<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1998
------------------
Commission file number 1-11059
-----------------
AMERICAN INSURED MORTGAGE INVESTORS - SERIES 85, L.P.
-----------------------------------------------------------------
(Exact name of registrant as specified in charter)
California 13-3257662
------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11200 Rockville Pike, Rockville, Maryland 20852
- ----------------------------------------- -----------------
(Address of principal executive offices) (Zip Code)
(301) 816-2300
----------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark 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 and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
---- ----
As of March 31, 1998, 12,079,389 depositary units of limited
partnership interest were outstanding.
<PAGE>
AMERICAN INSURED MORTGAGE INVESTORS - SERIES 85, L.P.
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I. Financial Information
Item 1. Financial Statements
Balance Sheets - March 31, 1998 (unaudited)
and December 31, 1997.............................. 3
Statements of Operations - for the three
months ended March 31, 1998 and 1997
(unaudited) ....................................... 4
Statement of Changes in Partners' Equity -
for the three months ended March 31,
1998 (unaudited)................................... 5
Statements of Cash Flows - for the three
months ended March 31, 1998 and
1997 (unaudited)................................... 6
Notes to Financial Statements (unaudited)............ 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results
of Operations...................................... 13
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K..................... 16
Signature ..................................................... 17
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMERICAN INSURED MORTGAGE INVESTORS - SERIES 85, L.P.
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
------------- ------------
(unaudited)
ASSETS
<S> <C> <C>
Investment in FHA-Insured
Certificates and GNMA Mortgage-
Backed Securities, at fair value:
Acquired insured mortgages $133,350,419 $142,822,793
Originated insured mortgages 16,928,359 16,887,282
------------ ------------
150,278,778 159,710,075
------------ ------------
Investment in FHA-Insured Loans, at
amortized cost, net of unamortized
discount and premium:
Acquired insured mortgages 13,440,914 14,416,917
Originated insured mortgages 12,901,882 12,928,572
------------ ------------
26,342,796 27,345,489
Cash and cash equivalents 12,715,442 14,718,103
Receivables and other assets 3,841,996 1,676,021
------------ ------------
Total assets $193,179,012 $203,449,688
------------ ------------
------------ ------------
LIABILITIES AND PARTNERS' EQUITY
Distributions payable $ 13,449,615 $ 15,460,772
Accounts payable and accrued expenses 203,321 306,715
Due to affiliate 1,266,454 --
------------ ------------
Total liabilities 14,919,390 15,767,487
------------ ------------
Partners' equity:
Limited partners' equity 170,386,910 180,044,243
General partner's deficit (2,916,586) (2,524,665)
Unrealized gain on investment
in FHA-Insured Certificates
and GNMA Mortgage-Backed
Securities 11,031,676 10,482,727
Unrealized loss on investment
in FHA-Insured Certificates
and GNMA Mortgage-Backed
Securities (242,378) (320,104)
------------ ------------
Total partners' equity 178,259,622 187,682,201
------------ ------------
Total liabilities and partners'
equity 193,179,012 $203,449,688
------------ ------------
------------ ------------
</TABLE>
The accompanying notes are an integral
part of these financial statements.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMERICAN INSURED MORTGAGE INVESTORS - SERIES 85, L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended
March 31,
-----------------------------
1998 1997
------------ ------------
<S> <C> <C>
Income:
Mortgage investment income $ 3,705,898 $ 4,217,068
Interest and other income 153,206 57,254
------------ ------------
3,859,104 4,274,322
------------ ------------
Expenses:
Asset management fee to related parties 418,102 477,893
General and administrative 144,453 147,990
Interest expense to affiliate -- 5,783
------------ ------------
562,555 631,666
------------ ------------
Net earnings before net gains
on mortgage dispositions 3,296,549 3,642,656
Net gains on mortgage
dispositions 103,812 205,217
------------ ------------
Net earnings $ 3,400,361 $ 3,847,873
============ ============
Net earnings allocated to:
Limited partners - 96.1% $ 3,267,747 $ 3,697,806
General partner - 3.9% 132,614 150,067
------------ ------------
$ 3,400,361 $ 3,847,873
------------ ------------
------------ ------------
Net earnings per Limited
Partnership Unit - basic $ 0.27 $ 0.31
------------ ------------
------------ ------------
</TABLE>
The accompanying notes are an integral
part of these financial statements.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMERICAN INSURED MORTGAGE INVESTORS - SERIES 85, L.P.
