FORM 10-Q
[ 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
Commission file number 0-14438
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
A CALIFORNIA LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
CALIFORNIA 13-3239107
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
411 West Putnam Avenue, Greenwich, CT 06830
(Address of principal executive offices)
(203) 862-7444
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check 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>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - SEPTEMBER 30, 1997
INDEX
Part I. Financial Information:
Balance Sheets - September 30, 1997 and December 31, 1996
Statements of Operations -- Three and Nine Months Ended
September 30, 1997 and 1996
Statement of Partners' Equity -- Nine Months Ended
September 30, 1997
Statements of Cash Flows -- Nine Months Ended
September 30, 1997 and 1996
Notes to Financial Statements
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Part II. Other Information:
Legal Proceedings, Exhibits and Reports on Form 8-K
<PAGE>
<TABLE>
<CAPTION>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - SEPTEMBER 30, 1997
BALANCE SHEETS
September 30, December 31,
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
Real estate ................................ $32,064,436 $32,154,253
Cash and cash equivalents .................. 5,524,704 4,870,517
Other assets ............................... 2,165,531 2,107,211
Receivables ................................ 291,813 158,204
----------- -----------
$40,046,484 $39,290,185
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Accounts payable and accrued expenses ...... $ 1,540,421 $ 1,061,732
Distributions payable ...................... 395,799 252,638
Due to affiliates .......................... 280,185 1,164,121
----------- -----------
2,216,405 2,478,491
----------- -----------
Commitments and contingencies
PARTNERS' EQUITY:
Limited partners' equity (400,010
units issued and outstanding) ..... 35,937,623 34,970,158
General partners' equity .............. 1,892,456 1,841,536
----------- -----------
37,830,079 36,811,694
----------- -----------
$40,046,484 $39,290,185
=========== ===========
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - SEPTEMBER 30, 1997
STATEMENTS OF OPERATIONS
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
-------------------------- -------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Rental Revenue ......................... $2,172,283 $2,157,450 $6,926,885 $6,721,339
---------- ---------- ---------- ----------
Costs and Expenses:
Operating expenses ................ 900,086 854,081 2,629,694 2,537,699
Depreciation and amortization ..... 349,935 319,366 969,805 958,096
Partnership management fee ........ 227,043 227,043 681,129 681,131
Administrative expenses ........... 126,029 128,253 532,387 375,995
Property management fee ........... 64,045 63,614 204,378 200,473
---------- ---------- ---------- ----------
1,667,138 1,592,357 5,017,393 4,753,394
---------- ---------- ---------- ----------
Income before interest and other income 505,145 565,093 1,909,492 1,967,945
Interest income ................... 55,533 39,651 146,628 92,834
Other income ...................... 23,030 22,654 69,660 52,464
---------- ---------- ---------- ----------
Net income ............................. $ 583,708 $ 627,398 $2,125,780 $2,113,243
========== ========== ========== ==========
Net income attributable to:
Limited partners .................. $ 554,523 $ 596,028 $2,019,491 $2,007,581
General partners .................. 29,185 31,370 106,289 105,662
---------- ---------- ---------- ----------
Net income ............................. $ 583,708 $ 627,398 $2,125,780 $2,113,243
========== ========== ========== ==========
Net income per unit of limited
Partnership interest (400,010 units
outstanding) ...................... $ 1.39 $ 1.49 $ 5.05 $ 5.02
========== ========== ========== ==========
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - SEPTEMBER 30, 1997
STATEMENT OF PARTNERS' EQUITY
General Limited
Partners' Partners'
Equity Equity Total
------------ ------------ ------------
<S> <C> <C> <C>
Balance, January 1, 1997 ........................ $ 1,841,536 $ 34,970,158 $ 36,811,694
Net income for the nine
months ended September 30, 1997 ............ 106,289 2,019,491 2,125,780
Distributions as a return of capital for the nine
months ended September 30, 1997 ($2.63 per . (55,369) (1,052,026) (1,107,395)
------------ ------------ ------------
limited partnership unit)
Balance, September 30, 1997 ..................... $ 1,892,456 $ 35,937,623 $ 37,830,079
============ ============ ============
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - SEPTEMBER 30, 1997
STATEMENTS OF CASH FLOWS
For The Nine Months Ended
September 30,
----------------------------
1997 1996
----------- -----------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income .................................. $ 2,125,780 $ 2,113,243
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization ........... 969,805 958,096
Straight-line adjustment for stepped
lease rentals ......................... (46,902) (31,268)
Changes in assets and liabilities:
Accounts payable and accrued expenses ... 478,689 852,157
Receivables ............................. (133,609) (70,809)
Due to affiliates ....................... (883,936) (69,003)
Other assets ............................ (183,173) (225,458)
----------- -----------
Net cash provided by operating activities ... 2,326,654 3,526,958
----------- -----------
Cash Flows From Investing Activities:
Improvements to real estate ................. (708,233) (403,006)
----------- -----------
Cash Flows From Financing Activities:
Distributions to partners ................... (964,234) (757,914)
----------- -----------
Increase In Cash And Cash Equivalents ............ 654,187 2,366,038
Cash And Cash Equivalents, Beginning of Year ..... 4,870,517 2,450,943
----------- -----------
Cash And Cash Equivalents, End of Quarter ........ $ 5,524,704 $ 4,816,981
=========== ===========
</TABLE>
See notes to financial statements
<PAGE>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - SEPTEMBER 30, 1997
NOTES TO FINANCIAL STATEMENTS
l. GENERAL
The accompanying financial statements, notes and discussions should be
read in conjunction with the financial statements, related notes and
discussions contained in the Partnership's annual report on Form 10-K/A
for the year ended December 31, 1996.
