SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- -----
EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1997
------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- -----
EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 0-14351
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BALCOR REALTY INVESTORS 85-SERIES II
A REAL ESTATE LIMITED PARTNERSHIP
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Illinois 36-3327917
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2355 Waukegan Rd.
Bannockburn, Illinois 60015 60015
- ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 267-1600
---------------
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 (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
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<PAGE>
BALCOR REALTY INVESTORS - 85 SERIES II
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
ASSETS
1997 1996
-------------- --------------
Cash and cash equivalents $ 5,444,488 $ 12,457,760
Escrow deposits 82,469
Accounts and accrued interest receivable 502,365 532,365
Prepaid expenses 19,833
Deferred expenses, net of accumulated
amortization of $113,839 in 1996 140,314
-------------- --------------
5,946,853 13,232,741
-------------- --------------
Investment in real estate:
Land 1,436,769
Buildings and improvements 7,276,630
--------------
8,713,399
Less accumulated depreciation 3,438,330
--------------
Investment in real estate, net of
accumulated depreciation 5,275,069
-------------- --------------
$ 5,946,853 $ 18,507,810
============== ==============
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 81,070 $ 633,881
Due to affiliates 109,102 114,934
Security deposits 30,759
Mortgage note payable 7,249,433
-------------- --------------
Total liabilities 190,172 8,029,007
-------------- --------------
Commitments and contingencies
Limited Partners' capital (83,936
Interests issued and outstanding) 5,756,681 11,121,829
General Partner's deficit None (643,026)
-------------- --------------
Total partners' capital 5,756,681 10,478,803
-------------- --------------
$ 5,946,853 $ 18,507,810
============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS - 85 SERIES II
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended March 31, 1997 and 1996
(Unaudited)
1997 1996
-------------- --------------
Income:
Rental and service $ 441,199 $ 3,395,521
Interest on short-term investments 55,903 24,360
Participation in income of joint
venture with an affiliate 12,952
-------------- --------------
Total income 497,102 3,432,833
-------------- --------------
Expenses:
Interest on mortgage notes payable 167,177 1,180,772
Interest on short-term loans
from affiliate 192,031
Depreciation 51,564 471,496
Amortization of deferred expenses 7,943 52,577
Property operating 211,874 1,132,853
Real estate taxes (19,829) 222,234
Property management fees 24,335 169,109
Administrative 113,372 97,555
-------------- --------------
Total expenses 556,436 3,518,627
-------------- --------------
Loss before gain on sale of
property and extraordinary item (59,334) (85,794)
Gain on sale of property 4,992,080
-------------- --------------
Income (loss) before extraordinary item 4,932,746 (85,794)
Extraordinary item:
Debt extinguishment expense (421,908)
-------------- --------------
Net income (loss) $ 4,510,838 $ (85,794)
============== ==============
Income (loss) before extraordinary item
allocated to General Partner $ 703,170 $ (858)
============== ==============
Income (loss) before extraordinary item
allocated to Limited Partners $ 4,229,576 $ (84,936)
============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS - 85 SERIES II
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended March 31, 1997 and 1996
(Unaudited)
(Continued)
1997 1996
-------------- --------------
Income (loss) before extraordinary item
per Limited Partnership Interest (83,936
Interests issued and outstanding) $ 50.39 $ (1.01)
============== ==============
Extraordinary item allocated to General
Partner $ (60,144) None
============== ==============
Extraordinary item allocated to Limited
Partners $ (361,764) None
============== ==============
Extraordinary item per Limited
Partnership Interest (83,936 Interests
issued and outstanding) $ (4.31) None
============== ==============
Net income (loss) allocated to General
Partner $ 643,026 $ (858)
============== ==============
Net income (loss) allocated to Limited
Partners $ 3,867,812 $ (84,936)
============== ==============
Net income (loss) per Limited Partnership
Interest (83,936 Interests issued and
outstanding) $ 46.08 $ (1.01)
============== ==============
Distribution to Limited Partners $ 9,232,960 None
============== ==============
Distribution per Limited Partnership
Interest (83,936 Interests issued and
outstanding) $ 110.00 None
============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS - 85 SERIES II
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the quarters ended March 31, 1997 and 1996
(Unaudited)
1997 1996
-------------- --------------
Operating activities:
Net income (loss) $ 4,510,838 $ (85,794)
Adjustments to reconcile net income
