FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                Quarterly Report Pursuant to Section 13 or 15 (d)
                     of the Securities Exchange Act of 1934

For the Quarter Ended                                Commission File Number
March 31, 1998                                                0-13331


               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP III
             (Exact Name of Registrant as specified in its Charter)

Delaware                                             16-1234990
---------                                            ----------
(State of Formation)                     (IRS Employer Identification No.)

2350 North Forest Road
Suite 12-A
Getzville, New York  14068
(Address of Principal Executive Office)

Registrant's Telephone Number:      (716) 636-0280


Indicate by a 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_____

Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in part III of this Form 10-Q or any
amendment to this Form 10-Q. (X)

As of March 31, 1998, the issuer had 15,551 units of limited partnership
interest outstanding.


<PAGE>
               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP III
               ---------------------------------------------------

                                      INDEX
                                      -----



                                                                        PAGE NO.
                                                                        --------
PART I:  FINANCIAL INFORMATION
------   ---------------------

         Balance Sheets -
                  March 31, 1998 and December 31, 1997                     3

         Statements of Operations -
                  Three Months Ended March 31, 1998 and 1997               4

         Statements of Cash Flows -
                  Three Months Ended March 31, 1998 and 1997               5

         Statements of Partners' (Deficit) Capital -
                  Three Months Ended March 31, 1998                        6

         Notes to Financial Statements                                   7 - 17


PART II: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
-------  ---------------------------------------
         FINANCIAL CONDITION AND RESULTS OF
         ----------------------------------
         OPERATIONS                                                     18- 20
         ----------




                                       -2-

<PAGE>
               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP III
               ---------------------------------------------------
                                 BALANCE SHEETS
                                 --------------
                      March 31, 1998 and December 31, 1997
                      ------------------------------------
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                     March 31,               December 31,
                                                                       1998                      1997
                                                                       ----                      ----
ASSETS
------
<S>                                                               <C>                   <C>  
Property, at cost:
     Land                                                        $        777,709        $          777,709
     Buildings and improvements                                        10,657,568                10,649,818
     Furniture and fixtures                                               959,752                   959,752
                                                                 ----------------         -----------------
                                                                       12,395,029                12,387,279
     Less accumulated depreciation                                      5,653,338                 5,544,716
                                                                 ----------------         -----------------
          Property, net                                                 6,741,691                 6,842,563

Cash                                                                      760,841                   857,649
Cash - security deposits                                                   54,665                         -
Investment in money market account                                      1,513,653                 2,507,650
Escrow deposits                                                           243,575                   255,867
Accounts receivable, net of allowance for doubtful
     accounts of $441,914 and $431,151, respectively                       38,057                    35,942
Mortgage costs, net of accumulated amortization
     of $145,890 and $128,058, respectively                               160,887                   178,719
Other assets                                                               56,410                    78,731
                                                                 ----------------         -----------------

           Total Assets                                           $     9,569,779         $      10,757,121
                                                                 ================         =================


LIABILITIES AND PARTNERS' (DEFICIT)
----------------------------------

Liabilities:
     Mortgages payable                                            $     4,951,414         $       6,216,763
     Accounts payable and accrued expenses                                192,474                   192,702
     Accounts payable - affiliates                                         23,240                    35,707
     Accrued interest                                                     199,496                   199,407
     Security deposits and prepaid rents                                  171,380                   184,878
                                                                 ----------------         -----------------
           Total Liabilities                                            5,538,004                 6,829,457
                                                                 ----------------         -----------------

Partners' (Deficit) Capital:
     General partners                                                     (34,502)                  (37,625)
     Limited partners                                                   4,066,277                 3,965,289
                                                                 ----------------         -----------------
          Total Partners' (Deficit)                                     4,031,775                 3,927,664
                                                                 ----------------         -----------------

          Total Liabilities and Partners' (Deficit)               $     9,569,779          $     10,757,121
                                                                 ================         =================
</TABLE>

                        See notes to financial statements


                                       -3-

<PAGE>
               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP III
               ---------------------------------------------------
                            STATEMENTS OF OPERATIONS
                            ------------------------
                   Three Months Ended March 31, 1998 and 1997
                   ------------------------------------------
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                   Three Months              Three Months
                                                                       Ended                    Ended
                                                                     March 31,                March 31,
                                                                       1998                      1997
                                                                       ----                      ----
<S>                                                              <C>                      <C>    
Income:
                                           
