UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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
2-99673
LINCAM PROPERTIES LTD. SERIES 85
(Exact name of registrant as specified in charter)
Illinois 36-3377785
(State of Organization) (I.R.S. Employer Identification No.)
125 South Wacker Drive, Suite 3100, Chicago, Illinois 60606
(Address of principal executive office)
Registrants's telephone number, including area code: (312) 443-1477
Indicate by check ( X ) 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>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LINCAM PROPERTIES LTD. SERIES 85
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(UNAUDITED)
ASSETS
------
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
-------------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . $ 516,746 350,073
Prepaid expenses and other. . . . . . . . . . . . . . . . . . . . . . 1,958 1,944
------------ ----------
Total current assets. . . . . . . . . . . . . . . . . . . . . 518,704 352,017
------------ ----------
Investment properties, at cost (note 2):
Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 816,616
Buildings and improvements. . . . . . . . . . . . . . . . . . . . . . -- 5,702,499
------------ ----------
-- 6,519,115
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . -- (1,908,341)
------------ ----------
Total investment properties, net of accumulated depreciation. -- 4,610,774
Property held for sale, at lower of depreciated cost
or estimated value (notes 1 and 2). . . . . . . . . . . . . . . . . . 2,509,548 --
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,539 13,342
------------ ----------
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . $ 3,042,791 4,976,133
============ ===========
<PAGE>
LINCAM PROPERTIES LTD. SERIES 85
(A LIMITED PARTNERSHIP)
BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL (DEFICITS)
--------------------------------------------
SEPTEMBER 30, DECEMBER 31,
1997 1996
-------------- ------------
Current liabilities:
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 35,750 44,411
Accrued expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 3,323 1,943
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . 29,955 146,250
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . 14,539 21,154
------------ ----------
Total current liabilities . . . . . . . . . . . . . . . . . . 83,567 213,758
------------ ----------
Partners' capital (deficits) (note 1):
General Partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . . 2,000 2,000
Allocated portion of cumulative net income. . . . . . . . . . . . . 106,737 105,817
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (301,961) (283,009)
------------ ----------
(193,224) (175,192)
------------ ----------
Limited Partners:
Interests of $1,000. Authorized 40,001 Interests;
issued and outstanding 25,016 Interests . . . . . . . . . . . . . 22,479,645 22,479,645
Allocated portion of cumulative net income. . . . . . . . . . . . . 10,623,078 10,531,997
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (29,950,275) (28,074,075)
------------ ----------
3,152,448 4,937,567
------------ ----------
Total partners' capital . . . . . . . . . . . . . . . . . . . 2,959,224 4,762,375
------------ ----------
Total liabilities and partners' capital . . . . . . . . . . . $ 3,042,791 4,976,133
============ ==========
</TABLE>
<PAGE>
<TABLE>
LINCAM PROPERTIES LTD. SERIES 85
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------- --------------------------
1997 1996 1997 1996
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . . . $ 183,206 149,802 550,788 736,882
Charges to tenants. . . . . . . . . . . . . . . 29,694 23,031 109,065 103,287
Interest income . . . . . . . . . . . . . . . . 15,991 90,755 24,174 307,160
Other income. . . . . . . . . . . . . . . . . . 5,748 6,083 18,457 17,038
----------- ---------- ---------- ----------
Total income. . . . . . . . . . . . . . 234,639 269,671 702,484 1,164,367
----------- ---------- ---------- ----------
Expenses:
Property operating expenses . . . . . . . . . . 112,987 123,023 350,925 381,714
