8-K

                       SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C.  20549


                               _________________



                                    FORM 8-K

                                 CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934




Date of Report (Date of earliest event reported):      December 12, 1994


Vanguard Real Estate Fund I, A Sales-Commission-Free Income Properties Fund 

(Exact name of the registrant as specified in its character)


Massachusetts                      0-16785             23-6861048
(State of other jurisdiction       (Commission         (IRS Employer
of incorporation)                  File Number)        Identification No.)


Vanguard Financial Center, Malvern, PA                 19355
(Address of principal executive offices)               (Zip Code)


Registrant's telephone number, including area code (610) 669-1000













                                     INDEX     
                                                    Page No.
                                               
Cover Page . .  . . . . . . . . . . . . . . . . . . . .-

Index. .. . . . . . . . . . . . . . . . . . . . . . . .1

Item
No.

Item 1. Change in Control of Registrant . . . . . . . .2
Item 2. Acquisition or Disposition of Assets. . . . . .2
Item 3. Bankruptcy or Receivership. . . . . . . . . . .2
Item 4. Changes in Registrant's Certifying Accountant .2
Item 5. Other Events. . . . . . . . . . . . . . . . . .2
Item 6. Resignation of Registrant's Directors . . . . .2
Item 7. Financial Statements and Exhibits . . . . . . .2
Item 8. Change in Fiscal Year . . . . . . . . . . . . .2


                                                            
Signatures . . . . . . . . . . . . . . . . . . . .  . .3



Exhibit Index. . . . .. . . . . . . . . . . . . . . . .4


















                                       1

Item 1.   Change in Control of Registrant

          None

Item 2.   Acquisition or Disposition of Assets

          None
     
Item 3.   Bankruptcy or Receivership

          None

Item 4.   Changes in Registrant's Certifying Accountant

          None

Item 5.   Other Events

     On December 12, 1994 at its regular quarterly meeting, the Fund's
Board of Trustees adopted a plan of liquidation and termination.  This plan
is being undertaken in the eighth year of the Fund's initially contemplated
seven-to-twelve-year life.  The decision to adopt the plan of liquidation
at this time was driven by several factors, including real estate market
conditions and tax considerations affecting real estate investment trusts. 
The plan of liquidation contemplates the orderly sale of, and the
distribution of net proceeds received from, the Fund's remaining real
estate investments over the next 24 months.

     At December 12, 1994, the Fund held investments in four income-
producing properties or portfolios, including three commercial properties
(consisting of one office complex located outside of Minneapolis,
Minnesota, and shopping centers located in Torrance, California and Durham,
North Carolina) and one residential apartment complex located in Montgomery
County, Maryland.  The Fund's real estate investments at November 30, 1994
had a recorded book value of approximately $27.1 million, or $2.46 per
share.

     Following the adoption of the plan of liquidation, the Trustees
declared a $3.69 per share liquidating distribution, payable on December
29, 1994, to shareholders of record as of December 27, 1994.  This
distribution will be made from the Fund's cash reserves, which were
approximately $46 million at November 30, 1994.  The capital distribution
will reduce the book value of the Fund's shares and also the amount of
future income the Fund may be expected to generate.
     
Item 6.   Resignation of Registrant's Directors

     None

Item 7.   Financial Statements and Exhibits    
     
     The Plan of Liquidation and Termination for Vanguard Real Estate Fund
I is attached as an exhibit on pages 5 - 9 of this Report.

Item 8.   Change in Fiscal Year

     None


                                       2



                                   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.




                          VANGUARD REAL ESTATE FUND I
                 A SALES-COMMISSION-FREE INCOME PROPERTIES FUND


DATE: December 22, 1994            BY:  _______________________________
                                        Ralph K. Packard
                                        Vice President & Controller


















                                       3







EXHIBIT INDEX
                                                           Page No.