     Rental                                                      $        476,848         $         723,947
     Interest and other income                                            239,161                    63,115
                                                                 ----------------         -----------------
     Total income                                                         716,009                   787,062
                                                                 ----------------         -----------------

Expenses:
     Property operations                                                  249,915                   586,983
     Interest:
          Paid to affiliates                                               27,118                    26,410
          Other                                                           104,164                   241,969
     Depreciation and amortization                                        126,928                    26,104
     Administrative:
          Paid to affiliates                                               26,860                    73,941
          Other                                                            76,913                   101,776
                                                                 ----------------         -----------------
     Total expenses                                                       611,898                 1,057,183
                                                                 ----------------         -----------------

Loss before allocated loss from joint venture                             104,111                  (270,121)

Allocated loss from joint venture                                               -                   (39,051)
                                                                 ----------------         -----------------

Net loss                                                         $        104,111          $       (309,172)
                                                                 ================         =================

Loss per limited partnership unit                                $           6.49          $         (19.28)
                                                                 ================         =================

Distributions per limited partnership unit                       $              -          $              -
                                                                 ================         =================

Weighted average number of
     limited partnership units
     outstanding                                                           15,551                    15,551
                                                                 ================         =================

</TABLE>

                        See notes to financial statements

                                       -4-
<PAGE>
               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP III
               ---------------------------------------------------
                            STATEMENTS OF CASH FLOWS
                            ------------------------
                   Three Months Ended March 31, 1998 and 1997
                   ------------------------------------------
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                     Three Months              Three Months
                                                                         Ended                    Ended
                                                                       March 31,                March 31,
                                                                         1998                      1997
                                                                         ----                      ----
<S>                                                              <C>                        <C>  
Cash flow from operating activities:
     Net loss                                                       $     104,111            $     (309,172)

Adjustments to reconcile net loss to
net cash (used in) operating activities:
     Depreciation and amortization                                        126,454                   186,902
     Loss from joint venture                                                    -                     3,525
Changes in operating assets and liabilities:
     Cash - security deposits                                             (54,665)                        -
      Investment in money market account                                  993,997                         -
      Escrow deposits                                                      12,292                         -
     Accounts receivable                                                   (2,115)                    2,999
     Other assets
                                                                           22,321                   (34,368)
     Accounts payable and accrued expenses                                   (228)                   59,675
     Accrued interest                                                          89                     7,984
     Security deposits and prepaid rent                                   (13,498)                   13,066
                                                                 ----------------         -----------------
Net cash (used in) operating activities                                 1,188,758                   (69,389)
                                                                 ----------------         -----------------

Cash flow from investing activities:
     Capital expenditures                                                  (7,750)                  (10,411)
     Distributions from joint venture                                           -                         -
                                                                 ----------------         -----------------
Net cash (used in) investing activities                                    (7,750)                  (10,411)
                                                                 ----------------         -----------------

Cash flows from financing activities:
    Cash overdraft                                                              -                   (32,909)
    Accounts payable - affiliates                                         (12,467)                  107,230
     Principal payments on mortgages and notes                         (1,626,114)                  (32,346)
     Proceeds from mortgage refinancing                                   360,765                         -
Net cash provided by financing activities                              (1,277,816)                   41,975
                                                                 ----------------         -----------------

(Decrease) in cash                                                        (96,808)                  (37,825)

Cash - beginning of period                                                857,649                         -
                                                                 ----------------         -----------------

Cash - end of period                                              $       760,841          $       (37,825)
                                                                 ================         =================
Supplemental Disclosure of Cash Flow Information:
     Cash paid for interest                                       $       131,193          $        364,566
                                                                 ================         =================

</TABLE>

                        See notes to financial statements

                                       -5-
<PAGE>
               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP III
               ---------------------------------------------------
                    STATEMENTS OF PARTNERS' (DEFICIT) CAPITAL
                    -----------------------------------------
                        Three Months Ended March 31, 1998
                        ---------------------------------
                                   (Unaudited)
<TABLE>
<CAPTION>


                                        General                       Limited Partners
                                       Partners
                                        Amount                 Units                   Amount
                                        ------                 -----                   ------

<S>                                  <C>                            <C>           <C>              
Balance, January 1, 1998             $       (37,625)               15,551        $       3,965,289

Net income (loss)                              3,123                    -                   100,988
                                     ---------------       ---------------        -----------------

Balance, March 31, 1998              $       (34,502)               15,551        $       4,066,277
                                     ===============       ===============        =================
</TABLE>



