Exhibit 99.1


                  Contact: Susan B. Railey
                  (301) 468-3120
                  Sharon Bramell                     FOR IMMEDIATE RELEASE
                  (301) 231-0351


                      AIM 85 DECLARES MONTHLY DISTRIBUTION
                          FOR JULY OF 87 CENTS PER UNIT

                 Includes Mortgage Proceeds of 86 Cents Per Unit


                           ---------------------------


     ROCKVILLE,  MD, July 21, 2004 -- (AMEX/AII) The general partner of American
Insured Mortgage Investors - Series 85, L.P. (AIM 85) today declared the monthly
distribution for July 2004 in the amount of 87 cents per unit. Holders of record
on July  31,  2004  will  receive  this  amount  as part  of the  third  quarter
distribution which will be paid on November 1, 2004.

The July distribution of 87 cents per unit includes the following:

o        1 cent per unit regular cash flow,
o        2 cents per unit mortgage proceeds due to the prepayment of the
         mortgage on Stafford Towers; and
o        84 cents per unit mortgage proceeds due to the sale of the GNMA
         security secured by the mortgage on Oak Forest Apartments II.

     As  discussed  above,  on July 14,  2004,  AIM 85,  with the consent of the
Partnership's  advisor,  sold the GNMA  security  with a current  face amount of
$10.1 million which was secured by the mortgage on Oak Forest Apartments II. AIM
85 received total gross proceeds of $10.6 million.

     Record dates for the AIM 85  distributions  occur at the end of each month.
Distributions  are paid  approximately  one month after the end of each calendar
quarter and include the three amounts declared during the quarter.



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