     
2.   Plan of Liquidation and Termination - Vanguard 
     Real Estate Fund I . . . . . . . . . . . . . . . . . . . . .5-9




































                                       4

EX-2

                          VANGUARD REAL ESTATE FUND I,
                 A SALES-COMMISSION-FREE INCOME PROPERTIES FUND

                            SECRETARY'S CERTIFICATE


     The undersigned, Raymond J. Klapinsky, being the duly elected and
acting Secretary of Vanguard Real Estate Fund I, A Sales-Commission-Free
Income Properties Fund (the "Fund"), hereby certifies that attached hereto
as Exhibit A is a true and complete copy of a Plan of Liquidation and
Termination duly adopted by the Trustees of the Fund (including a majority
of the unaffiliated Trustees) at a meeting duly called therefor on
December 12, 1994, at which meeting a quorum was present and acting
throughout.  Such resolutions have not been modified or repealed and remain
in full force and effect as of the date hereof.

     IN WITNESS WHEREOF, I have hereunto set my hand to this Certificate as
of this 21st day of December, 1994.


                              _______________________________________
                              Raymond J. Klapinsky
                              Secretary

                              Vanguard Real Estate Fund I,
                              A Sales-Commission-Free Income Properties
                              Fund











                                       5


                                                            Exhibit A

                         VANGUARD REAL ESTATE FUND I,
                A SALES-COMMISSION-FREE INCOME PROPERTIES FUND

                      PLAN OF LIQUIDATION AND TERMINATION


     WHEREAS, Vanguard Real Estate Fund I, A Sales-Commission-Free Income
Properties Fund (the "Fund"), is a business trust organized pursuant to the
laws of the Commonwealth of Massachusetts; and

     WHEREAS, the Fund has operated as a "real estate investment trust"
under Sections 856-859 of the Internal Revenue Code of 1986, as amended the
("Code"); and

     WHEREAS, the Fund was organized in 1986 as a "finite life" real estate
investment trust, with a then-contemplated duration of between seven and
twelve years; and

     WHEREAS, pursuant to Section 8.1 of the Fund's Amended and Restated
Declaration of Trust, dated as of September 10, 1986 (as subsequently
amended, the "Declaration of Trust"), the Trustees of the Fund have the
discretion to determine in good faith whether and when the Fund should be
liquidated and terminated, if and so long as the termination occurs not
later than September 10, 2001; and

     WHEREAS, the Trustees have determined in good faith that it is in the
best interest of the Fund and the Shareholders for the Fund to be
liquidated and terminated in accordance with the Plan of Liquidation hereby
adopted:

     NOW THEREFORE, BE AND IT HEREBY IS RESOLVED that the Fund be
completely liquidated in accordance with Section 331 of the Code.

     FURTHER RESOLVED, that the Trustees and officers of the Fund be and
they hereby are authorized and directed to complete and carry out the Plan
of Liquidation as hereinafter set forth.

     FURTHER RESOLVED, that, without limiting the generality of the
foregoing, the following Plan of Liquidation be and it hereby is adopted:

     1.   TERMS.  All capitalized terms not otherwise defined herein shall
have the meaning set forth in the Declaration of Trust of the Fund.

     2.   IRS FILING.  Within thirty days of the date of the adoption of
this Plan of Liquidation by the Trustees, an IRS Form 966 shall be properly
filed with the appropriate office of the Internal Revenue Service.

     3.   LIQUIDATION OF ASSETS.  In furtherance of this Plan of
Liquidation, the Fund shall sell, exchange or otherwise dispose of all of
its assets to the extent, for such consideration and upon such terms and
conditions as the Trustees of the Fund deem expedient and in the best
interest of the Fund and its Shareholders.  All assets remaining after the
payment of or provision for the payment or satisfaction of all liabilities
or obligations of the Fund shall, to the extent not already consisting of
cash, be converted into cash at public or private sale.

                                       6


     4.   PAYMENT OF DEBTS.  Prior to any final distribution to its
Shareholders, the Fund shall promptly pay or provide for the payment or
satisfaction of all debts, expenses, taxes, liabilities (whether known,
unascertained, contingent or unmatured) and all other obligations of the
Fund, including expenses of dissolution, liquidation and termination of
existence.

