EXHIBIT 99.1


Contact: Susan B. Railey
         (301) 255-4740                     FOR IMMEDIATE RELEASE


        AIM 85 DECLARES FINAL LIQUIDATING DISTRIBUTION OF $1.32 PER UNIT

      AIM 85 to Close Stock Transfer Books on August 8, 2005 and Terminate
                                -----------------

     ROCKVILLE,  MD, July 27, 2005 -- (AMEX/AII) The general partner of American
Insured Mortgage  Investors - Series 85, L.P. (AIM 85) has completed the sale of
the   Partnership's   remaining  assets  and  declared  the  final   liquidating
distribution  to  unitholders  in the amount of $1.32 per unit  resulting in the
termination of the Partnership.

     AIM 85 will  close its stock  transfer  books at the close of  business  on
August 8, 2005. In order to receive the final liquidating  distribution of $1.32
per  unit,  unitholders  on  such  date  will be  required  to  surrender  their
certificates  representing  depositary units of limited partnership  interest to
Registrar and Transfer Company, the Partnership's  transfer agent, pursuant to a
Letter of  Transmittal  expected to be mailed to  unitholders on or about August
12, 2005. Certain unitholders that do not hold a certificate because their units
are held in book  entry  form  will  not be  required  to  execute  a Letter  of
Transmittal in order to receive the final liquidating  distribution of $1.32 per
unit. The American Stock Exchange  intends to suspend trading of AIM 85 units as
of the close of business on August 8, 2005.

     The final  liquidating  distribution  represents the  unitholder's pro rata
share of the aggregate proceeds from the disposition of the Partnership's assets
less  amounts  required  for payment of, or  provision  for,  the  Partnership's
remaining  expenses and distributions to the General Partner,  as more fully set
forth in the Partnership Agreement.

Note: Forward-looking statements or statements that contain the words "believe",
"anticipate", "expect", "may" or similar expressions and projections contained
in this release involve a variety of risks and uncertainties. These risks and
uncertainties include unknown claims and liabilities which would negatively
impact the amount of the final liquidating distribution, the timing of the
closing of the Partnership's books, the suspension of trading of AIM 85 units on
the American Stock Exchange and the termination of the Partnership. Such
statements are subject to these risks and uncertainties, which could cause
actual results to differ materially from those projected. The general partner of
American Insured Mortgage Investors- Series 85, L.P. and the Partnership assume
no obligation to update or supplement forward-looking statements that become
untrue because of subsequent events.

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