The financial information contained herein is unaudited; however, in
the opinion of management, all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of such
financial information have been included.
2. SIGNIFICANT ACCOUNTING POLICIES
Impairment of Assets
The Partnership evaluates the recoverability of the net carrying value
of its real estate and related assets at least annually, and more often
if circumstances dictate. If this review indicates that the carrying
value of the property may not be recoverable, the Partnership estimates
the future cash flows expected to result from the use of the property
and its eventual disposition, generally over a five-year holding
period. In performing this review, management takes into account, among
other things, the existing occupancy, the expected leasing prospects of
the property and the economic situation in the region where the
property is located.
If the sum of the expected future cash flows, undiscounted, is less
than the carrying amount of the property, the Partnership recognizes an
impairment loss, and reduces the carrying amount of the asset to its
estimated fair value. Fair value is the amount at which the asset could
be bought or sold in a current transaction between willing parties,
that is, other than in a forced or liquidation sale. Management
estimates fair value using discounted cash flows or market comparables,
as most appropriate for each property. Independent certified appraisers
are utilized to assist management, when warranted.
Impairment write-downs recorded by the Partnership do not affect the
tax basis of the assets and are not included in the determination of
taxable income or loss.
Because the cash flows used to evaluate the recoverability of the
assets and their fair values are based upon projections of future
economic events, such as property occupancy rates, rental rates,
operating cost inflation and market capitalization rates, the amounts
ultimately realized at disposition may differ materially from the net
carrying values at the balance sheet dates. The cash flows and market
comparables used in this process are based on good faith estimates and
assumptions developed by management. Unanticipated events and
circumstances may occur and some assumptions may not materialize;
therefore, actual results may materially vary from the estimates. The
Partnership may in the future provide additional write-downs, which
could be material, if real estate markets or local economic conditions
change.
<PAGE>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - SEPTEMBER 30, 1997
NOTES TO FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Recently Issued Accounting Pronouncements
The Financial Accounting Standards Board has recently issued several
new accounting pronouncements. Statement No. 128, "Earnings per Share"
establishes standards for computing and presenting earnings per share,
and is effective for financial statements for both interim and annual
periods ending after December 15, 1997. Statement No. 129, "Disclosure
of Information about Capital Structure" establishes standards for
disclosing information about an entity's capital structure, and is
effective for financial statements for periods ending after December
15, 1997. Statement No. 130, "Reporting Comprehensive Income"
establishes standards for reporting and display of comprehensive income
and its components and is effective for fiscal years beginning after
December 15, 1997. Statement No. 131, "Disclosures about Segments of an
Enterprise and Related Information" establishes standards for the way
that public business enterprises report information about operating
segments in annual financial statements and requires that those
enterprises report selected information about operating segments in
interim financial reports issued to shareholders. It also establishes
standards for related disclosures about products and services,
geographic areas, and major customers, and is effective for financial
statements for periods beginning after December 15, 1997.
Management does not believe that these new standards will have a
material effect on the Partnership's reported operating results, per
unit amounts, financial position or cash flow.
Certain reclassifications were made to the prior period financial
statements in order to conform them to the current period presentation.
Results of operations for the nine months ended September 30, 1997 are
not necessarily indicative of the results to be expected for the entire
year.
3. CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES
The Managing General Partner of the Partnership, Resources High Equity,
Inc. is a wholly-owned subsidiary of Presidio Capital Corp.,
("Presidio"). Presidio AGP Corp., which is a wholly-owned subsidiary of
Presidio is the Associate General Partner (together with the Managing
General Partner, the "General Partners"). The General Partners and
affiliates of the General Partners are also engaged in businesses
related to the acquisition and operation of real estate. Presidio is
also the parent of other corporations that are or may in the future be
engaged in businesses that may be in competition with the Partnership.
Accordingly, conflicts of interest may arise between the Partnership
and such other businesses. Subject to the rights ofthe Limited
Partners, under the Limited Patnership Agreement, Presidio controls the
Partnership through its indirect ownership of all the shares of the
General Partners. On November 2, 1997 the Administrative Services
<PAGE>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - SEPTEMBER 30, 1997
NOTES TO FINANCIAL STATEMENTS
3. CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES (CONTINUED)
Agreement with Wexford Management LLC ("Wexford"), the administrator
for Presidio, expired pursuant to its terms. Pursuant to that
agreement, Wexford had authority to designate directors of the General
Partners. Effective November 3, 1997, Wexford and Presidio entered into
an Administrative Services Agreement dated as of November 3, 1997 (the
"ASA"). The ASA provides that Wexford will continue to provide
consulting and administrative services to Presidio and its affiliates
for a term of six months. During the quarter ended September 30, 1997,
reimbursable expenses to Wexford by the Partnership amount to $23,650.
The Partnership has a property management services agreement with
Resources Supervisory Management Corp. ("Resources Supervisory"), an
affiliate of the General Partners, to perform certain functions
relating to the management of the properties of the Partnership. A
portion of the property management fees were paid to unaffiliated
management companies which are engaged for the purpose of performing
the management functions for certain properties. For the quarters ended
September 30, 1997 and 1996, Resources Supervisory was entitled to
receive $64,045 and $63,614 respectively, of which $48,403 and $44,527
was paid to unaffiliated management companies, respectively.
For the administration of the Partnership, the Managing General Partner
is entitled to receive reimbursement of expenses up to a maximum of
$150,000 per year (exclusive of the reimbursement expenses paid to
Wexford ). For each of the quarters ended September 30, 1997 and 1996,
the Managing General Partner was entitled to receive $37,500.
For managing the affairs of the Partnership, the Managing General
Partner is entitled to receive an annual partnership management fee
equal to 1.05% of the amount of original gross proceeds paid or
allocable to the acquisition of property by the Partnership. For each
of the quarters ended September 30, 1997 and 1996, the Managing General
Partner was entitled to receive $227,043.
The General Partners are allocated 5% of the net income of the
Partnership, which amounted to $29,185 and $31,370 for the quarters
ended September 30, 1997 and 1996, respectively. They are also entitled
to receive 5% of distributions, which amounted to $19,790 and $12,632
for the quarters ended September 30, 1997 and 1996, respectively.
During the liquidation stage of the Partnership, the Managing General
Partner or an affiliate may be entitled to receive certain fees, which
are subordinated to the limited partners receiving their original
invested capital and certain specified minimum returns on their
investment.
From July 1996 through October 1997, Millenium Funding II Corp., a
wholly owned indirect subsidiary of Presidio, purchased 22,171 units of
the Partnership from various limited partners. These units represent
approximately 5.6% of the outstanding limited partnership units of the
Partnership.
<PAGE>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - SEPTEMBER 30, 1997
NOTES TO FINANCIAL STATEMENTS
4. REAL ESTATE
The following table is a summary of the Partnership's real estate as
of:
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------ ------------
<S> <C> <C>
Land ................................... $ 11,056,966 $ 11,056,966
Building and improvements .............. 35,525,315 34,817,081
------------ ------------
46,582,281 45,874,047
Less: Accumulated depreciation ......... (14,517,845) (13,719,794)
------------ ------------
$ 32,064,436 $ 32,154,253
============ ============
</TABLE>
No write-downs for impairment were recorded for the nine months ended
September 30, 1997 or 1996.
5. DISTRIBUTIONS PAYABLE
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
-------- --------
<S> <C> <C>
Limited partners ($.94 and $.60 per unit) ........ $376,009 $240,006
General partners ................................. 19,790 12,632
-------- --------
$395,799 $252,638
======== ========
</TABLE>
Such distributions were paid in the quarters subsequent to September
30, 1997 and December 31, 1996, respectively.