(loss) to net cash (used in) provided
by operating activities:
Gain on sale of property (4,992,080)
Debt extinguishment expense 132,371
Participation in income of joint
venture with an affiliate (12,952)
Depreciation 51,564 471,496
Amortization of deferred expenses 7,943 52,577
Net change in:
Escrow deposits 82,469 81,769
Accounts and accrued interest
receivable 30,000 106,398
Prepaid expenses 19,833 104,634
Accounts payable (552,811) (3,165)
Due to affiliates (5,832) (90,727)
Accrued liabilities (202,349)
Security deposits (30,759) 1,264
-------------- --------------
Net cash (used in) provided by
operating activities (746,464) 423,151
-------------- --------------
Investing activities:
Distribution from joint venture with
an affiliate 19,122
Proceeds from sale of property 10,400,000
Payment of selling costs (184,415)
-------------- --------------
Net cash provided by investing activities 10,215,585 19,122
-------------- --------------
Financing activities:
Distribution to Limited Partners (9,232,960)
Repayment of mortgage note payable (7,238,418)
Principal payments on mortgage notes
payable (11,015) (108,368)
Release from repair escrows 41,492
-------------- --------------
Net cash used in financing activities (16,482,393) (66,876)
-------------- --------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS - 85 SERIES II
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the quarters ended March 31, 1997 and 1996
(Unaudited)
(Continued)
1997 1996
-------------- --------------
Net change in cash and cash equivalents (7,013,272) 375,397
Cash and cash equivalents at beginning
of period 12,457,760 1,125,457
-------------- --------------
Cash and cash equivalents at end of period $ 5,444,488 $ 1,500,854
============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS 85-SERIES II
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policies:
(a) In the opinion of management, all adjustments necessary for a fair
presentation have been made to the accompanying statements for the quarter
ended March 31, 1997, and all such adjustments are of a normal and recurring
nature.
(b) For financial statement purposes, in previous years partners were allocated
income and loss in accordance with the provisions in the Partnership Agreement.
In order for the capital accounts of the General Partner and Limited Partners
to appropriately reflect their respective remaining economic interests as
provided for in the Partnership Agreement, the General Partner was allocated
additional income in 1997 for financial statement purposes.
2. Partnership Termination:
The Partnership Agreement provides for the dissolution of the Partnership upon
the occurrence of certain events, including the disposition of all interests in
real estate. During 1996, the Partnership sold seven properties and its
minority joint venture interest in one additional property. During March 1997,
the Partnership sold its remaining property, the Steeplechase Apartments. The
available proceeds from the 1996 property sales were distributed to Limited
Partners in January and April 1997. The Partnership has retained a portion of
the cash to satisfy obligations of the Partnership as well as establish a
reserve for contingencies. The timing of the termination of the Partnership and
final distribution of cash will depend upon the nature and extent of
liabilities and contingencies which exist or may arise. Such contingencies may
include legal and other fees stemming from litigation involving the Partnership
including, but not limited to the lawsuits discussed in Note 7 of Notes to
Financial Statements. In the absence of any such contingency, the reserves will
be paid within twelve months of the last property being sold. In the event a
contingency arises, reserves may be held by the Partnership for a longer period
of time.
3. Interest Expense:
During the quarters ended March 31, 1997 and 1996, the Partnership incurred and
paid interest expense on non-affiliated mortgage notes payable of $167,177 and
$1,141,670, respectively.
4. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
quarter ended March 31, 1997 are:
Paid Payable
------------ ---------
Reimbursement of expenses to
the General Partner, at cost $13,895 $109,102
<PAGE>
The Partnership had a junior loan outstanding from The Balcor Company, an
affiliate of the General Partner, relating to the Chestnut Ridge - Phase I
Apartments. The loan of $1,816,035 along with accrued interest of $48,884 was
forgiven in connection with the sale of the property in September 1996. During
the quarter ended March 31, 1996, the Partnership incurred interest expense on
the mortgage note payable-affiliate of $39,102 and paid interest expense of
$19,954.
During 1996, the Partnership repaid the General Partner loan with proceeds
received from the sales of properties. During the quarter ended March 31, 1996,
the Partnership incurred interest expense of $192,031 and paid interest expense
of $300,000 on this loan. Interest expense on the General Partner loan was
computed at the American Express Company cost of funds rate plus a spread to
cover administrative costs.
