 15, 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
- ------------------------------------------------------------------------
a)  Marbrisa Apartments

In 1985, Marbrisa Apartments, Hillsborough County, Florida, was acquired by a
joint venture (the "Joint Venture") in which the Partnership was general
partner and an affiliate of the seller of the property (the "JV Partner") was
the limited partner.  The Partnership and the JV Partner held interests in the
Joint Venture of 85% and 15%, respectively.  The Partnership contributed
approximately $3,789,000 towards the purchase of the property.  In 1986, the
seller defaulted on certain of its obligations under its management agreement
with the Partnership.  Pursuant to a settlement agreement, the JV Partner
assigned its interest in the Joint Venture to the Partnership.  

The property was acquired subject to first mortgage financing of approximately
$6,695,000.  The mortgage loan was refinanced in 1988 with a new loan in the
amount of $5,700,000.  The Partnership borrowed approximately $1,200,000 from
the General Partner in connection with the refinancing.  In 1993, the mortgage
loan was again refinanced with a new mortgage loan in the amount of $5,500,000.

On July 15, 1996, the Joint Venture contracted to sell the property for a sale
price of $8,100,000 to an unaffiliated party, ERP Operating Limited
Partnership, an Illinois limited partnership.  The purchaser has deposited
$300,000 into an escrow account as earnest money and is required to deposit an
additional $200,000 on or before August 19, 1996.  The purchaser expects to
assume the existing first mortgage loan which is expected to have an
outstanding principal balance of approximately $5,375,000 at closing, scheduled
for August 30, 1996.  The remainder of the purchase price will be payable in
cash at closing.  From the proceeds of the sale, the Joint Venture will pay
$182,250 to a third party as a brokerage commission.  An affiliate of the third
party providing property management services for the property will receive a
fee of $81,000 for services rendered in connection with the sale of the
property.  The Joint Venture will receive the remaining proceeds of
approximately $2,461,750, less closing costs.  Of such proceeds, an amount not
to exceed $500,000 will be retained by the Partnership and will not be
available for use or distribution by the Partnership until 120 days after the
closing.  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 Joint Venture for its actual expenses
incurred in connection with the sale.

The Partnership has simultaneously contracted to sell Steeplechase Apartments
to the purchaser, as described elsewhere in this report, and the Partnership
has recently sold or contracted to sell to the purchaser three other properties
which it owns or in which it has a joint venture interest.  In addition,
affiliates of the General Partner have recently sold or contracted to sell 21
other properties to the purchaser.  

The closing is subject to the satisfaction of numerous terms and conditions,
including the consent of the lender.  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>
b) Steeplechase Apartments

In 1985, the Partnership acquired the Steeplechase Apartments,
Lexington-Fayette, Kentucky, utilizing $4,474,205 of Partnership proceeds.  The
property was acquired subject to first mortgage financing of approximately
$7,975,000.  In 1987, the mortgage loan was refinanced with a new mortgage loan
in the amount of $6,400,000.  In connection with the refinancing, the
Partnership made a principal repayment of approximately $1,680,000, which was
funded by a loan from the General Partner.   The mortgage loan was refinanced
again in 1993 with a new mortgage loan in the amount of $7,450,000.  The
Partnership received excess proceeds of approximately $1,200,000.

On July 15, 1996, the Partnership contracted to sell the property for a sale
price of $11,500,000 to an unaffiliated party, ERP Operating Limited
Partnership, an Illinois limited partnership. The purchaser has deposited
$300,000 into an escrow account as earnest money. The remainder of the sale
price will be payable in cash at closing, scheduled for August 30, 1996.  From
the proceeds of the sale, the Partnership will pay the outstanding balance of
the first mortgage loan which is expected to be approximately $7,281,000 at
closing and $172,000 as a brokerage commission to an affiliate of the third
party providing property management services for the property.  The Partnership
will receive the remaining proceeds of approximately $4,047,000, less closing
costs. Of such proceeds, an amount not to exceed $500,000 will be retained by
the Partnership and will not be available for use or distribution by the
Partnership until 120 days after the closing.  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
its actual expenses incurred in connection with the sale.

The Partnership has simultaneously contracted to sell Marbrisa Apartments to
the purchaser, as described elsewhere in this report, and the Partnership has
recently sold or contracted to sell to the purchaser three other properties
which it owns or in which it has a joint venture interest.  In addition,
affiliates of the General Partner have recently sold or contracted to sell 21
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. ADDITIONAL INFORMATION
- ---------------------------------------------------

Hunter's Glen Apartments

As previously reported, on June 30, 1996, the Partnership contracted to sell
the Hunter's Glen Apartments, St. Louis County, Missouri, to ERP Operating
Limited Partnership, an Illinois limited partnership, for a sale price of
$9,100,000.  The Partnership and the purchaser have agreed to extend the
closing date of the sale from August 1, 1996 to August 15, 1996.
<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 letter agreements thereto relating to 
                   the sale of  the Marbrisa apartment complex, Hillsborough 
                   County, Florida.
                    
               (b) Agreement of Sale and letter agreement thereto relating 
                   to the sale of the Steeplechase apartment complex, 
                   Lexington-Fayette, Kentucky.

          (99) Letter Agreement relating to the sale of the Hunter's Glen
               apartment complex, St. Louis County, Missouri.