<PAGE>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - SEPTEMBER 30, 1997
NOTES TO FINANCIAL STATEMENTS
6. DUE TO AFFILIATES
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
---------- ----------
<S> <C> <C>
Partnership management fee ................... $ 227,043 $ 227,044
Settlement and litigation cost reimbursement
(Note 7) ..................................... -- 824,510
Property management fee ...................... 15,642 75,067
Non-accountable expense reimbursement ........ 37,500 37,500
---------- ----------
$ 280,185 $1,164,121
========== ==========
</TABLE>
Such amounts were paid in the quarters subsequent to September 30, 1997
and December 31, 1996, respectively.
7. COMMITMENTS AND CONTINGENCIES
On or about May 11, 1993 High Equity Partners L.P. - Series 86
("HEP-86"), an affiliated partnership, was advised of the existence of
an action (the "California Action') in which a complaint (the "HEP
Complaint") was filed in the Superior Court for the State of California
for the County of Los Angeles (the "Court") on behalf of a purported
class consisting of all of the purchasers of limited partnership
interests in HEP-86. On April 7, 1994 the plaintiffs were granted leave
to file an amended complaint (the "Amended Complaint").
On November 30, 1995, after the Court preliminarily approved a
settlement of the California Action but ultimately declined to grant
final approval and after the Court granted motions to intervene, the
original and Intervening Plaintiffs filed a Consolidated Class and
Derivative Action Complaint (the "Consolidated Complaint") against the
Administrative and Investment General Partners of HEP-86, the managing
general partner of the Partnership, the managing general partner of
HEP-88 and the indirect corporate parent of the General Partners. The
Consolidated Complaint alleged various state law class and derivative
claims, including claims for breach of fiduciary duties; breach of
contract; unfair and fraudulent business practices under California
Bus. & Prof. Code Sec. 17200; negligence; dissolution, accounting and
receivership; fraud; and negligent misrepresentation. The Consolidated
Complaint alleged, among other things, that the general partners caused
a waste of HEP Partnership assets by collecting management fees in lieu
of pursuing a strategy to maximize the value of the investments owned
by the limited partners; that the general partners breached their duty
<PAGE>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - SEPTEMBER 30, 1997
NOTES TO FINANCIAL STATEMENTS
7. COMMITMENTS AND CONTINGENCIES (CONTINUED)
of loyalty and due care to the limited partners by expropriating
management fees from the partnerships without trying to run the HEP
Partnerships for the purposes for which they are intended; that the
general partners are acting improperly to enrich themselves in their
position of control over the HEP Partnerships and that their actions
prevent non-affiliated entities from making and completing tender
offers to purchase HEP Partnership Units; that by refusing to seek the
sale of the HEP Partnerships' properties, the general partners have
diminished the value of the limited partners' equity in the HEP
Partnerships; that the general partners have taken a heavily overvalued
partnership asset management fee; and that limited partnership units
were sold and marketed through the use of false and misleading
statements.
On February 24, 1997, after the Court again preliminarily approved a
settlement of the California Action but again ultimately declined to
grant final approval, the Court recused itself from considering a
motion to intervene and to file a new complaint in intervention by two
of the objectors to the Revised Settlement, granted the request of one
plaintiffs' law firm to withdraw as class counsel and scheduled future
hearings on various matters.
Thereafter, the Intervening Plaintiffs filed and then revised an
Amended Consolidated Class Action and Derivative Action Complaint (the
Second Amended Consolidated Complaint) which asserts many of the same
claims as the Consolidated Complaint, eliminates certain legal
infirmities from that Consolidated Complaint, and presents more
detailed factual allegations. In particular, that pleading no longer
asserts claims of fraud and negligent misrepresentation. The General
Partners believed that the Second Amended Consolidated Complaint
continued to be subject to challenge on legal grounds and filed
demurrers and a motion to strike. On October 7, 1997, the Court granted
substantial portions of these motions. Thereafter, the General Partners
served answers denying the allegations and asserting numerous
affirmative defenses.
The Limited Partnership Agreement provides for indemnification of the
General Partners and their affiliates in certain circumstances. The
Partnership has agreed to reimburse the General Partners for their
actual costs incurred in defending this litigation and the costs of
preparing settlement materials. Through December 31, 1996, the General
Partners had billed the Partnership a total of $824,510 for these costs
which was paid in February 1997.
The General Partners believe that each of the claims asserted in the
Consolidated Complaint are meritless and intend to continue to
vigorously defend the California Action. It is impossible at this time
to predict what the defense of the California Action will cost, the
Partnership's financial exposure as a result of the indemnification
agreement discussed above, and whether the costs of defending could
adversely affect the Managing General Partner's ability to perform its
obligations to the Partnership.