5. Property Sale:
In March 1997, the Partnership sold the Steeplechase Apartments in an all cash
sale for $10,400,000. From the proceeds of the sale, the Partnership paid
$7,238,418 to the third party mortgage holder in full satisfaction of the first
mortgage loan, and paid $184,415 in selling costs and $289,537 in prepayment
penalties. The basis of the property was $5,223,505, which is net of
accumulated depreciation of $3,489,894. For financial statements purposes, the
Partnership recognized a gain of $4,992,080 from the sale of this property.
6. Extraordinary Item:
In connection with the sale of the Steeplechase Apartments in March 1997, the
Partnership paid $289,537 in prepayment penalties and wrote off the remaining
unamortized deferred financing fees related to the property of $132,371. These
amounts were recognized as an extraordinary item and classified as debt
extinguishment expense.
7. Contingencies:
The Partnership is currently involved in two lawsuits whereby the Partnership
and certain affiliates have been named as defendants alleging substantially
similar claims involving certain federal securities law violations with regard
to the adequacy and accuracy of disclosures of information concerning, as well
as marketing efforts related to the offering of the Limited Partnership
Interests of the Partnership. The defendants continue to vigorously contest
these actions. A plaintiff class has not been certified in either action and,
no determinations of the merits have been made. It is not determinable at this
time whether or not an unfavorable decision in either action would have a
material adverse impact on the financial position, operations and liquidity of
the Partnership. The Partnership believes that it has meritorious defenses to
contest the claims.
8. Subsequent Event:
In April 1997, the Partnership made a distribution of $1,175,104 ($14.00 per
Interest) to Limited Partners representing a special distribution of remaining
available Net Cash Proceeds from the 1996 property sales.
<PAGE>
BALCOR REALTY INVESTORS 85-SERIES II
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Realty Investors 85-Series II (the "Partnership") was formed in 1984 to
invest in and operate real property. The Partnership raised $83,936,000 through
the sale of Limited Partnership Interests and utilized these proceeds to
acquire thirteen real property investments and a minority joint venture
interest in one additional real property. Prior to 1996, the Partnership
disposed of five` of these properties. During 1996, the Partnership sold seven
properties and the property in which it held a minority joint venture interest.
The Partnership sold its remaining property, the Steeplechase Apartments, in
March 1997.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1996 for a more complete understanding of
the Partnership's financial position.
Operations
- ----------
Summary of Operations
- ---------------------
During 1997, the Partnership recognized a gain in connection with the sale of
the Steeplechase Apartments, which was the primary reason the Partnership
recognized net income during the quarter ended March 31, 1997 as compared to a
net loss during the same period in 1996. Further discussion of the
Partnership's operations is summarized below.
1997 Compared to 1996
- ---------------------
Discussions of fluctuations between 1997 and 1996 refer to the quarters ended
March 31, 1997 and 1996.
During 1996, the Partnership sold seven properties. As a result of the 1996
property sales, rental and service income, interest expense on mortgage notes
payable, depreciation, amortization of deferred expenses, property operating
and property management fees decreased during 1997 as compared to 1996.
Due to higher average cash balances resulting from net proceeds received in
connection with the 1996 property sales prior to distribution to Limited
Partners in January and April 1997, interest income on short-term investments
increased during 1997 as compared to 1996.
Rosehill Pointe Apartments, in which the Partnership held a minority joint
venture interest, was sold during June 1996. As a result, income from
participation in joint venture with an affiliate ceased during 1996.
<PAGE>
During 1996, the Partnership repaid its General Partner loans. As a result,
interest expense on short-term loans from affiliate ceased during 1996.
As a result of the 1996 property sales, real estate tax expense decreased in
1997. In addition, the estimate of 1996 real estate taxes at the Steeplechase
Apartments was higher than the actual expense, resulting in the Partnership
recognizing income during 1997 as compared to an expense in 1996.
Higher accounting and professional fees resulted in an increase in
administrative expenses of approximately $42,000 during 1997 as compared to
1996. However, during 1996, the Partnership incurred additional portfolio
management and legal fees of approximately $26,000 related to the 1996 property
sales, which partially offset this increase.
In March 1997, the Partnership sold the Steeplechase Apartments and recognized
a gain of $4,992,080.
In connection with the March 1997 sale of the Steeplechase Apartments, the
Partnership paid $289,537 in prepayment penalties and wrote off the remaining
unamortized deferred financing fees related to the property of $132,371. These
amounts were recognized as an extraordinary item and classified as debt
extinguishment expense.
