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)  August 8, 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
- ----------------------------------------------------------------------

a)  Boulder Springs Apartments
 
In 1984, the Partnership acquired the Boulder Springs Apartments, Chesterfield
County, Virginia, utilizing approximately $4,943,220 in offering proceeds.  The
property was acquired subject to first mortgage financing of approximately
$8,200,000. In 1995, the mortgage loan was refinanced with a new mortgage loan
in the amount of $8,140,000. 

On August 8, 1996, the Partnership contracted to sell the property for a sale
price of $15,600,000 to an unaffiliated party, Avalon Properties, Inc., a
Maryland corporation.  The purchaser has deposited $250,000 into an escrow
account as earnest money and will pay the remaining $15,350,000 in cash at
closing, expected to be September 24, 1996.  From the proceeds of the sale, the
Partnership will repay the outstanding balance of the first mortgage loan,
which is expected to be approximately $8,047,000 at closing, and $312,000 to a
third party as a brokerage commission.  The purchaser will pay all penalties
associated with the prepayment of the loan.  The Partnership will also pay a
fee of $117,000 to an affiliate of the third party providing property
management services for the property for services rendered in connection with
the sale and will receive the remaining proceeds of approximately $7,124,000,
less closing costs.  Of the net sale proceeds, $500,000 will be retained by the
Partnership and will not be available for use or distribution by the
Partnership until 270 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
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.

b)  Timberlake Apartments, Phase I

In 1983, the Partnership acquired the Timberlake Apartments, Phase I, Altamonte
Springs, Florida, utilizing approximately $7,372,085 in offering proceeds.  The
property was acquired subject to first mortgage financing of approximately
$13,778,000. In 1987, the mortgage loan was refinanced with a new mortgage loan
in the amount of approximately $12,700,000.  In 1993, the mortgage loan was
refinanced again with a new mortgage loan in the amount of $11,700,000.  The
Partnership contributed a total of approximately $1,591,000 from its funds
towards the two refinancings.

On August 8, 1996 the Partnership contracted to sell the property for a sale
price of  $18,234,637 to an unaffiliated party, TGM Realty Corp. #5, a Delaware
corporation.  The purchaser has deposited $150,000 into an escrow account as
earnest money and will pay the remaining $18,084,637 in cash at closing, which
is scheduled for September 30, 1996.  From the proceeds of the sale, the
Partnership will repay the outstanding balance of the first mortgage loan,
which is expected to be approximately $11,377,000  at closing, and $182,346 to
<PAGE>
a third 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 $136,760.  The
Partnership will receive the remaining proceeds of approximately $6,539,000,
less closing costs.  Of the net sale proceeds, $250,000 will be retained by the
Partnership and will not be available for use or distribution by the
Partnership until 90 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
actual expenses incurred in connection with the sale.

An affiliate of the General Partner has simultaneously contracted to sell Phase
II of Timberlake Apartments to the purchaser.  In the event that the agreement
of sale for either phase is terminated, the agreement of sale for the other
phase will be deemed terminated.  Affiliates of the General Partner have
recently sold or contracted to sell 6 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 EVENTS
- -----------------------------------------------------

a)  Heather Ridge Apartments 

In 1983, the Partnership acquired the Heather Ridge Apartments, Oklahoma City,
Oklahoma, utilizing approximately $7,048,000 in offering proceeds.  The
property was acquired subject to first mortgage financing of approximately
$9,803,000. In 1989, the mortgage loan was repaid from Partnership funds in the
amount of $4,750,000, representing a discount of approximately $5,801,000, and
subsequently, a new first mortgage loan was obtained in the amount of
$3,822,000.  In 1994, the mortgage loan was refinanced again with a new
mortgage loan in the amount of $5,200,000.  The Partnership received
approximately $1,200,000 in excess refinancing proceeds.