STATEMENT OF CHANGES IN PARTNERS' EQUITY
For the three months ended March 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
Adjustment Adjustment
to to
Unrealized Unrealized
Gains on Losses on
Investment Investment
General Limited in Insured in Insured
Partner Partners Mortgages Mortgages Total
------------- ------------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1997 $ (2,524,665) $ 180,044,243 $ 10,482,727 $ (320,104) $ 187,682,201
Net earnings 132,614 3,267,747 -- -- 3,400,361
Distributions paid or
accrued of $1.07 per
Unit, including return
of capital of $0.80 (524,535) (12,925,080) -- -- (13,449,615)
Adjustments to unrealized
gains (losses) on investments
in FHA-Insured Certificates
and GNMA Mortgage-Backed
Securities -- -- 548,949 77,726 626,675
------------- ------------- -------------- ------------ -------------
Balance, March 31, 1998 $ (2,916,586) $ 170,386,910 $ 11,031,676 $ (242,378) $ 178,259,622
------------- ------------- -------------- ------------ -------------
------------- ------------- -------------- ------------ -------------
Limited Partnership Units
outstanding - basic, as of
March 31, 1998 12,079,514
-------------
-------------
</TABLE>
The accompanying notes are an integral
part of these financial statements.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMERICAN INSURED MORTGAGE INVESTORS - SERIES 85, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended March 31,
1998 1997
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 3,400,361 $ 3,847,873
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Net gain on mortgage dispositions (103,812) (205,217)
Changes in assets and liabilities:
Increase (decrease) in accounts payable and
accrued expenses (103,394) 6,876
Decrease in receivables and other assets 250,496 22,195
Decrease in investment in affiliate -- 5,783
------------ ------------
Net cash provided by operating activities 3,443,651 3,677,510
------------ ------------
Cash flows from investing activities:
Receipt of mortgage principal from
scheduled payments 337,939 382,892
Proceeds from mortgage dispositions 9,676,521 904,891
------------ ------------
Net cash provided by investing activities 10,014,460 1,287,783
------------ ------------
Cash flows from financing activities:
Distributions paid to partners (15,460,772) (10,684,273)
------------ ------------
Net cash used in financing activities (15,460,772) (10,684,273)
------------ ------------
Net decrease in cash and cash equivalents (2,002,661) (5,718,980)
Cash and cash equivalents, beginning of period 14,718,103 9,716,786
------------ ------------
Cash and cash equivalents, end of period $ 12,715,442 $ 3,997,806
------------ ------------
------------ ------------
Non cash investing activity:
9.5% debenture received from HUD in exchange
for the mortgage on Portervillage I Apartments $ 2,296,098 --
Portion of debenture due to affiliate, AIM 84 (1,148,049) --
</TABLE>
The accompanying notes are an integral
part of these financial statements.
<PAGE>
AMERICAN INSURED MORTGAGE INVESTORS - SERIES 85, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. ORGANIZATION
American Insured Mortgage Investors - Series 85, L.P. (the Partnership)
was formed under the Uniform Limited Partnership Act of the state of California
on June 26, 1984. The Partnership will terminate on December 31, 2009, unless
previously terminated under the provisions of the Partnership Agreement.
Effective September 6, 1991, CRIIMI, Inc. (the General Partner)
succeeded the former general partners to become the sole general
partner of the Partnership. CRIIMI, Inc. is a wholly owned subsidiary
of CRIIMI MAE Inc. (CRIIMI MAE).