                        See notes to financial statements



                                       -6-

<PAGE>
              REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP III
              ---------------------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                   Three Months Ended March 31, 1998 and 1997
                   ------------------------------------------
                                   (Unaudited)


1.       GENERAL PARTNER'S DISCLOSURE
         ----------------------------

         In the opinion of the General Partners of Realmark Property Investors
         Limited Partnership III, all adjustments necessary for the fair
         presentation of the Partnership's financial position, results of
         operations, and changes in cash flows for the three months ended March
         31, 1998 and 1997 have been made in the financial statements. The
         financial statements are unaudited and subject to any year-end
         adjustments which may be necessary.

2.       FORMATION AND OPERATION OF PARTNERSHIP
         --------------------------------------

         RealmarkProperty Investors Limited Partnership III (the "Partnership"),
         a Delaware Limited Partnership, was formed November 18, 1983, to invest
         in a diversified portfolio of income-producing real estate.

         In February 1984 the Partnership commenced the public offering of units
         of limited partnership interest. Other than matters relating to
         organization, it had no business activities and, accordingly, had not
         incurred any expenses or earned any income until the first interim
         closing (minimum closing) of the offering which occurred April 26,
         1984. All items of income and expense arose subsequent to this date. On
         January 31, 1985 the offering was concluded, at which time 15,551 units
         of limited partnership interest were outstanding. The General Partners
         are Realmark Properties, Inc., a Delaware corporation, the corporate
         General Partner, and Mr. Joseph M. Jayson, the individual General
         Partner. Joseph M. Jayson is the sole shareholder of J.M. Jayson &
         Company, Inc. (JMJ) and Realmark Properties, Inc. is a wholly-owned
         subsidiary of J.M. Jayson & Company, Inc.

         Under the Partnership agreement, the General Partners and affiliates
         can receive compensation for services rendered and reimbursement for
         expenses incurred on behalf of the Partnership.


                                       -7-
<PAGE>

         FORMATION AND OPERATION OF PARTNERSHIP (CONTINUED)
         --------------------------------------------------

         Net income or loss arising from the sale or refinancing shall be
         distributed first to the limited partners in an amount equivalent to a
         7% return on the average of their adjusted capital contributions, then
         in an amount equal to their capital contributions, then an amount equal
         to an additional 5% of the average of their adjusted capital
         contributions after the general partners receive a disposition fee,
         then to all partners in an amount equal to their respective positive
         capital balances, and finally, in the ratio of 87% to the limited
         partners and 13% to the general partners.

         Partnership income or loss not arising from sale or refinancing shall
         be allocated 97% to the limited partners and 3% to the general
         partners.

3.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         ------------------------------------------

         Use of Estimates
         ----------------

         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect the reported amounts of assets and
         liabilities and disclosure of contingent assets and liabilities at the
         date of the financial statements and the reported amounts of revenues
         and expenses during the reporting period. Actual results could differ
         from those estimates.

         Cash
         ----

         For purposes of reporting cash flows, cash includes the following
         items: cash on hand; cash in checking; and money market savings.

         Cash - security deposits
         ------------------------

         Cash - security deposits represents cash on deposit in accordance with
         terms of a U.S. Department of Housing and Urban Development (HUD)
         regulatory agreement for multi-family housing projects under Section
         223(f).

                                       -8-

<PAGE>

         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
         -----------------------------------------------------

         Property and depreciation
         -------------------------

         Depreciation is provided using the straight-line method over the
         estimated useful lives of the respective assets totaling $232,606 and
         $449,241 for the years ended December 31, 1997 and 1996, respectively.
         The estimated useful lives of the Partnership's assets is from 5 to 25
         years. Expenditures for maintenance and repairs are expensed as
         incurred, and major renewals and betterments are capitalized. The
         Accelerated Cost Recovery System are used to calculate depreciation
         expense for tax purposes.

         Rental income
         -------------

         Leases for residential properties have terms of one year or less.
         Commercial leases generally have terms of one to five years. Rental
         income is recognized on the straight-line method over the term of the
         lease.

         Investments in Mutual Funds
         ---------------------------

         The investment in mutual funds are stated at fair value, which
         approximates cost, at December 31, 1997.