On August 19, 1996 the Partnership contracted to sell the property for a sale
price of  $9,050,000 to an unaffiliated party, Fowlershore & Flanagan, a
California general partnership.  The purchaser has deposited $100,000 into an
escrow account as earnest money and will pay the remaining $8,950,000 in cash
at closing, scheduled for 15 days after the date the purchaser obtains a
financing commitment, which the purchaser has until September 20, 1996 to
obtain.  From the proceeds of the sale, the Partnership will repay the
outstanding balance of the first mortgage loan, which is expected to be
approximately $5,118,000 at closing, and $203,625 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 for services rendered
in connection with the sale of the property of $90,500.  The Partnership will
receive the remaining proceeds of approximately $3,638,000, 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.
<PAGE>
An affiliate of the General Partner has simultaneously contracted to sell an
adjacent property 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.

(b)  Forestwood Apartments

As previously reported, on June 28, 1996, the Partnership contracted to sell
Forestwood Apartments, East Baton Rouge, Louisiana, to an unaffiliated party,
BH TFL, Inc., for a sale price of $10,558,000.  On August 16, 1996, the 
purchaser exercised its option to terminate the agreement of sale and a 
closing of the sale will not occur.  


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

     (a)  FINANCIAL STATEMENTS AND EXHIBITS:

            None

     (B)  PRO FORMA FINANCIAL INFORMATION:

             None

     (C)  EXHIBITS:

          (2)  (a)  (i)  Agreement of Sale and attachment thereto relating
                         to the sale of  Boulder Springs Apartments, 
                         Chesterfield County, Virginia.

                    (ii) Letter dated August 19, 1996 relating to the sale of
                         Boulder Springs Apartments, Chesterfield County,
                         Virginia.

               (b)  Agreement of Sale and attachment thereto relating
                    to the sale of Timberlake Apartments, Phase I,
                    Altamonte Springs, Florida.

          (99) (a)  Agreement of Sale and attachment thereto relating
                    to the sale of Heather Ridge Apartments, Oklahoma
                    City, Oklahoma.

               (b)  Letter of Termination relating to the sale of Forestwood 
                    Apartments, East Baton Rouge Parish, Louisiana.

     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:  August 23, 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)  August 8, 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
- ----------------------------------------------------------------------

a)  Boulder Springs Apartments
 
In 1984, the Partnership acquired the Boulder Springs Apartments, Chesterfield
County, Virginia, utilizing approximately $4,943,220 in offering proceeds.  The
property was acquired subject to first mortgage financing of approximately
$8,200,000. In 1995, the mortgage loan was refinanced with a new mortgage loan
in the amount of $8,140,000. 

On August 8, 1996, the Partnership contracted to sell the property for a sale
price of $15,600,000 to an unaffiliated party, Avalon Properties, Inc., a
Maryland corporation.  The purchaser has deposited $250,000 into an escrow
account as earnest money and will pay the remaining $15,350,000 in cash at
closing, expected to be September 24, 1996.  From the proceeds of the sale, the
Partnership will repay the outstanding balance of the first mortgage loan,
which is expected to be approximately $8,047,000 at closing, and $312,000 to a
third party as a brokerage commission.  The purchaser will pay all penalties
associated with the prepayment of the loan.  The Partnership will also pay a
fee of $117,000 to an affiliate of the third party providing property
management services for the property for services rendered in connection with
the sale and will receive the remaining proceeds of approximately $7,124,000,
less closing costs.  Of the net sale proceeds, $500,000 will be retained by the
Partnership and will not be available for use or distribution by the
Partnership until 270 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
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.

b)  Timberlake Apartments, Phase I

In 1983, the Partnership acquired the Timberlake Apartments, Phase I, Altamonte
Springs, Florida, utilizing approximately $7,372,085 in offering proceeds.  The
property was acquired subject to first mortgage financing of approximately
$13,778,000. In 1987, the mortgage loan was refinanced with a new mortgage loan
in the amount of approximately $12,700,000.  In 1993, the mortgage loan was
refinanced again with a new mortgage loan in the amount of $11,700,000.  The
Partnership contributed a total of approximately $1,591,000 from its funds
towards the two refinancings.