The Partnership's investment in mortgages consists of participation
certificates evidencing a 100% undivided beneficial interest in government
insured multifamily mortgages issued or sold pursuant to Federal Housing
Administration (FHA) programs (FHA-Insured Certificates), mortgage-backed
securities guaranteed by the Government National Mortgage Association (GNMA)
(GNMA Mortgage-Backed Securities) and FHA-insured mortgage loans (FHA-Insured
Loans and together with FHA-Insured Certificates and GNMA Mortgage-Backed
Securities referred to herein as Insured Mortgages). The mortgages underlying
the FHA- Insured Certificates, GNMA Mortgage-Backed Securities and FHA-Insured
Loans are non-recourse first liens on multifamily residential developments or
retirement homes.
2. BASIS OF PRESENTATION
In the opinion of the General Partner, the accompanying unaudited
financial statements contain all adjustments of a normal recurring nature
necessary to present fairly the financial position of the Partnership as of
March 31, 1998 and December 31, 1997 and the results of its operations for the
three months ended March 31, 1998 and 1997 and its cash flows for the three
months ended March 31, 1998 and 1997.
These unaudited financial statements have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and note disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. While the General Partner believes that the disclosures
presented are adequate to make the information not misleading, these financial
statements should be read in conjunction with the financial statements and the
notes to the financial statements included in the Partnership's Annual Report
filed on Form 10-K for the year ended December 31, 1997.
<PAGE>
AMERICAN INSURED MORTGAGE INVESTORS - SERIES 85, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
2. BASIS OF PRESENTATION - Continued
New Accounting Standards
- ------------------------
During 1997, FASB issued SFAS No. 130 "Reporting Comprehensive Income"
(FAS 130). FAS 130 states that all items that are required to be recognized
under accounting standards as components of comprehensive income are to be
reported in a separate statement of income. This would include net income as
currently reported by the Partnership adjusted for unrealized gains and losses
related to the Partnership's mortgages accounted for as "available for sale".
FAS 130 was adopted by the Partnership January 1, 1998. For the three months
ended March 31, 1998 and 1997, comprehensive income was $4,027,036 and
$1,124,574, respectively.
<PAGE>
AMERICAN INSURED MORTGAGE INVESTORS - SERIES 85, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
3. INVESTMENT IN FHA-INSURED CERTIFICATES AND GNMA MORTGAGE-
BACKED SECURITIES
Fully Insured Mortgage Investments
----------------------------------
Listed below is the Partnership's aggregate investment in
Fully Insured Mortgages:
<TABLE>
<CAPTION> March 31, December 31,
1998 1997
------------ ------------
<S> <C> <C>
Fully Insured Acquired:
Number of
GNMA Mortgage-Backed Securities(1) 8 9
FHA-Insured Certificates (2) 55 55
Amortized Cost 122,500,844 $132,530,176
Face Value 127,684,602 137,674,964
Fair Value 133,350,419 142,822,793
Fully Insured Originated:
Number of
GNMA Mortgage-Backed Securities 1 1
FHA-Insured Certificates 1 1
Amortized Cost 16,988,636 $ 17,017,276
Face Value 16,632,020 16,660,658
Fair Value 16,928,359 16,887,282
</TABLE>
(1) In February 1998, the mortgage on Spanish Trace Apartments was
prepaid. The Partnership received net proceeds of approximately
$9.7 million and recognized a loss of approximately $96,000 for
the three months ended March 31, 1998. A distribution of
approximately $0.77 per unit related to this prepayment was
declared in March 1998 and was paid to Unitholders in May 1998.
(2) In April 1998, the mortgages on Emerald Green Apartments and
Isle of Pines Village Apartments were prepaid. The Partnership
received net proceeds of approximately $2.4 million resulting in
a gain of approximately $520,000. The Partnership expects to
distribute approximately $0.19 per Unit in August 1998, related
to the prepayment of these mortgages.