4.       ACQUISITION AND DISPOSITION OF RENTAL PROPERTY
         ----------------------------------------------

         In August 1984 the Partnership acquired a 112 unit apartment complex
         (Bryn Mawr) located in Ypsilanti, Michigan for a purchase price of
         $1,833,554, which included $134,857 in acquisition fees. In 1985 the
         acquisition fees related to the purchase of Bryn Mawr were reduced by
         $18,600 and reallocated to properties by the Partnership that year.

         In February 1985 the Partnership acquired a 190 unit apartment complex
         (Castle Dore) in Indianapolis, Indiana for a purchase price of
         $3,711,683, which included acquisition fees of $414,279.

         In February 1985 the Partnership acquired a 208 unit apartment complex
         (Parc Bordeaux) in Indianapolis, Indiana for a purchase price of
         $3,845,064, which included acquisition fees of $371,233.

                                       -9-

<PAGE>

         ACQUISITION AND DISPOSITION OF RENTAL PROPERTY (CONTINUED)
         ----------------------------------------------------------

         In June 1985 the Partnership acquired a 200 unit apartment complex
         (Williamsburg South Apartments) in Atlanta, Georgia for a purchase
         price of $4,764,200, which included acquisition fees of $368,745. In
         connection with this acquisition, the Partnership obtained from the
         seller a Purchase Money Mortgage in the amount of $3,300,000.

         In August 1985 the Partnership acquired a 38,500 square foot office
         complex (Perrymont) in Pittsburgh, Pennsylvania for a purchase price of
         $2,078,697, which included acquisition fees of $168,697.

         In November 1985 the Partnership acquired a 130 unit apartment complex
         (Pleasant Run) in Cincinnati, Ohio for a purchase price of $3,434,728,
         which included acquisition fees of $267,228.

         In December 1985 the Partnership acquired a 280 unit apartment complex
         (Ambassador Towers, formerly Cedar Ridge) in Monroeville, Pennsylvania
         for a purchase price of $6,423,391, which included acquisition fees of
         $646,424.

         In August 1986 the Bryn Mawr Apartments were sold for $3,110,000. The
         net cash proceeds of approximately $667,000 from the sale were
         distributed to the investors on a pro rata basis. The Partnership
         recognized a gain for financial statement purposes of $1,475,313. For
         income tax purposes, the gain will be recognized under the installment
         sale method.

         In December 1988 the Partnership sold Parc Bordeaux Apartments for a
         sale price of $5,300,000 which generated a total net gain for financial
         statement purposes of $2,338,067. For income tax purposes, the gain
         will be recognized under the installment sale method.

         In December 1996, the Partnership sold the Williamsburg South
         Apartments and Pleasant Run Farms Apartments for a sales price of
         $4,831,000 and $3,350,000, respectively, less related fees of $93,000.
         The sales generated a total net gain of $3,501,323 for financial
         statement purposes.

         In December 1997, the Partnership sold the Castle Dore Apartments for a
         sale price of $5,160,000 less related fees of approximately $174,000.
         The sales generated a total net gain of $3,095,376 for financial
         statement purposes. This property contributed revenues of $1,064,908
         and incurred expenses totaling $1,612,066 during the year ended
         December 31, 1997.

                                      -10-

<PAGE>

                         INDUCON JOINT VENTURE - AMHERST
                         -------------------------------
                                 BALANCE SHEETS
                                 --------------
                      March 31, 1998 and December 31, 1997
                      ------------------------------------
<TABLE>
<CAPTION>
                                                                            March 31,                   December 31,
                                                                               1998                         1997
ASSETS                                                                         ----                         ----
------
<S>                                                                     <C>                          <C>   
Property, at cost:
     Land                                                                $       177,710              $       177,709
     Land improvements                                                           262,257                      262,257
     Buildings and improvements                                                3,098,474                    3,090,727
     Equipment                                                                     8,466                        8,466
     Furniture and fixtures                                                        2,101                        2,101
                                                                         ---------------              ---------------
                                                                               3,549,008                    3,541,260
     Less accumulated depreciation                                             1,373,137                    1,339,394
                                                                         ---------------              ---------------
Property, net                                                                  2,175,871                    2,201,866

Cash and cash equivalents                                                              -                            -
Deferred debt expense, net of accumulated
     amortization of $0 and $293,490, respectively                                87,428                      109,766
Other assets                                                                           -                      128,377
                                                                         ---------------              ---------------

                 Total Assets                                                  2,263,299                    2,440,009
                                                                         ===============              ===============