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership decreased by approximately $7,013,000 as
of March 31, 1997 when compared to December 31, 1996 primarily due to the
January 1997 payment of a special distribution to Limited Partners of proceeds
from the 1996 property sales. Cash of approximately $746,000 was used in
operating activities which consisted of the payment of administrative expenses
and expenses related to sold properties, which were partially offset by cash
flow from operations of the Steeplechase Apartments prior to its sale and
interest income on short-term investments. Cash provided by investing
activities of approximately $10,216,000 consisted of net proceeds received in
connection with the sale of the Steeplechase Apartments. Net cash used in
financing activities of approximately $16,482,000 consisted primarily of the
payment of a distribution to Limited Partners of approximately $9,233,000 and
the repayment of a mortgage note payable of approximately $7,238,000 with
proceeds from the Steeplechase Apartments sale. In April 1997, the Partnership
made a special distribution from sales proceeds to Limited Partners as
discussed below.
During 1996, the Partnership sold seven properties and its minority joint
venture interest in one additional property. During March 1997, the Partnership
sold its remaining property, the Steeplechase Apartments. The available
proceeds from the 1996 property sales were distributed to Limited Partners in
January and April 1997. The Partnership has retained a portion of the cash to
satisfy obligations of the Partnership as well as establish a reserve for
contingencies. The timing of the termination of the Partnership and final
distribution of cash will depend upon the nature and extent of liabilities and
contingencies which exist or may arise. Such contingencies may include legal
<PAGE>
and other fees stemming from litigation involving the Partnership including,
but not limited to the lawsuits discussed in Note 7 of Notes to Financial
Statements. In the absence of any such contingency, the reserves will be paid
within twelve months of the last property being sold. In the event a
contingency arises, reserves may be held by the Partnership for a longer period
of time.
In March 1997, the Partnership sold the Steeplechase Apartments in an all cash
sale for $10,400,000. From the proceeds of the sale, the Partnership paid
$7,238,418 to the third party mortgage holder in full satisfaction of the first
mortgage loan, and paid $184,415 in selling costs and $289,537 in prepayment
penalties. Available proceeds are expected to be distributed to the Limited
Partners in July 1997. See Note 5 of Notes to Financial Statements for
additional information.
Pursuant to the sale agreement for the Hunters Glen Apartments, $500,000 of the
sale proceeds was retained by the Partnership and was unavailable for
distribution until January 1997, at which time the funds were released to the
Partnership.
Pursuant to the sale agreement for the Marbrisa Apartments, $500,000 of the
sale proceeds was retained by the Partnership and was unavailable for
distribution until February 1997, at which time the funds were released to the
Partnership.
Pursuant to the sale agreement for the Willow Bend Lake Apartments, $250,000 of
the sale proceeds was retained by the Partnership and was unavailable for
distribution until February 1997, at which time the funds were released to the
Partnership.
In April 1997, the Partnership made a distribution of $1,175,104 ($14.00 per
Interest) to the holders of Limited Partnership Interests representing a
special distribution of remaining available Net Cash Proceeds from the 1996
property sales. Including the April 1997 distribution, Limited Partners have
received cash distributions of Net Cash Proceeds of $124 per $1,000 Interest,
as well as certain tax benefits. The Partnership is expected to distribute the
available proceeds from the sale of Steeplechase Apartments in July 1997.
Investors will not recover a substantial portion of their original investment.
<PAGE>
BALCOR REALTY INVESTORS 85 - SERIES II
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 5. Other Information
- --------------------------
Steeplechase Apartments
- -----------------------
As previously reported, on November 20, 1996, the Partnership contracted to
sell Steeplechase Apartments, Lexington-Fayette, Kentucky, to an unaffiliated
party, Infinity Acquisitions, L.L.C., an Illinois limited liability company.
The sale closed on March 31, 1997. The purchaser elected not to assume the
first mortgage loan collateralized by the property and, pursuant to the
agreement of sale, the sale price was increased to $10,400,000. From the
proceeds of the sale, the Partnership repaid the outstanding balance of the
first mortgage loan of $7,238,418 and paid $289,537 as a prepayment penalty,
$156,000 to an affiliate of the third party providing property management
services for the property as a brokerage commission and $28,415 in closing
costs. The Partnership received the remaining proceeds of $2,687,630.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits:
(4) Subscription Agreement set forth as Exhibit 4.1 to Amendment No. 1 to the
Registrant's Registration Statement on Form S-11 dated March 12, 1985
(Registration No. 2-95000) and Form of Confirmation regarding Interests in the
Registrant set forth as Exhibit 4.2 to the Registrant's Report on Form 10-Q for
the quarter ended June 30, 1992 are incorporated herein by reference.