On August 8, 1996 the Partnership contracted to sell the property for a sale
price of  $18,234,637 to an unaffiliated party, TGM Realty Corp. #5, a Delaware
corporation.  The purchaser has deposited $150,000 into an escrow account as
earnest money and will pay the remaining $18,084,637 in cash at closing, which
is scheduled for September 30, 1996.  From the proceeds of the sale, the
Partnership will repay the outstanding balance of the first mortgage loan,
which is expected to be approximately $11,377,000  at closing, and $182,346 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 for
services rendered in connection with the sale of the property of $136,760.  The
Partnership will receive the remaining proceeds of approximately $6,539,000,
less closing costs.  Of the net sale proceeds, $250,000 will be retained by the
Partnership and will not be available for use or distribution by the
Partnership until 90 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
actual expenses incurred in connection with the sale.

An affiliate of the General Partner has simultaneously contracted to sell Phase
II of Timberlake Apartments to the purchaser.  In the event that the agreement
of sale for either phase is terminated, the agreement of sale for the other
phase will be deemed terminated.  Affiliates of the General Partner have
recently sold or contracted to sell 6 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 EVENTS
- -----------------------------------------------------

a)  Heather Ridge Apartments 

In 1983, the Partnership acquired the Heather Ridge Apartments, Oklahoma City,
Oklahoma, utilizing approximately $7,048,000 in offering proceeds.  The
property was acquired subject to first mortgage financing of approximately
$9,803,000. In 1989, the mortgage loan was repaid from Partnership funds in the
amount of $4,750,000, representing a discount of approximately $5,801,000, and
subsequently, a new first mortgage loan was obtained in the amount of
$3,822,000.  In 1994, the mortgage loan was refinanced again with a new
mortgage loan in the amount of $5,200,000.  The Partnership received
approximately $1,200,000 in excess refinancing proceeds.

On August 19, 1996 the Partnership contracted to sell the property for a sale
price of  $9,050,000 to an unaffiliated party, Fowlershore & Flanagan, a
California general partnership.  The purchaser has deposited $100,000 into an
escrow account as earnest money and will pay the remaining $8,950,000 in cash
at closing, scheduled for 15 days after the date the purchaser obtains a
financing commitment, which the purchaser has until September 20, 1996 to
obtain.  From the proceeds of the sale, the Partnership will repay the
outstanding balance of the first mortgage loan, which is expected to be
approximately $5,118,000 at closing, and $203,625 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 for services rendered
in connection with the sale of the property of $90,500.  The Partnership will
receive the remaining proceeds of approximately $3,638,000, 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.
An affiliate of the General Partner has simultaneously contracted to sell an
adjacent property 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.

(b)  Forestwood Apartments

As previously reported, on June 28, 1996, the Partnership contracted to sell
Forestwood Apartments, East Baton Rouge, Louisiana, to an unaffiliated party,
BH TFL, Inc., for a sale price of $10,558,000.  On August 16, 1996, the 
purchaser exercised its option to terminate the agreement of sale and a 
closing of the sale will not occur.  

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

     (a)  FINANCIAL STATEMENTS AND EXHIBITS:

            None

     (B)  PRO FORMA FINANCIAL INFORMATION:

             None

     (C)  EXHIBITS:

          (2)  (a)  (i)  Agreement of Sale and attachment thereto relating
                         to the sale of  Boulder Springs Apartments, 
                         Chesterfield County, Virginia.

                    (ii) Letter dated August 19, 1996 relating to the sale of
                         Boulder Springs Apartments, Chesterfield County,
                         Virginia.

               (b)  Agreement of Sale and attachment thereto relating
                    to the sale of Timberlake Apartments, Phase I,
                    Altamonte Springs, Florida.

          (99) (a)  Agreement of Sale and attachment thereto relating
                    to the sale of Heather Ridge Apartments, Oklahoma
                    City, Oklahoma.

               (b)  Letter of Termination relating to the sale of Forestwood 
                    Apartments, East Baton Rouge Parish, Louisiana.

     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:  August 23, 1996