================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 March 31, 1998
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 - MARCH 31, 1998
INDEX
Part I. Financial Information:
Balance Sheets - March 31, 1998 and December 31, 1997
Statements of Operations -- Three Months Ended
March 31, 1998 and 1997
Statement of Partners' Equity -- Three Months Ended
March 31, 1998
Statements of Cash Flows -- Three Months Ended
March 31, 1998 and 1997
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 - MARCH 31, 1998
BALANCE SHEETS
March 31, December 31,
1998 1997
----------- -----------
<S> <C> <C>
ASSETS
Real estate - net .......................... $33,210,936 $33,033,710
Cash and cash equivalents .................. 5,031,833 4,350,887
Other assets ............................... 1,986,863 2,033,252
Receivables ................................ 148,703 182,568
----------- -----------
$40,378,335 $39,600,417
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Accounts payable and accrued expenses ...... $ 1,524,817 $ 1,183,720
Distributions payable ...................... 395,799 395,799
Due to affiliates .......................... 485,898 577,739
----------- -----------
2,406,514 2,157,258
----------- -----------
Commitments and contingencies
PARTNERS' EQUITY:
Limited partners' equity (400,010
units issued and outstanding) ..... 36,072,279 35,570,050
General partners' equity .............. 1,899,542 1,873,109
----------- -----------
37,971,821 37,443,159
----------- -----------
$40,378,335 $39,600,417
=========== ===========
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - MARCH 31, 1998
STATEMENTS OF OPERATIONS
For the Three Months
Ended March 31,
---------------------------
1998 1997
---------- ----------
<S> <C> <C>
Rental Revenue ............................... $2,590,545 $2,356,528
---------- ----------
Costs and Expenses:
Operating expenses ...................... 836,815 872,018
Depreciation and amortization ........... 329,293 309,935
Partnership management fee .............. 227,043 227,043
Administrative expenses ................. 225,750 202,260
Property management fee ................. 76,584 69,069
---------- ----------
1,695,485 1,680,325
---------- ----------
Income before interest and other income ...... 895,060 676,203
Interest income ......................... 26,201 42,666
Other income ............................ 3,200 15,290
---------- ----------
Net income ................................... $ 924,461 $ 734,159
========== ==========
Net income attributable to:
Limited partners ........................ $ 878,238 $ 697,451
General partners ........................ 46,223 36,708
---------- ----------
Net income ................................... $ 924,461 $ 734,159
========== ==========
Net income per unit of limited
Partnership interest (400,010 units
outstanding) ............................ $ 2.20 $ 1.74
========== ==========
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - MARCH 31, 1998
STATEMENT OF PARTNERS' EQUITY
General Limited
Partners' Partners'
Equity Equity Total
------------ ------------ ------------
<S> <C> <C> <C>
Balance, January 1, 1998 ......................... $ 1,873,109 $ 35,570,050 $ 37,443,159
Net income for the three
months ended March 31, 1998 ................. 46,223 878,238 924,461
Distributions as a return of capital for the three
months ended March 31, 1998 ($.94 per limited
partnership unit............................. (19,790) (376,009) (395,799)
------------ ------------ ------------
Balance, March 31, 1998 .......................... $ 1,899,542 $ 36,072,279 $ 37,971,821
============ ============ ============
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - MARCH 31, 1998
STATEMENTS OF CASH FLOWS
For the Three Months
Ended March 31,
----------------------------
1998 1997
----------- -----------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income .................................. $ 924,461 $ 734,159
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization ........... 329,293 309,935
Straight-line adjustment for stepped
lease rentals ......................... 1,000 (13,228)
Changes in assets and liabilities:
Accounts payable and accrued expenses ... 341,097 196,472
Receivables ............................. 33,865 37,728
Due to affiliates ....................... (91,841) (884,348)
Other assets ............................ (22,801) (72,855)
----------- -----------
Net cash provided by operating activities ... 1,515,074 307,863
----------- -----------
Cash Flows From Investing Activities:
Improvements to real estate ................. (438,329) (249,772)
----------- -----------
Cash Flows From Financing Activities:
Distributions to partners ................... (395,799) (252,638)
----------- -----------
Increase (Decrease) In Cash And Cash Equivalents . 680,946 (194,547)
Cash And Cash Equivalents, Beginning of Year ..... 4,350,887 4,870,517
----------- -----------
Cash And Cash Equivalents, End of Quarter ........ $ 5,031,833 $ 4,675,970
=========== ===========
</TABLE>
See notes to financial statements
<PAGE>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - MARCH 31, 1998
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
for the year ended December 31, 1997.
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
<PAGE>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - MARCH 31, 1998
NOTES TO FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
Certain reclassifications were made to the prior year financial
statements in order to conform them to the current period presentation.
Results of operations for the three months ended March 31, 1998 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.
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
March 31, 1998 and 1997, Resources Supervisory was entitled to receive
$76,584 and $69,069 respectively, of which $65,229 and $53,839 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. For each of the quarters ended March 31, 1998 and
1997, 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 March 31, 1998 and 1997, the Managing General
Partner was entitled to receive $227,043.