As of May 7, 1998, all of the fully insured FHA-Insured
Certificates and GNMA Mortgage-Backed Securities are current with
respect to the payment of principal and interest except for the
mortgages on Stafford Towers and Holden Court Apartments, which are
delinquent with respect to the March 1998 payment of principal and
interest.
<PAGE>
AMERICAN INSURED MORTGAGE INVESTORS - SERIES 85, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
4. INVESTMENT IN FHA-INSURED LOANS
Fully Insured FHA-Insured Loans
-------------------------------
Listed below is the Partnership's aggregate investment in
FHA-Insured Loans:
<TABLE>
<CAPTION> March 31, December 31,
1998 1997
------------- ------------
<S> <C> <C>
Fully Insured Acquired:
Number of Loans(1) 11 12
Amortized Cost $ 13,440,914 $ 14,416,917
Face Value 15,962,874 17,165,551
Fair Value 16,279,572 17,432,816
Fully Insured Originated:
Number of Loans 3 3
Amortized Cost $ 12,901,882 $ 12,928,572
Face Value 12,564,909 12,589,214
Fair Value 13,437,465 13,431,769
</TABLE>
(1) In March 1998, HUD issued assignment proceeds in the form of a 9.5%
debenture for the mortgage on Portervillage I Apartments. This
mortgage, which had been delinquent since January 1997, is owned 50%
by AIM 85 and 50% by an affiliate, American Insured Mortgage Investors
(AIM 84). The debenture face value is $2,296,098 with interest due
semi-annually on January 1 and July 1. Upon sale of the debenture, 50%
of the proceeds will be payable to AIM 84. The Partnership expects to
receive net proceeds of approximately $1.1 million and has recognized
a gain of approximately $200,000 for the three months ended March 31,
1998. The debenture and accrued interest are included on the balance
sheet in Receivables and other assets and the portion due to AIM 84 is
included in Due to affiliate. A distribution will be declared in the
quarter in which cash is received for the debenture.
As of May 7, 1998, all of the Partnership's FHA-Insured Loans,
recorded at amortized cost, were current with respect to the payment of
principal and interest.
In addition to base interest payments under Originated Insured
Mortgages, the Partnership is entitled to additional interest based on
a percentage of the net cash flow from the underlying development
(referred to as Participations). During the three months ended March
31, 1998 and 1997, the Partnership received additional interest of
$34,553 and $0, respectively, from the Participations. These amounts,
if any, are included in mortgage investment income on the accompanying
statements of operations.
<PAGE>
AMERICAN INSURED MORTGAGE INVESTORS - SERIES 85, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
5. DISTRIBUTIONS TO UNITHOLDERS
The distributions paid or accrued to Unitholders on a per Unit basis
for the three months ended March 31, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
1998 1997
------ ------
<S> <C> <C>
Quarter ended March 31, $ 1.07(1) $ 0.39(2)
------ ------
------ ------
</TABLE>
(1) This amount includes approximately $0.77 per Unit return of
capital from the disposition of the mortgage on Spanish Trace
Apartments.
(2) This amount includes approximately $0.07 per Unit return of
capital and gain from the disposition of the following
mortgages: Meadow Park Apartments I of $0.05 and Security
Apartments of $0.02.
The basis for paying distributions to Unitholders is net proceeds from
mortgage dispositions, if any, and cash flow from operations, which includes
regular interest income and principal from Insured Mortgages. Although the
Insured Mortgages yield a fixed monthly mortgage payment once purchased, the
cash distributions paid to the Unitholders will vary during each quarter due to
(1) the fluctuating yields in the short-term money market where the monthly
mortgage payment receipts are temporarily invested prior to the payment of
quarterly distributions, (2) the reduction in the asset base and monthly
mortgage payments resulting from monthly mortgage payments received or mortgage
dispositions, (3) variations in the cash flow attributable to the delinquency or
default of Insured Mortgages and professional fees and foreclosure costs
incurred in connection with those Insured Mortgages and (4) variations in the
Partnership's operating expenses.