<PAGE>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - SEPTEMBER 30, 1997
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Working capital reserves are temporarily invested in short-term instruments and,
together with cash flow from operations, are expected to be sufficient to fund
future capital improvements to the Partnership's properties. As of September 30,
1997, total working capital reserves amounted to approximately $3,426,000. The
Partnership intends to distribute to its partners less than all of its future
cash flow from operations in order to assure adequate reserves for capital
improvements and lease procurement costs.
During the nine months ended September 30, 1997, cash and cash equivalents
increased $654,187 as a result of cash provided by operations in excess of
capital expenditures and distributions to partners. The Partnership's primary
source of funds is cash flow from the operation of its properties, principally
rents received from tenants, which amounted to $2,326,654 for the nine months
ended September 30, 1997. The Partnership used $708,233 for capital expenditures
related to capital and tenant improvements to the properties and $964,234 for
distributions to partners for the nine months ended September 30, 1997.
The Partnership expects to continue to utilize a portion of its cash flow from
operations to pay for various capital and tenant improvements to the properties
and leasing commission, the amount of which cannot be predicted with certainty.
Capital and tenant improvements and leasing commissions may in the future exceed
the Partnership's cash flow from operations. In that event, the Partnership
would utilize the remaining working capital reserves or sell one or more
properties. Except as discussed herein, management is not aware of trends,
events, commitments or uncertainties that will have significant impact on
liquidity.
RESULTS OF OPERATIONS
The Partnership experienced a slight increase in net income for the nine months
ended September 30, 1997 compared to the same period in the prior year due
primarily to higher rental revenues, interest income, and other income,
partially offset by higher costs and expenses during 1997. Net income for the
three months ended September 30, 1997 decreased compared to the prior period due
to higher costs and expenses, partially offset by higher rental revenues,
interest income and other income.
Rental revenues increased at Southport and 568 Broadway during the nine and
three months ended September 30, 1997 compared to 1996, primarily due to higher
percentage rents collected during 1997 at Southport and lease renewals at 568
Broadway at rates higher than those in 1996. These increases were partially
offset by lower rental revenues at Westbrook for both current periods, primarily
due to lower occupancy rates in 1997 as compared to the same periods in 1996.
Costs and expenses increased during the nine and three months ended September
30, 1997 compared to the same periods in 1996, primarily due to increase in
operating and administrative expenses. Operating expenses increased during both
periods in 1997 due to higher repairs and maintenance costs at Southport and
Century Park and higher utility expenses at various properties due to higher
occupancy and service rates. Administrative expenses increased due to higher
legal and accounting fees during both periods in 1997 related to ongoing
litigation.
<PAGE>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - SEPTEMBER 30, 1997
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Interest income increased due to higher cash balances during the nine and three
months ended September 30, 1997 compared to the same periods in 1996. Other
income increased during the nine months ended September 30, 1997 compared to the
same period in 1996 due to a greater number of investor transfers, which result
in transfer fees received by the Partnership.
Inflation is not expected to have a material impact on the Partnership's
operations or financial position.
Legal Proceedings
The Partnership is a party to certain litigation. See Note 7 to the financial
statements for a description thereof.
<PAGE>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - SEPTEMBER 30, 1997
Part II. - Other Information
Item 1 - Legal Proceedings
(a) See Management's Discussion and Analysis of Financial
Condition and Results of Operations and Notes to Financial
Statements - Note 7 which is herein incorporated by reference.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits: There were no exhibits filed.
(b) Reports on Form 8-K:
Current report on Form 8-K dated August 7, 1997.
Current report on Form 8-K dated September 19, 1997.
<PAGE>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - SEPTEMBER 30, 1997
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.
Integrated Resources High Equity
Partners, Series 85,
A California Limited Partnership
By: Resources High Equity, Inc.,
Managing General Partner
Dated: November 14, 1997 By: /S/ Richard Sabella
-------------------
Richard Sabella
President
(Duly Authorized Officer)
Dated: November 14, 1997 By: /S/ Kevin Reardon
-----------------
Kevin Reardon
Vice President, Secretary
and Treasurer
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary information extracted from the financial
statements of the September 30, 1997 Form 10-Q of Integrated Resources High
Equity Partners, Series 85 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 5,524,704
<SECURITIES> 0
<RECEIVABLES> 291,813
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 40,046,484
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 37,830,079
<TOTAL-LIABILITY-AND-EQUITY> 40,046,484
<SALES> 0
<TOTAL-REVENUES> 6,926,885
<CGS> 0
<TOTAL-COSTS> 2,629,694
<OTHER-EXPENSES> 2,387,699
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,125,780
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,125,780
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,125,780
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