<PAGE>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - MARCH 31, 1998
NOTES TO FINANCIAL STATEMENTS
3. CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES (CONTINUED)
The General Partners are allocated 5% of the net income of the
Partnership, which amounted to $46,223 and $36,708 for the quarters
ended March 31, 1998 and 1997, respectively. They are also entitled to
receive 5% of distributions, which amounted to $19,790 and $15,790 for
the quarters ended March 31, 1998 and 1997, 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. All fees received by the General Partners are subject to
certain limitations as set forth in the Partnership Agreement.
From July 1996 through May 1, 1998, Millenium Funding II Corp., a
wholly owned indirect subsidiary of Presidio, purchased 39,123 units of
the Partnership from various limited partners, which represents
approximately 9.8% of the outstanding limited partnership units of the
Partnership.
Pursuant to an agreement dated as of March 6, 1998 among Presidio
Capital Corp., American Real Estate Holding, L.P. and Olympia Investors
L.P. (the "Purchaser"), on March 12, 1998, the Purchaser commenced a
tender offer to purchase up to 40% of the outstanding units of limited
partnership interest at a purchase price of $95.00 per unit.
4. REAL ESTATE
The following table is a summary of the Partnership's real estate as
of:
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
------------ ------------
<S> <C> <C>
Land ......................... $ 11,056,966 $ 11,056,966
Building and improvements .... 37,223,037 36,784,708
------------ ------------
48,280,003 47,841,674
Less: Accumulated depreciation (15,069,067) (14,807,964)
------------ ------------
$ 33,210,936 $ 33,033,710
============ ============
</TABLE>
No write-downs for impairment were recorded for the three months ended
March 31, 1998 or 1997.
<PAGE>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - MARCH 31, 1998
NOTES TO FINANCIAL STATEMENTS
5. DISTRIBUTIONS PAYABLE
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
-------- --------
<S> <C> <C>
Limited partners ($.94 per unit) $376,009 $376,009
General partners ............... 19,790 19,790
-------- --------
$395,799 $395,799
======== ========
</TABLE>
Such distributions were paid in the quarters subsequent to March 31,
1998 and December 31, 1997, respectively.
6. DUE TO AFFILIATES
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
-------- --------
<S> <C> <C>
Partnership management fee ..................... $227,043 $227,044
Reorganization and litigation cost reimbursement
(Note 7) ....................................... 210,000 210,000
Property management fee ........................ 11,355 103,195
Non-accountable expense reimbursement .......... 37,500 37,500
-------- --------
$485,898 $577,739
======== ========
</TABLE>
Such amounts were paid in the quarters subsequent to March 31, 1998 and
December 31, 1997, 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 the Partnership. On April 7, 1994 the plaintiffs were
granted leave to file an amended complaint (the "Amended Complaint") on
behalf of a class consisting of all the purchasers of limited
partnership interest in HEP-86, the Partnership, and High Equity
Partners L.P. - Series 88 ("HEP-88"), another affiliated partnership.
<PAGE>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - MARCH 31, 1998
NOTES TO FINANCIAL STATEMENTS
7. COMMITMENTS AND CONTINGENCIES (CONTINUED)
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
managing general partner of HEP-85 and HEP-88 and the Investment
General Partner of HEP-86; the Administrative General Partner of HEP-86
(the "General Partners"); a subsidiary of the indirect corporate parent
of the General Partners; 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 the 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 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 acted improperly to enrich
themselves in their position of control over the HEP partnerships and
that their actions prevented non-affiliated entities from making and
completing tender offers to purchase units in the HEP partnership; that
by refusing to seek the sale of the HEP partnerships' properties, the
General Partners diminished the value of the limited partners' equity
in the HEP partnerships; that the General Partners took a heavily
overvalued partnership asset management fee; and that limited
partnership units were sold and marketed through the use of false and
misleading statements.
The Court entered an order on January 14, 1997 rejecting the settlement
and concluding that there had not been an adequate showing that the
settlement was fair and reasonable. On February 24, 1997, the Court
granted the request of one plaintiffs' law firm to withdraw as class
counsel. Thereafter, in June 1997, the plaintiffs again amended their
complaint (the "Second Amended Complaint"). The Seconded Amended
Complaint asserts substantially the same claims as the Consolidated
Complaint, except that it no longer contains causes of action for
fraud, for negligent misrepresentation, or for negligence. The
defendants served answers denying the allegations and asserting
numerous affirmative defenses. In February 1998, the Court certified
three plaintiff classes consisting of the current unit holders in each
of the three HEP partnerships. On March 11, 1998, the Court stayed the
California Action temporarily to permit the parties to engage in
renewed settlement discussions.
<PAGE>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - MARCH 31, 1998
NOTES TO FINANCIAL STATEMENTS
7. COMMITMENTS AND CONTINGENCIES (CONTINUED)
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 March 31, 1998, the General
Partners had billed the Partnership a total of $1,034,510 for these
costs, of which $824,510 was paid.