Depreciation. . . . . . . . . . . . . . . . . . -- 43,707 44,127 170,001
Management fees paid to the
General Partner . . . . . . . . . . . . . . . 9,913 9,347 29,731 37,840
Professional services . . . . . . . . . . . . . 13,372 13,522 37,418 41,180
General and administrative. . . . . . . . . . . 22,276 19,294 68,663 56,499
Provision for loss on sale
of investment property. . . . . . . . . . . . 19,619 10,534 79,619 180,534
----------- ---------- ---------- ----------
Total expenses. . . . . . . . . . . . . 178,167 219,427 610,483 867,768
----------- ---------- ---------- ----------
Operating income. . . . . . . . . . . . 56,472 50,244 92,001 296,599
----------- ---------- ---------- ----------
Net income. . . . . . . . . . . . . . . $ 56,472 50,244 92,001 296,599
=========== ========== ========== ==========
Net income per limited
partnership unit. . . . . . . . . . . $ 2.23 1.99 3.64 11.74
=========== ========== ========== ==========
Cash distributions per limited
partnership interest. . . . . . . . . $ 75.00 15.00 75.00 45.00
=========== ========== ========== ==========
</TABLE>
<PAGE>
<TABLE>
LINCAM PROPERTIES LTD. SERIES 85
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
1997 1996
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 92,001 296,599
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for loss on sale of investment property . . . . . . . . . . . 79,619 180,534
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,127 170,001
Changes in assets and liabilities:
Increase in prepaid expenses and other current assets . . . . . . . . (14) (2,725)
Decrease in receivable from tenant. . . . . . . . . . . . . . . . . . -- 66,695
(Increase) decrease in other assets . . . . . . . . . . . . . . . . . (1,197) 36,615
Decrease in accounts receivable . . . . . . . . . . . . . . . . . . . -- 9,694
Decrease in accounts payable. . . . . . . . . . . . . . . . . . . . . (8,661) --
Increase in accrued expenses. . . . . . . . . . . . . . . . . . . . . 1,380 --
Decrease in funds held for others . . . . . . . . . . . . . . . . . . -- (150,879)
Increase (decrease) in accrued real estate taxes. . . . . . . . . . . (116,295) 22,007
Decrease in tenant security deposits. . . . . . . . . . . . . . . . . (6,615) (10,694)
----------- -----------
Total adjustments . . . . . . . . . . . . . . . . . . . . . . . . (7,656) 321,248
----------- -----------
Net cash provided by operating activities . . . . . . . . . . . . 84,345 617,847
----------- -----------
Cash flows from investing activities:
Additions to buildings and improvements . . . . . . . . . . . . . . . . . (17,651) (8,524)
Net cash proceeds from sale of investment property. . . . . . . . . . . . 1,995,131 6,239,950
Collection of note receivable . . . . . . . . . . . . . . . . . . . . . . -- 5,485,000
Recovery of cost of property held for sale. . . . . . . . . . . . . . . . -- 373,030
----------- -----------
Net cash provided by investing activities . . . . . . . . . . . . 1,977,480 12,089,456
----------- -----------
<PAGE>
LINCAM PROPERTIES LTD. SERIES 85
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS - CONTINUED
1997 1996
------------ -----------
Cash flows for financing activities:
Cash distributions to Limited Partners. . . . . . . . . . . . . . . . . . (1,876,200) (1,125,720)
Cash distributions to General Partners. . . . . . . . . . . . . . . . . . (18,952) (11,371)
----------- -----------
Net cash used in financing activities . . . . . . . . . . . . . . (1,895,152) (1,137,091)
----------- -----------
Net increase in cash and cash equivalents . . . . . . . . . . . . . . . . . 166,673 11,570,212
Cash and cash equivalents at beginning of period. . . . . . . . . . . . . . 350,073 507,111
----------- -----------
Cash and cash equivalents at end of period. . . . . . . . . . . . . . . . . $ 516,746 12,077,323
=========== ===========
</TABLE>
<PAGE>
LINCAM PROPERTIES LTD. SERIES 85
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1996,
which are included in the Partnership's 1996 Annual Report, as certain
footnote disclosures which would substantially duplicate those contained in
such audited financial statements have been omitted from this report.