6. TRANSACTIONS WITH RELATED PARTIES
The General Partner and certain affiliated entities, during the three
months ended March 31, 1998 and 1997, earned or received compensation or
payments for services from the Partnership as follows:
<PAGE>
AMERICAN INSURED MORTGAGE INVESTORS - SERIES 85, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
6. TRANSACTIONS WITH RELATED PARTIES - Continued
<TABLE>
<CAPTION>
COMPENSATION PAID OR ACCRUED TO RELATED PARTIES
-----------------------------------------------
For the
three months ended
Capacity in Which March 31,
Name of Recipient Served/Item 1998 1997
- ----------------- ---------------------------- ---------- ----------
<S> <C> <C> <C>
CRIIMI, Inc. General Partner/Distribution $ 524,535 $ 191,186
AIM Acquisition Advisor/Asset Management Fee 418,102 477,893
Partners, L.P.(1)
CRIIMI MAE Affiliate of General Partner/ 16,183 16,943
Management, Inc. Expense Reimbursement
</TABLE>
(1) The Advisor, pursuant to the Partnership Agreement, effective June 26,
1984, is entitled to an Asset Management Fee equal to 0.95% of Total
Invested Assets (as defined in the Partnership Agreement). CRIIMI MAE
Services Limited Partnership, the sub-advisor to the Partnership (the
Sub-advisor) is entitled to a fee of 0.28% of Total Invested Assets. Of
the amounts paid to the Advisor, the Sub-advisor earned a fee equal to
$123,236 and $140,856 for the three months ended March 31, 1998 and
1997, respectively. The Sub-advisor is an affiliate of CRIIMI MAE.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Introduction
- ------------
The Partnership's Management's Discussion and Analysis of Financial
Condition and Results of Operations contains statements that may be considered
forward looking. These statements contain a number of risks and uncertainties as
discussed herein and in the Partnership's other reports filed with the
Securities and Exchange Commission that could cause actual results to differ
materially. See Item 1, "Forward-Looking Statements" in the Partnership's Annual
Report for 1997 on Form 10-K for a more detailed discussion of such risks and
uncertainties.
General
- -------
As of March 31, 1998, the Partnership had invested in 79 Insured
Mortgages with an aggregate amortized cost of approximately $165.8 million, an
aggregate face value of approximately $172.8 million and an aggregate fair value
of approximately $180.0 million, as discussed below.
In April 1998, the mortgages on Emerald Green Apartments and Isle of
Pines Village Apartments were prepaid. The Partnership received net proceeds of
approximately $2.4 million resulting in a gain of approximately $520,000. The
Partnership expects to distribute approximately $0.19 per Unit in August 1998,
related to the prepayment of these mortgages.
As of May 7, 1998, all of the fully insured FHA-Insured Certificates
and GNMA Mortgage-Backed Securities are current with respect to the payment of
principal and interest except for the mortgages on Stafford Towers and Holden
Court Apartments, which are delinquent with respect to the March 1998 payment of
principal and interest.
Results of Operations
- ---------------------
Net earnings for the three months ended March 31, 1998 decreased as
compared to the corresponding period in 1997. This decrease was primarily the
result of a reduction in mortgage investment income due to the disposition of
six mortgages since June 1997. In addition, net gains on mortgage dispositions
decreased, as discussed below.
Interest and other income increased for the three months ended March
31, 1998, as compared to the corresponding period in 1997, primarily due to the
investment of proceeds received from the disposition of mortgages, prior to
distribution, as discussed in Note 3 of the financial statements.
Asset management fees decreased for the three months ended March 31,
1998, as compared to the corresponding period in 1997, primarily from the
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Continued
reduction in the mortgage asset base.