The General Partners believe that each of the claims asserted in the
Second Amended 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.
On February 6,1998, Everest Investors 8, LLC ("Everest") commenced an
action in the Superior Court of the State of California for the County
of Los Angeles (Case No. BC 185554), against, among others, the HEP
partnerships, Resources Pension Shares 5 LP (an affiliated
partnership), the general partners of each of the partnerships, and DCC
Securities Corp. In the action, Everest alleged, among other things,
that the partnerships and the general partners breached the provisions
of the applicable partnership agreements by refusing to recognize
transfers to Everest of limited partnership units purportedly acquired
pursuant to tender offers that had been made by Everest (the "Everest
Tender Units"). Everest sought injunctive relief (a) directing the
recognition of transfers to Everest of the Everest Tender Units and the
admission of Everest as a limited partner with respect to the Everest
Tender Units and (b) enjoining the transfer of the Everest Tender Units
to any either party. Everest seeks damages, including punitive damages,
for alleged breach of contract, defamation and intentional interference
with contractual relations. Everest's motion for a temporary
restraining order was denied on February 6, 1998. A hearing on
Everest's application for a preliminary injunction had been scheduled
for February 26, however, on February 20, 1998, Everest asked the Court
to take its application off calendar. The defendants served answers
denying the allegations and asserting numerous affirmative defenses.
Merits discovery has commenced. The Partnerships and the General
Partners believe that Everest claims are without merit and intend to
vigorously contest the action.
On March 27, 1998, Everest commenced an action in the United States
District Court for the Central District of California against, among
others, the general partners of the HEP Partnerships. In the action,
Everest alleged, among other things, various violations of the Williams
Act Section 14(d) of the Securities Exchange Act of 1934 in connection
with the general partners' refusal to recognize transfers to Everest of
limited partnership units purportedly acquired pursuant to the Everest
tender offers and the letters sent by the general partners to the
<PAGE>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - MARCH 31, 1998
NOTES TO FINANCIAL STATEMENTS
7. COMMITMENTS AND CONTINGENCIES (CONTINUED)
limited partners advising them of the general partners' determination
that the Everest tender offers violated applicable securities laws. The
general partners believe that Everest's claims are without merit and
intend to vigorously contest the action.
<PAGE>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - MARCH 31, 1998
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 March 31,
1998, 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 capitalized lease procurement costs.
During the three months ended March 31, 1998, cash and cash equivalents
increased $680,946 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 $1,515,074 for the three months
ended March 31, 1998. The Partnership used $438,329 for capital expenditures
related to capital and tenant improvements to the properties and $395,799 for
distributions to partners for the three months ended March 31, 1998.
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 commissions. 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,
reduce distributions, or sell one or more properties. Except as discussed above,
management is not aware of any other trends, events, commitments or
uncertainties that will have a significant impact on liquidity.
RESULTS OF OPERATIONS
The Partnership experienced an increase in net income for the three months ended
March 31, 1998 compared to the same period in the prior year due primarily to
higher rental revenues, partially offset by higher costs and expenses and lower
interest and other income during 1998.
Rental revenues increased primarily at Southport during the three ended March
31, 1998 compared to 1997, due to higher percentage rents collected during 1998
as a result of higher sales volume. This increase was partially offset by lower
rental revenues at Westbrook, primarily due to lower occupancy rates in 1998 as
compared to the same period in 1997.
Costs and expenses increased during the three months ended March 31, 1998
compared to the same period in 1997, primarily due to increases in
administrative expenses and depreciation expense, partially offset by a decrease
in operating expenses. Administrative expenses increased due to higher legal and
accounting fees during 1998 related to ongoing litigation and the HEP settlement
and depreciation increased due to the significant capital additions in 1997.
Operating expenses decreased during the first three months of 1998 due to lower
repair and maintenance costs at various properties.
<PAGE>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - MARCH 31, 1998
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Interest income decreased due to lower cash balances during the three ended
March 31, 1998 compared to the same period in 1997. Other income decreased
during the three months ended March 31, 1998 compared to the same period in 1997
due to fewer investor transfers.
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 - MARCH 31, 1998
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:
None
<PAGE>
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
FORM 10-Q - MARCH 31, 1998
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: May 12, 1998 By: /S/ Richard Sabella
-------------------
Richard Sabella
President
(Duly Authorized Officer)
Dated: May 12, 1998 By: /S/ Lawrence Schachter
----------------------
Lawrence Schachter
Senior Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary information extracted from the financial
statements of the March 31, 1998 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 5,031,833
<SECURITIES> 0
<RECEIVABLES> 148,703
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 40,378,335
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 37,971,821
<TOTAL-LIABILITY-AND-EQUITY> 40,378,335
<SALES> 0
<TOTAL-REVENUES> 2,590,545
<CGS> 0
<TOTAL-COSTS> 836,815
<OTHER-EXPENSES> 858,670
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 924,461
<INCOME-TAX> 0
<INCOME-CONTINUING> 924,461
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 924,461
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