(1) ORGANIZATION AND BASIS OF ACCOUNTING
LincAm Properties Ltd. Series 85 (the "Partnership") is a limited
partnership formed in August 1985 under the Uniform Limited Partnership Act
of the State of Illinois. The balance sheets at September 30, 1997 and
December 31, 1996 and the statements of operations and cash flows for the
three and nine months ended September 30, 1997 and 1996 have been prepared
by Management of the Partnership and have not been audited by the
Partnership's independent auditors.
For purposes of reporting cash flows, cash and cash equivalents include
an investment in a money market account and other investments (having daily
availability) at cost which approximates market.
The Partnership records are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying financial statements have been prepared from such records
after making appropriate adjustments to reflect the Partnership's accounts
in accordance with generally accepted accounting principles (GAAP). Such
adjustments are not recorded on the records of the Partnership. The net
effect of these items is summarized below:
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 1997 SEPTEMBER 30, 1996
----------------------- ----------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
---------- --------- ---------- ---------
Total assets. . . . .$3,042,791 2,976,061 16,739,602 16,755,743
Partners' capital
(deficits):
General Partners. .$ (193,224) (232,088) (57,432) (140,978)
Limited Partners. .$3,152,448 3,174,345 16,595,910 16,829,175
Net income
General Partners. .$ 920 623 2,966 19,616
Limited Partners. .$ 91,081 61,647 293,633 1,941,965
Net income per
limited partner-
ship interest. . . $ 3.64 2.46 11.74 77.63
========== ========= ========== ==========
The net income and cash distributions per limited partnership interest,
as presented for the nine month period ended September 30, 1997 and 1996
are based upon the limited partnership interests outstanding at the end of
the periods (25,016).
<PAGE>
No provision for Federal income taxes has been made as any liability,
for such taxes, is that of the partners rather than the Partnership.
Management of the Partnership has made a number of estimates and
assumptions relating to the reporting of assets and liabilities and the
disclosure of contingent assets and liabilities to prepare these financial
statements in conformity with generally accepted accounting principles.
Actual results could differ from those estimates.
On January 1, 1996, the Partnership adopted Statement of Financial
Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", which
changes the Partnership's current method of accounting for its real estate
property investments when circumstances indicate that carrying amount of
the property may not be recoverable. Properties held for sale will
continue to be reflected at the lower of historical cost or estimated fair
value less anticipated selling costs. In addition, properties held for
sale will no longer be depreciated.
Losses in carrying values of investment assets are provided by
management when the losses become apparent and the investment asset is
considered impaired. Management evaluates its investment properties at
least quarterly to assess whether any impairment indications are present,
comparing undiscounted future cash flows with the carrying amount of the
asset. If any investment asset is considered impaired, a loss is provided
to reduce the carrying value of the property to its estimated value.
The 5521 Meadowbrook Court Distribution Center was sold in August,
1997. In anticipation of the sale, the Partnership, in March 1997, made a
provision for loss of $60,000 to reduce the carrying amount of the property
to its estimated value. Management believes that no other assets are
impaired; therefore, no other such losses have been required to be
recognized or provided for in the accompanying financial statements.
(2) INVESTMENT PROPERTIES
(A) GENERAL
During the years 1986 through 1988, the Partnership acquired, either
directly or through a joint venture (Note 3), three apartment complexes, a
distribution center, and a warehouse/research facility. One apartment
complex was sold in 1993. Another apartment complex acquired through the
joint venture was sold in 1995. The warehouse/research facility was sold
in September, 1996, and the distribution center was sold in August, 1997.
Depreciation on the investment properties acquired has been provided
over the estimated useful lives of five to forty years using the straight-
line method.
Maintenance and repair expenses are charged to operations as
incurred. Expenditures which materially add to the value or utility of the
property or appreciably prolong its useful life are capitalized and
depreciated over their estimated useful lives.
<PAGE>
(B) OAK VIEW APARTMENTS
On September 30, 1986, the Partnership acquired the Oak View
Apartments, a recently constructed 124 unit apartment complex located in
the Augusta, Georgia metropolitan area, and title to the approximately
twenty acre parcel of land on which the complex is situated.