     5.   LIQUIDATION DISTRIBUTION.  Following the payment or provision for
the payment or satisfaction of the Fund's liabilities and obligations
pursuant to paragraph 3 above, the Fund shall distribute its remaining cash
and assets to Shareholders of the Fund in such amounts and at such times as
shall be determined by the Trustees in their sole discretion and consistent
with the Fund's Declaration of Trust and its maintaining its status as a
"real estate investment trust" under the Code.  Distributions may be made
in installments from time to time or as a whole.  Upon payment of the
liquidation distribution (or final liquidation distribution, if made in
installments), each Shareholder of the Fund shall be given notice to
deliver to the Fund, or to a trust to which the assets of the Fund may have
been transferred, the certificates representing all of the shares of the
Fund owned by such Shareholder.  The cash of the Fund as determined under
paragraphs 4 and 5 above shall be divided among the Shareholders on a pro
rata basis.  If a Shareholder's certificate of shares of beneficial
interest in the Fund has been lost, stolen or destroyed, such Shareholder
may be required to furnish the Fund with satisfactory evidence of the loss,
theft or destruction thereof, together with a reasonable undertaking or
indemnity satisfactory to the Fund, as a condition to the receipt of any
distribution.  The complete liquidation of the Fund shall be completed
within 24 months of the date of the adoption of this Plan of Liquidation.

     6.   TERMINATION.  As promptly as practicable after the payment of or
provision for the payment or satisfaction of all liabilities and
obligations of the Company, and upon the taking of any act required to be
taken under the laws of the Commonwealth of Massachusetts, the Fund shall
be terminated in accordance with the laws of the Commonwealth of
Massachusetts.

     7.   CESSATION OF BUSINESS.  After the adoption of this Plan of
Liquidation, the Fund shall not engage in any business activities except
for the purposes of preserving the values of its assets, adjusting and
winding up its business affairs, and making any liquidation distribution in
accordance with the Plan of Liquidation.  The Trustees now in office and,
at their pleasure, the officers of the Fund, shall continue in office
solely for these purposes.  Unless and until the decision to proceed with
the Plan of Liquidation is reversed by the Fund's Trustees, no new business
operations will be explored or undertaken by the Fund.

     8.   POWER OF THE TRUSTEES.  The Trustees and, if authorized by the
Trustees, the officers of the Fund, shall have authority to do or authorize
any and all acts and things as provided for in this Plan of Liquidation and
any and all such further acts and things as they may consider desirable to
carry out the purposes of this Plan of Liquidation, including the execution
and filing of all such certificates, documents, information returns, tax
returns, and other documents which may be necessary or appropriate to
implement this Plan of Liquidation.  The Trustees may authorize such
variations from or amendments to the provisions of this Plan of Liquidation
as may be necessary or appropriate to effectuate the complete liquidation,
dissolution and termination of existence of the Fund, and the distribution
of its assets to its Shareholders in accordance with the laws of the
Commonwealth of Massachusetts.  The death, resignation, or other disability
of any Trustees, or officer of the Fund shall not impair the authority of
the surviving or remaining Trustees or officers to exercise any of the
powers provided for in the Plan of Liquidation.  Upon such death,
resignation, or other disability, the surviving or remaining Trustees, or,
if there be none, the surviving or remaining officers, shall have authority
to fill the vacancy or vacancies created, but the failure to fill such
vacancy or vacancies shall not impair the authority of the surviving or
remaining Trustees or officers to exercise any of the powers provided for
in this Plan of Liquidation.



                                       7

     After the effective date of termination of the Fund, the Trustees
shall continue to act as Trustees and shall have full power to wind up and
settle the Fund's affairs, and the Fund shall cease to carry on business
except to the extent necessary for the beneficial winding up thereof.  The
powers and duties of the Trustees of the Fund shall include, but are not
limited to, the following acts in the name and on behalf of the Fund:  (a)
to elect officers and employ agents and attorneys to liquidate or wind up
its affairs; (b) to continue the conduct of the business of the Fund only
insofar as necessary for the disposal or winding up thereof; (c) to carry
out contracts and collect, pay, compromise and settle debts for or against
the Fund; (d) to defend suits brought against the Fund; (e) to sue in the
name of the Fund for all sums due or owing to the Fund or to recover any of
its property; and (f) in general, to make contracts and to do any and all
things in the name of the Fund which may be proper or convenient for the
purposes of winding up, settling and liquidating the affairs of the Fund.