(10) Material Contracts:
(a)(i) Agreement of Sale and attachment thereto relating to the sale of the
Forest Ridge - Phase II apartment complex, Arlington, Texas previously filed as
Exhibit 2 to the Registrant's Report on Form 8-K dated April 23, 1996 is
incorporated herein by reference.
(ii) Master Amendment and Agreement relating to the sales of the Forest Ridge -
Phase II, apartment complex, Arlington, Texas and Rosehill Pointe apartment
complex, Lenexa, Kansas previously filed as Exhibit 2(b)(i) to the Registrant's
Report on Form 8-K dated May 31, 1996 is incorporated herein by reference.
(iii) Master Amendment and Agreement #2 dated May 22, 1996 relating to the
sales of the Forest Ridge - Phase II, apartment complex, Arlington, Texas and
Rosehill Pointe apartment complex, Lenexa, Kansas previously filed as Exhibit
2(b)(ii) to the Registrant's Report on Form 8-K dated May 31, 1996 is
incorporated herein by reference.
<PAGE>
(b)(i) Agreement of Sale relating to the sale of the Hunter's Glen Apartments,
St. Louis County, Missouri previously filed as Exhibit 2(a) to the Registrant's
Report on Form 8-K dated June 28, 1996 is incorporated herein by reference.
(ii) Letter Agreement dated June 28, 1996, relating to the sale of Hunter's
Glen apartment complex, St. Louis County, Missouri, previously filed as Exhibit
99 to the Registrant's Report on Form 8-K dated July 15, 1996 is incorporated
herein by reference.
(iii) Letter Agreement dated August 2, 1996, relating to the sale of Hunter's
Glen apartment complex, St. Louis County, Missouri previously filed as Exhibit
10(b)(iii) to the Registrant's Report on Form 10-Q for the quarter ended June
30, 1996 is incorporated herein by reference.
(iv) Letter Agreement dated August 16, 1996 relating to the sale of Hunter's
Glen Apartments previously filed as Exhibit (99)(d) to the Registrant's Report
on Form 8-K dated August 16, 1996 is incorporated herein by reference.
(c)(i) Agreement of Sale and attachment thereto relating to the sale of Willow
Bend Lake Apartments, East Baton Rouge Parish, Louisiana previously filed as
Exhibit 2 to the Registrant's Report on Form 8-K dated September 30, 1996 is
incorporated herein by reference.
(ii) First Amendment to Agreement of Sale and Escrow Agreement relating to the
sale of Willow Bend Lake Apartments, East Baton Rouge Parish, Louisiana,
previously filed as Exhibit (10)(c)(ii) to the Registrant's Report on Form 10-K
for the year ended December 31, 1996 is incorporated herein by reference.
(iii) Second Amendment to Agreement of Sale and Escrow Agreement relating to
the sale of Willow Bend Lake Apartments, East Baton Rouge Parish, Louisiana,
previously filed as Exhibit (10)(c)(iii) to the Registrant's Report on Form
10-K for the year ended December 31, 1996 is incorporated herein by reference.
(d)(i) Agreement of Sale and letter agreements thereto relating to the sale of
Marbrisa apartment complex, Hillsborough County, Florida previously filed as
Exhibit 2(a) to the Registrant's Report on Form 8-K dated July 15, 1996 is
incorporated herein by reference.
(ii) First Amendment to Agreement of Sale dated August 16, 1996 relating to the
sale of Marbrisa Apartments, Hillsborough County, Florida, previously filed as
Exhibit (99)(a)(i) to the Registrant's Report on Form 8-K dated August 16, 1996
is incorporated herein by reference.
(iii) Letter Agreement dated August 20, 1996 relating to the sale of Marbrisa
Apartments, Hillsborough County, Florida, previously filed as Exhibit
(99)(a)(ii) to the Registrant's Report on Form 8-K dated August 16, 1996 is
incorporated herein by reference.
(iv) Letter Agreements relating to the sale of Marbrisa Apartments,
Hillsborough County, Florida, previously filed as Exhibit (99)(b) to the
Registrant's Report on Form 8-K dated September 30, 1996 is incorporated herein
by reference.