The Partnership's purchase price was $3,604,460, excluding closing
costs, fees, reserves and prorations, and was determined by arm's-length
negotiations.
An affiliate of the General Partners manages the apartment complex
for a fee equal to 5% of the gross revenue of the property.
(C) 5521 MEADOWBROOK COURT DISTRIBUTION CENTER
On January 12, 1987, the Partnership acquired for $2,492,500 an
approximately 50,000 square foot distribution center and the approximately
110,000 square foot parcel of land on which the building is situated. The
property is located at 5521 Meadowbrook Court in Rolling Meadows, Illinois,
and had been leased to Komori America, Inc. since February 11, 1991.
Komori America, Inc.'s lease expired on May 31, 1996 at which time they
vacated the 50% of the distribution center they had occupied.
On January 11, 1994, the Partnership leased 25,000 square feet of
the distribution center to Samsung America, Inc. The thirty-eight month
lease commenced March 6, 1994 and provided for an annual base rent of $3.75
per square foot in year one. The terms of the lease provide for three
percent annual increases in the base rent. The terms of the lease also
provide that the tenant be responsible for their proportionate share of all
operating expenses, including real estate taxes, during the term of the
lease. On November 29, 1996, the tenant amended the lease to occupy an
additional 25,000 square feet and to extend the term of the lease until
July 31, 2002. Effective March 1, 1997, the tenant occupies the entire
distribution center and is responsible for all operating expenses including
insurance and real estate taxes during the term of the lease.
An affiliate of the General Partners managed the distribution center
for a fee equal to 3% of the gross revenue of the property.
On August 6, 1997, the Partnership sold this facility and the land
on which the building is situated for $2,150,000 in an all cash
transaction. The Partnership received $1,870,720 after closing costs,
prorations and commissions. On September 5, 1997, the Partnership made a
special distribution of $75 per limited partnership interest to its
partners.
(D) WALKER'S MARK APARTMENTS
On July 29, 1987, the Partnership acquired for $5,950,000 the
Walker's Mark Apartments, a 164 unit apartment complex located in Dallas,
Texas, and title to the approximately seven acre parcel of land on which
the complex is situated.
<PAGE>
On August 19, 1993, the Partnership sold this apartment complex for
$6,585,000. The Partnership received $911,617 in cash (after closing costs
and commissions) and a note receivable for $5,485,000 which is secured by a
first mortgage on the property. Through June, 1996 the Partnership
received monthly payments of interest only, at an annual rate of 7.5% with
the note balance due October 1, 1997. Pursuant to the note agreement the
buyer was required to deposit with the seller monthly payments for real
estate taxes.
On July 2, 1996, the buyer prepaid the note. The Partnership
distributed the proceeds from collection of this note on October 1, 1996.
(E) 1880 COUNTRY FARM DRIVE FACILITY
On July 1, 1988, the Partnership acquired a recently completed,
approximately 162,000 square foot office and warehouse/research facility
and title to the approximately 354,000 square foot parcel of land on which
the building is situated. The property is located at 1880 Country Farm
Drive in Naperville, Illinois, and is leased to Babson Bros. for a ten-year
lease term commencing September, 1987. Babson Bros. Co. has two 5-year
options to renew its lease at market rates.
The Partnership's purchase price was $7,840,000 excluding closing
costs, fees, reserves and prorations, and was determined by arm's-length
negotiations.
An affiliate of the General Partners managed the property for a fee
equal to 1% of the gross revenue of the property.
On September 20, 1996, the Partnership sold this facility and the
land on which the building is situated for $6,575,000 in an all cash
transaction. The Partnership received $6,239,950 after closing costs and
commissions. The Partnership used these proceeds and the proceeds from the
collection of the $5,485,000 note from the sale of the Walker's Mark
Apartments to make a special distribution of $450 per limited partnership
interest on October 1, 1996.