     9.   LIQUIDATING TRUST.  If advisable for any reason to complete the
liquidation and distribution of the Fund's assets to the Shareholders of
the Fund, and subject to approval of the liquidating trustee by
Shareholders of the Fund if such approval is deemed advisable by the
Trustees, the Trustees may at any time (including after its dissolution)
transfer to a liquidating trust any or all remaining assets of the Fund. 
The liquidating trust will succeed to all of the then-remaining assets of
the Fund, including the reserve for contingent or unsatisfied liabilities
and obligations of the Fund and any liabilities and obligations of the Fund
expressly not assumed by any purchaser of the Fund's assets.  The sole
purposes of the liquidating trust will be to prosecute and defend suits by
or against the Fund, to enable the Fund to settle and close the business of
the Fund, to dispose of and convey the assets of the Fund, to satisfy the
remaining liabilities and obligations of the Fund, and to distribute the
remaining cash to the Fund's Shareholders.  The Trustees may appoint a
trustee or trustees to act as trustee or trustees of the liquidating trust
on such terms and conditions as the Trustees determine.  It is intended
that any liquidating trust so established qualify as a "liquidating trust",
as such term is defined in Treasury Regulation 301.7701-4(d).

     In the event it is determined by a majority of the Trustees that an
entity or entities different in form but similar in purpose to a
liquidating trust, such as an escrow or partnership, is more appropriate to
the administration and completion of the liquidation, then the Trustees
shall take all steps necessary to establish such other entity or entities. 
Such an entity or entities shall be administered, to the extent possible,
in the same manner as provided with respect to the liquidating trust
contemplated above.

     10.  AMENDMENTS.  The Trustees of the Fund may modify or amend this
Plan of Liquidation and, prior to the final termination of the Trust, may
abandon this Plan of Liquidation without further action to the extent
permitted by the laws of the Commonwealth of Massachusetts.

     11.  INDEMNIFICATION OR INSURANCE.  The obligation of the Fund to
indemnify and reimburse its trustees, officers, employees or affiliates
pursuant to Section 7.4 of the Fund's Declaration of Trust or otherwise
shall survive the liquidation and dissolution of the Fund, but may be
satisfied only out of the assets of any reserve fund or liquidating trust
which has assumed the liability therefor or the proceeds of insurance
therefor, but not from distributions made to shareholders.  The Trustees
shall have the power and authority after the termination of the Fund to
purchase, continue and maintain insurance as may be necessary to cover the
Fund's indemnification obligations, and the Trustees also shall have the
power and authority to satisfy any of the indemnification obligations of
the Fund out of the assets of the Fund, including assets held by an agent
or a trust or other entity.

     12.  COSTS.  The Trustees are authorized, empowered and directed to
pay all legal, accounting, printing, appraisal and other fees and expenses
of persons rendering services to the Fund in connection with adoption
and/or implementation of this Plan of Liquidation.


                                       8

     13.  AGENT FOR SHAREHOLDERS.  In order to effect a final distribution
of its remaining cash and investments to its Shareholders, the appropriate
officers of the Fund are hereby authorized to appoint an agent for
Shareholders of the Fund, if such action is deemed advisable by the
Trustees.  The Fund shall deliver to such agent for the Shareholders the
cash to be distributed to the Shareholders as determined under paragraph 4
above.  Such liquidation distribution will be distributable to the
Shareholders by the agent for Shareholders as soon as practicable after
receipt of the funds from the Fund to those Shareholders who have delivered
their certificates representing shares of the Fund or other satisfactory
evidence as provided for in paragraph 4 above.  The remainder of such cash
will be held for the account of those Shareholders who have not delivered
their share certificates or other satisfactory evidence.  No interest shall
accrue at any time on any cash held by the agent for Shareholders.

     14.  APPROVAL AND EFFECTIVE DATE.  In accordance with the provisions
of Section 8.1 of the Declaration of Trust, this Plan of Liquidation shall
be and become effective upon its approval by a majority of Trustees of the
Fund then in office (including a majority of Unaffiliated Trustees).