LIABILITIES AND PARTNERS' CAPITAL
---------------------------------

Liabilities:
     Cash overdraft                                                      $       588,900              $       668,633
     Bonds payable                                                                     -                            -
     Mortgage payable                                                          1,856,129                    1,861,778
     Accounts payable and accrued expenses                                        47,277                       43,787
     Accounts payable - affiliates                                                 7,155                            -
                                                                         ---------------              ---------------
                 Total Liabilities                                             2,499,461                    2,574,198
                                                                         ---------------              ---------------

Partners' Capital:
     The Partnership                                                            (137,495)                    (134,189)
     Other joint venturer                                                           (174)                           -
                                                                         ---------------              ---------------
                Total Partners' Capital                                         (137,669)                    (134,189)
                                                                         ---------------              ---------------

                Total Liabilities and Partners' Capital                  $     2,361,792              $     2,440,009
                                                                         ===============              ===============
</TABLE>

                                      -11-
<PAGE>
                         INDUCON JOINT VENTURE - AMHERST
                         -------------------------------
                            STATEMENTS OF OPERATIONS
                            ------------------------
                   Three Months Ended March 31, 1998 and 1997
                   ------------------------------------------
<TABLE>
<CAPTION>
                                                                           Three Months                 Three Months
                                                                              Ended                        Ended
                                                                            March 31,                    March 31,
                                                                               1998                         1997
                                                                               ----                         ----
<S>                                                                   <C>                           <C>   
Income:
     Rental                                                             $        118,022              $       110,206
     Interest and other income                                                        27                        4,165
                                                                         ---------------              ---------------
     Total income                                                                118,049                      114,371
                                                                         ---------------              ---------------

Expenses:
     Property operations                                                          36,450                       45,774
     Interest                                                                     40,098                       41,663
     Depreciation and amortization                                                38,019                       35,621
     Administrative                                                                6,962                       32,419
                                                                         ---------------              ---------------
     Total expenses                                                              121,529                      155,477
                                                                         ---------------              ---------------

Net loss                                                                 $        (3,480)             $       (41,106)
                                                                         ===============              ===============


Allocation of net loss:

     The Partnership                                                     $        (3,306)             $       (39,051)
     Other Joint Venturer
                                                                                    (174)                      (2,055)
                                                                         ---------------              ---------------

                                                                         $        (3,480)             $       (41,106)
                                                                         ===============              ===============

</TABLE>

A reconciliation of the Partnership's investment in the joint venture for the
three month periods ended March 31, 1998 is as follows:

                                                                    1998
                                                                    ----
Investment in joint venture - beginning of period              $           -
Allocated loss                                                        (3,306)
                                                             ---------------

Investment in joint venture - end of period                    $      (3,306)
                                                             ===============

                                      -12-

<PAGE>


5.       MORTGAGES AND NOTES PAYABLE
         ---------------------------

         Castle Dore
         -----------

         A 7.5 US Housing and Urban Development (HUD) guaranteed mortgage which
         provides for monthly principal and interest payments of $18,002 payable
         in equal monthly installments through February 1, 2010. The carrying
         amount of the mortgage was $0 and $0 at March 31, 1998 and December 31,
         1997, respectively reflecting an unamortized discount of $0 for 1998.
         This property was sold in December 1997 and the outstanding mortgage
         was paid in full.

         Perrymont
         ---------

         A mortgage which provided for interest rates and monthly installments
         through December 1998 as follows:

         Year           Rate                 Payment
         ----           ----                 -------

         1997           8.5%                 $ 10,187  (Principal and interest)
         1998           8.5%                 $ 10,187  (Principal and interest)

         The outstanding balance was $0 and $1,259,701 at March 31, 1998 and
         December 31, 1997. The mortgage was scheduled to mature in January
         1999. As of December 31, 1997 the property was in default of the
         mortgage and was assigned a receiver by the lender. The mortgage
         obligation was satisfied in March 1998.


         Ambassador Towers (Formerly Cedar Ridge)
         ---------------------------------------

         The previous three mortgages were refinanced in March 1997 with a
         variable rate mortgage for $3,095,284. This provides for payments of
         interest only through August 1998 and monthly installment of principal
         and interest thereafter through maturityat February 1, 2004. The
         interest rate is 8.275% during the first loan year and is to be
         adjusted at the beginning of the second and seventh loan years to a
         rate equal to 2.40% plus the weekly average yield on Unites States
         Treasury Securities, adjusted to a constant maturity of five years. The
         mortgage has a balance of $3,130,049.