Interest expense to affiliate decreased for the three months ended
March 31, 1998, as compared to the corresponding period in 1997. This decrease
was due to the cancellation of the note payable to an affiliate, American
Insured Mortgage Investors, L.P. - Series 88 (AIM 88), as of April 1, 1998.
Net gains on mortgage dispositions decreased for the three months ended
March 31, 1998, as compared to the corresponding period in 1997. During the
first three months of 1998, the Partnership recognized a gain of approximately
$200,000 from the assignment of the mortgage on Portervillage I Apartments in
March 1998 and recognized a loss of approximately $96,000 from the prepayment of
the mortgage on Spanish Trace Apartments in February 1998. During the first
three months of 1997, the Partnership recognized gains of approximately $66,000
from the prepayment of the mortgage on Security Apartments in February 1997, and
approximately $139,000 from the assignment of the mortgage on Meadow Park
Apartments I in January 1997.
Liquidity and Capital Resources
- -------------------------------
The Partnership's operating cash receipts, derived from payments of
principal and interest on Insured Mortgages, plus cash receipts from interest on
short-term investments, were sufficient during the first three months of 1998 to
meet operating requirements.
The basis for paying distributions to Unitholders is net proceeds from
mortgage dispositions, if any, and cash flow from operations, which includes
regular interest income and principal from Insured Mortgages. Although the
Insured Mortgages yield a fixed monthly mortgage payment once purchased, the
cash distributions paid to the Unitholders will vary during each quarter due to
(1) the fluctuating yields in the short-term money market where the monthly
mortgage payments received are temporarily invested prior to the payment of
quarterly distributions, (2) the reduction in the asset base and monthly
mortgage payments due to monthly mortgage payments received or mortgage
dispositions, (3) variations in the cash flow attributable to the delinquency or
default of Insured Mortgages and professional fees and foreclosure costs
incurred in connection with those Insured Mortgages and (4) variations in the
Partnership's operating expenses.
Net cash provided by operating activities decreased for the three
months ended March 31, 1998, as compared to the corresponding period in 1997,
primarily due to the decrease in net earnings, as discussed above. This decrease
was offset by interest received on the investment in a debenture. A portion of
the debenture interest is due to an affiliate, AIM 84, as discussed in note 4 of
the financial statements.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Continued
Net cash provided by investing activities increased for the three
months ended March 31, 1998, as compared to the corresponding period in 1997.
This increase is primarily due to more proceeds received in 1998 versus 1997,
from the disposition of mortgages, as discussed in Notes 3 and 5 of the
financial statements.
Net cash used in financing activities increased for the three months
ended March 31, 1998, as compared to the corresponding period in 1997. This
increase was due to the distribution of net proceeds received from the
disposition of mortgages, as discussed in Notes 3 and 5 of the financial
statements.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
No reports on Form 8-K were filed with the Securities and Exchange
Commission during the quarter ended March 31, 1998.
The exhibits filed as part of this report are listed below:
Exhibit No. Description
----------- -----------------------
27 Financial Data Schedule
<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 thereunto duly authorized.
AMERICAN INSURED MORTGAGE
INVESTORS L.P. - SERIES 85
(Registrant)
By: CRIIMI, Inc.
General Partner
May 13, 1998 /s/ Cynthia O. Azzara
- ----------------- -------------------------
DATE Cynthia O. Azzara
Principal Financial and
Accounting Officer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE QUARTERLY REPORT
ON FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH QUARTERLY REPORT ON FORM 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 12,715
<SECURITIES> 150,279
<RECEIVABLES> 30,185
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 193,179
<CURRENT-LIABILITIES> 14,919
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 178,260
<TOTAL-LIABILITY-AND-EQUITY> 193,179
<SALES> 0
<TOTAL-REVENUES> 3,963
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 563
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,400
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,400
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,400
<EPS-PRIMARY> .27
<EPS-DILUTED> 0
</TABLE>