<PAGE>
(e)(i) Agreement of Sale dated September 3, 1996 relating to the sale of
Chestnut Ridge - Phase I Apartments, Fort Worth, Texas previously filed as
Exhibit 2 to the Registrant's Report on Form 8-K dated August 16, 1996 is
incorporated herein by reference.
(ii) Letter Agreement relating to the sale of Chestnut Ridge - Phase I
Apartments, Fort Worth, Texas, previously filed as Exhibit (99)(a) to the
Registrant's Report on Form 8-K dated September 30, 1996 is incorporated herein
by reference.
(f)(i) Agreement of Sale and attachment thereto relating to the sale of Park
Crossing Apartments, Gwinnett County, Georgia previously filed as Exhibit 2(a)
to the Registrant's Report on Form 8-K dated September 16, 1996 is incorporated
herein by reference.
(ii) First Amendment to Agreement of Sale relating to the Sale of Park Crossing
Apartments, Gwinnett County, Georgia previously filed as Exhibit 2(b) to the
Registrant's Report on Form 8-K dated September 16, 1996 is incorporated herein
by reference.
(iii) Letter relating to the sale of Park Crossing Apartments, Gwinnett County,
Georgia previously filed as Exhibit 2(c) to the Registrant's Report on Form 8-K
dated September 16, 1996 is incorporated herein by reference.
(g)(i) Agreement of Sale and attachment hereto relating to the sale of
Steeplechase Apartments, Lexington-Fayette, Kentucky previously filed as
Exhibit (2)(i) to the Registrant's Report on Form 8-K dated December 20, 1996,
is incorporated herein by reference.
(ii) Due Diligence Termination Notice relating to the sale of Steeplechase
Apartments, Lexington-Fayette, Kentucky previously filed as Exhibit (2)(ii) to
the Registrant's Report on Form 8-K dated December 20, 1996, is incorporated
herein by reference.
(iii) Reinstatement of, and First Amendment to, Agreement of Sale, relating to
the sale of Steeplechase Apartments, Lexington-Fayette, Kentucky previously
filed as Exhibit (2)(iii) to the Registrant's Report on Form 8-K dated December
20, 1996, is incorporated herein by reference.
(iv) Letter Agreement dated December 20, 1996, relating to the sale of
Steeplechase Apartments, Lexington-Fayette, Kentucky, previously filed as
Exhibit (2)(iv) to the Registrant's Report on Form 8-K dated December 20, 1996,
is incorporated herein by reference.
(v) Letter Agreement dated January 22, 1997, relating to the sale of
Steeplechase Apartments, Lexington-Fayette, Kentucky, previously filed as
Exhibit (10)(g)(v) to the Registrant's Report on Form 10-K for the year ended
December 31, 1996 is incorporated herein by reference.
(27) Financial Data Schedule of the Registrant for the quarter ending March 31,
1997 is attached hereto.
(b) Reports on Form 8-K: A Current Report on Form 8-K dated December 20, 1996
was filed reporting a contract to sell Steeplechase Apartments located in
Lexington-Fayette, Kentucky.
<PAGE>
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.
BALCOR REALTY INVESTORS 85-SERIES II
A REAL ESTATE LIMITED PARTNERSHIP
By:/s/Thomas E. Meador
---------------------------------
Thomas E. Meador
President and Chief Executive Officer (Principal
Executive Officer) of Balcor Partners - XVII,
the General Partner
By:/s/Jayne A. Kosik
----------------------------------
Jayne A. Kosik
Managing Director and Chief Financial Officer
(Principal Accounting Officer) of Balcor
Partners - XVII, the General Partner
Date: May 14, 1997
------------
<PAGE>
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 5445
<SECURITIES> 0
<RECEIVABLES> 502
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5947
<PP&E> 0
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<TOTAL-ASSETS> 5947
<CURRENT-LIABILITIES> 190
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5757
<TOTAL-LIABILITY-AND-EQUITY> 5947
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<TOTAL-REVENUES> 5489
<CGS> 0
<TOTAL-COSTS> 216
<OTHER-EXPENSES> 173
<LOSS-PROVISION> 0
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<INCOME-PRETAX> 4933
<INCOME-TAX> 0
<INCOME-CONTINUING> 4933
<DISCONTINUED> 0
<EXTRAORDINARY> (422)
<CHANGES> 0
<NET-INCOME> 4511
<EPS-PRIMARY> 46.08
<EPS-DILUTED> 46.08
</TABLE>