(3) TRANSACTIONS WITH AFFILIATES
Fees, commissions and other expenses required to be paid by the
Partnership to the Corporate General Partner and its affiliates as of and
for the nine months ended September 30, 1997 and 1996 are summarized as
follows:
NINE MONTHS ENDED
SEPTEMBER 30, UNPAID AT
-------------------- SEPTEMBER 30,
1997 1996 1997
------- ------- -------------
Property management fees . . $29,731 37,840 505
Reimbursement (at cost) for:
Out-of-Pocket expenses. . . $61,216 54,649 --
======= ====== ====
(4) ADJUSTMENTS
In the opinion of the Corporate General Partner, all adjustments
necessary for a fair presentation have been made to the accompanying
amounts as of September 30, 1997 and 1996 and for the nine month periods
ended September 30, 1997 and 1996.
<PAGE>
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
On October 23, 1985, the Partnership commenced an offering of $25,000,000
(subject to increase by up to $15,000,000) of Limited Partnership Interests
pursuant to a Registration Statement on Form S-11 under the Securities Act
of 1933. The offering of Limited Partnership Interests terminated April
15, 1986. A total of 25,015 Interests were assigned to the public between
October 23, 1985 and May 16, 1986.
After deducting selling expenses and other offering costs, the Partnership
had approximately $22,500,000 with which to make investments in income-
producing commercial and residential real property, to pay legal fees and
other costs (including acquisition fees) related to such investments and to
satisfy working capital requirements. A portion of the proceeds was
utilized to acquire the properties owned by the Partnership at September
30, 1997.
At September 30, 1997, the Partnership had cash of $41,638 and short-term
investments in asset management accounts of $475,108, which will be
utilized for distributions to partners and for working capital
requirements.
At September 30, 1997, the Partnership has total current assets of $518,704
and current liabilities of $83,567 and a current ratio of 6.21. Including
a special distribution of the net proceeds from (1) the sale of 1880
Country Farm Road Facility and (2) the collection of the note receivable
equal to $450 per Limited Partnership Interest, cash distributions
increased to $510 per Limited Partnership in 1996. The Partnership will be
making future distributions as its two remaining properties are sold.
On August 6, 1997, the Partnership sold the 5521 Meadowbrook Court
Distribution Center for $2,150,000 in an all cash transaction. As
described in Note 2(c) of Notes to Financial Statements, the Partnership
received $1,870,720 (net of closing costs). The net proceeds were
distributed to the partners via a special distribution of $75 per Limited
Partnership Interest in September, 1997.
On September 20, 1996, the Partnership sold the 1880 Country Farm Drive
facility for $6,575,000 in an all cash transaction. As described in Note
2(E) of Notes to Financial Statements, the Partnership received $6,239,950
(net of closing costs). The Partnership distributed the majority of these
proceeds to the partners via a special distribution on October 1, 1996.
On July 2, 1996 the note receivable was prepaid. The Partnership
distributed the proceeds from the collection of this note on October 1,
1996.
The Corporate General Partner is continuing to explore selling its
remaining property.
RESULTS OF OPERATIONS
At September 30, 1997, the Partnership owned one investment property,
consisting of an apartment complex located near Augusta, Georgia.
The decrease in rental income for the nine months ended September 30, 1997
compared to 1996 of approximately $186,100 (25.3%) is primarily due to:
1) no rental income generated at 1880 Country Farm Drive Facility
($183,300) due to its being sold in September, 1996; and 2) less rental
income at the Meadowbrook Court Distribution Center ($18,800) primarily due
to lower occupancy in January and February, 1997. These decreases were
partially offset by an increase in rental income at Oak View Apartments
($16,000) due to an increase in occupancy in the third quarter.
<PAGE>
Changes to tenants have remained essentially flat for the nine months ended
September 30, 1997 as compared to 1996.
Interest income decreased approximately $283,000 for the nine months ended
September 30, 1997 compared to 1996. This decrease is primarily
attributable to early repayment of the note receivable in July 1996.
Other income increased approximately $1,420 (8.3%) for the nine months
ended September 30, 1997 as compared to 1996. This increase is primarily
due to an increase in tenant services and charges at Oak View Apartments.