                   
     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 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:  July 29, 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)  July 15, 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
- ------------------------------------------------------------------------
a)  Marbrisa Apartments

In 1985, Marbrisa Apartments, Hillsborough County, Florida, was acquired by a
joint venture (the "Joint Venture") in which the Partnership was general
partner and an affiliate of the seller of the property (the "JV Partner") was
the limited partner.  The Partnership and the JV Partner held interests in the
Joint Venture of 85% and 15%, respectively.  The Partnership contributed
approximately $3,789,000 towards the purchase of the property.  In 1986, the
seller defaulted on certain of its obligations under its management agreement
with the Partnership.  Pursuant to a settlement agreement, the JV Partner
assigned its interest in the Joint Venture to the Partnership.  

The property was acquired subject to first mortgage financing of approximately
$6,695,000.  The mortgage loan was refinanced in 1988 with a new loan in the
amount of $5,700,000.  The Partnership borrowed approximately $1,200,000 from
the General Partner in connection with the refinancing.  In 1993, the mortgage
loan was again refinanced with a new mortgage loan in the amount of $5,500,000.

On July 15, 1996, the Joint Venture contracted to sell the property for a sale
price of $8,100,000 to an unaffiliated party, ERP Operating Limited
Partnership, an Illinois limited partnership.  The purchaser has deposited
$300,000 into an escrow account as earnest money and is required to deposit an
additional $200,000 on or before August 19, 1996.  The purchaser expects to
assume the existing first mortgage loan which is expected to have an
outstanding principal balance of approximately $5,375,000 at closing, scheduled
for August 30, 1996.  The remainder of the purchase price will be payable in
cash at closing.  From the proceeds of the sale, the Joint Venture will pay
$182,250 to a third party as a brokerage commission.  An affiliate of the third
party providing property management services for the property will receive a
fee of $81,000 for services rendered in connection with the sale of the
property.  The Joint Venture will receive the remaining proceeds of
approximately $2,461,750, less closing costs.  Of such proceeds, an amount not
to exceed $500,000 will be retained by the Partnership and will not be
available for use or distribution by the Partnership until 120 days after the
closing.  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 Joint Venture for its actual expenses
incurred in connection with the sale.

The Partnership has simultaneously contracted to sell Steeplechase Apartments
to the purchaser, as described elsewhere in this report, and the Partnership
has recently sold or contracted to sell to the purchaser three other properties
which it owns or in which it has a joint venture interest.  In addition,
affiliates of the General Partner have recently sold or contracted to sell 21
other properties to the purchaser.  

The closing is subject to the satisfaction of numerous terms and conditions,
including the consent of the lender.  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.
b) Steeplechase Apartments

In 1985, the Partnership acquired the Steeplechase Apartments,
Lexington-Fayette, Kentucky, utilizing $4,474,205 of Partnership proceeds.  The
property was acquired subject to first mortgage financing of approximately
$7,975,000.  In 1987, the mortgage loan was refinanced with a new mortgage loan
in the amount of $6,400,000.  In connection with the refinancing, the
Partnership made a principal repayment of approximately $1,680,000, which was
funded by a loan from the General Partner.   The mortgage loan was refinanced
again in 1993 with a new mortgage loan in the amount of $7,450,000.  The
Partnership received excess proceeds of approximately $1,200,000.

On July 15, 1996, the Partnership contracted to sell the property for a sale
price of $11,500,000 to an unaffiliated party, ERP Operating Limited
Partnership, an Illinois limited partnership. The purchaser has deposited
$300,000 into an escrow account as earnest money. The remainder of the sale
price will be payable in cash at closing, scheduled for August 30, 1996.  From
the proceeds of the sale, the Partnership will pay the outstanding balance of
the first mortgage loan which is expected to be approximately $7,281,000 at
closing and $172,000 as a brokerage commission to an affiliate of the third
party providing property management services for the property.  The Partnership
will receive the remaining proceeds of approximately $4,047,000, less closing
costs. Of such proceeds, an amount not to exceed $500,000 will be retained by
the Partnership and will not be available for use or distribution by the
Partnership until 120 days after the closing.  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
its actual expenses incurred in connection with the sale.

The Partnership has simultaneously contracted to sell Marbrisa Apartments to
the purchaser, as described elsewhere in this report, and the Partnership has
recently sold or contracted to sell to the purchaser three other properties
which it owns or in which it has a joint venture interest.  In addition,
affiliates of the General Partner have recently sold or contracted to sell 21
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. ADDITIONAL INFORMATION
- ---------------------------------------------------

Hunter's Glen Apartments

As previously reported, on June 30, 1996, the Partnership contracted to sell
the Hunter's Glen Apartments, St. Louis County, Missouri, to ERP Operating
Limited Partnership, an Illinois limited partnership, for a sale price of
$9,100,000.  The Partnership and the purchaser have agreed to extend the
closing date of the sale from August 1, 1996 to August 15, 1996.
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 letter agreements thereto relating to 
                   the sale of  the Marbrisa apartment complex, Hillsborough 
                   County, Florida.
                    
               (b) Agreement of Sale and letter agreement thereto relating 
                   to the sale of the Steeplechase apartment complex, 
                   Lexington-Fayette, Kentucky.

          (99) Letter Agreement relating to the sale of the Hunter's Glen
               apartment complex, St. Louis County, Missouri.

                   
     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 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:  July 29, 1996