Property operating expenses decreased approximately $30,800 (8.1%) for the
nine months ended September 30, 1997 compared to 1996. This decrease was
primarily due to decreases in property operating expenses at Oak View
Apartments (approximately $6,300) and at Meadowbrook Court Distribution
Center (approximately $17,500).
The decrease in depreciation expense of approximately $125,900 (74.0%) for
the nine months ended September 30, 1997 compared to 1996 is primarily
attributable to: 1) no depreciation recorded on the 1880 Country Farm Drive
Facility due to its being sold in 1996 (approximately $39,500); 2) less
depreciation charged at the Meadowbrook Court Distribution Center
(approximately $62,200) due to the estimated fair value accounting in
accordance with SFAS No. 121; and 3) less depreciation charged at Oakview
Apartments (approximately $24,200) also due to the estimated fair value
accounting in accordance with SFAS No. 121.
Management fees paid to an affiliate of the General Partner decreased
approximately $8,100 (21.4%) for the nine months ended September 30, 1997
as compared to 1996. This decrease is primarily attributable to 1) the
sale of 1880 Country Farm Drive Facility (approximately $2,000); and 2)
less rental income at Meadowbrook Court Distribution Center
(approximately $7,000).
Professional services decreased approximately $3,800 (9.1%) for the nine
months ended September 30, 1997 as compared to 1996. This decrease is
primarily due to a decrease in tax and audit fees incurred by the
Partnership.
General and administration expenses increased approximately $12,200 (21.5%)
for the nine months ended September 30, 1997 as compared to 1996. This
increase is primarily due to: 1) an increase in costs incurred for mandated
electronic filings of reports with the Securities and Exchange Commission
(approximately $4,600) and 2) increases in overhead charges (approximately
$6,100).
<PAGE>
<TABLE>
OCCUPANCY
The following is a listing of approximate occupancy levels by quarter for the partnership's investment properties:
<CAPTION>
1996 1997
------------------------------------- ------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Oak View Apartments
Augusta, Georgia. . . . . . 96% 88% 77% 82% 84% 92% 95%
5521 Meadowbrook Court
Distribution Center
Rolling Meadows, Illinois . 100% 50% 50% 50% 100% 100% N/A
1880 Country Farm Drive
Warehouse/Research Facility
Naperville, IL. . . . . . . 100% 100% N/A N/A N/A N/A N/A
<FN>
An "N/A" indicates the property was not owned by the Partnership at the end of the quarter.
</TABLE>
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS: 27. Financial Data Schedule
(b) REPORTS ON FORM 8-K: Form 8-K dated August 21, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
LINCAM PROPERTIES LTD. SERIES 85
By: LINCAM PROPERTIES, INC.
Corporate General Partner
Date: November 13, 1997 By:/s/ CHARLES C. KRAFT
Charles C. Kraft, Treasurer
Principal Financial Officer and
Principal Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: LINCAM PROPERTIES, INC.
Corporate General Partner
Date: November 13, 1997 By:/s/ GREGORY T. MUTZ
Gregory T. Mutz
Chairman and Director
Principal Executive Officer
Date: November 13, 1997 By:/s/ JOHN E. ALLEN
John E. Allen
President and Director
Date: November 13, 1997 By:/s/ CHARLES C. KRAFT
Charles C. Kraft, Treasurer
Principal Financial Officer and
Principal Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 516,746
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 518,704
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,042,791
<CURRENT-LIABILITIES> 83,567
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,959,224
<TOTAL-LIABILITY-AND-EQUITY> 3,042,791
<SALES> 0
<TOTAL-REVENUES> 702,484
<CGS> 0
<TOTAL-COSTS> 610,483
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 79,619
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 92,001
<INCOME-TAX> 0
<INCOME-CONTINUING> 92,001
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 92,001
<EPS-PRIMARY> 3.64
<EPS-DILUTED> 3.64
</TABLE>