                                     -13-

<PAGE>

         MORTGAGE AND NOTES PAYABLE (CONTINUED)
         --------------------------------------

         The aggregate maturities of the mortgages for each of the next five
         years and thereafter are as follows:

         Year                                          Amount
         ----                                          ------
         1998                                     $       70,574
         1999                                             72,993
         2000                                             98,990
         2001                                            107,698
         2002                                            117,122
         Thereafter                                    4,484,037
                                                  --------------

         TOTAL                                     $   4,951,414
                                                  ==============

         INDUCON AMHERST
         ---------------

         A mortgage with a balance of $1,856,129 at March 31, 1998. The mortgage
         provides for monthly principal and interest payment of $15,250 at a
         rate of 8.62%. The remaining balance is due March 2022.

6.       FAIR VALUE OF FINANCIAL INSTRUMENTS:
         ------------------------------------

         Statement of Financial Accounting Standards No. 107 requires disclosure
         about fair value of certain financial instruments. The fair value of
         accounts receivable, accounts payable, accrued expenses, deposit
         liabilities approximate the carrying value due to the short-term nature
         of these instruments.

7.       RELATED PARTY TRANSACTIONS
         --------------------------

         According to the terms of the Partnership agreement, the general
         partners are entitled to receive a Partnership management fee equal to
         7% of net cash flow (as defined in the Partnership agreement), 2% of
         which is subordinated to the limited partners having received an annual
         cash return equal to 7% of their adjusted capital contributions. No
         such fee has been paid or accrued by the Partnership for the three
         months ended March 31, 1998 and 1997.

                                      -14-

<PAGE>

         RELATED PARTY TRANSACTIONS (CONTINUED)
         --------------------------------------

         Pursuantto the terms of the Partnership agreement, the corporate
         general partner charges the Partnership for reimbursement of certain
         costs and expenses incurred by the corporate general partner and its
         affiliates in connection with the administration of the Partnership.
         These charges were for the Partnership's allocated share of costs and
         expenses such as payroll, travel and communication, costs related to
         partnership accounting, and partner's communication and relations.

         The general partners are also allowed to collect property disposition
         fees upon sale of acquired properties. This fee is not to exceed the
         lesser of 50% of amounts customarily charged in arm's-length
         transactions by others rendering similar services for comparable
         properties or 2.75% of the sales price. The property disposition fee is
         subordinate to payments to the limited partners of a cumulative annual
         return (not compounded) equal to 7% of their average adjusted capital
         balances and to repayment to the limited partners of an amount equal to
         their capital contributions.

         The general partners have not to date received a disposition fee on the
         sale of Bryn Mawr or Parc Bordeaux, as the limited partners have not
         received a return of 7% on their average adjusted capital or their
         original capital as defined in the Partnership agreement. Once the
         limited partners receive their original capital and a 7% return, the
         general partners will be entitled to disposition fees of 2.75%.

         Management fees for the management of Partnership's properties are paid
         to an affiliate of the General Partner. The management agreement
         provides for 5% of gross monthly rental receipts of the complex to be
         paid as fees for administering the operations of the property. These
         fees totaled $26,860 and $73,941 for the three months ended March 31,
         1998 and 1997, respectively.

         Accountspayable - affiliates amounted to $23,240 at March 31, 1998. The
         payable represents fees due to the general partner or to affiliates of
         the general partner.

         Computerservice charges for the Partnership are paid or accrued to an
         affiliate of the General Partner. The fee is based upon the number of
         apartment units and totaled $8,295 and $8,640 for the three months
         ended March 31, 1998 and 1997.

                                      -15-

<PAGE>

8.       INCOME TAXES
         ------------
    
         No provision has been made for income taxes since the income or loss of
         the Partnership is to be included in the tax returns of the individual
         partners.

         The tax returns of the Partnership are subject to examination by
         federal and state taxing authorities. Under federal and state income
         tax laws, regulations and rulings, certain types of transactions may be
         accorded varying interpretations and, accordingly, reported Partnership
         amounts could be changed as a result of any such examination.

         The reconciliation of net income(loss) for the three month periods
         ended March 31, 1998 and 1997 as reported in the statements of
         operations, and as would be reported for tax purposes respectively, is
         as follows:

                                                   March 31,         March 31,  
                                                     1998              1997     
                                                     ----              ----     
         Net income (loss) -                                                    
              Statement of operations              $ 104,111      $   (309,172) 
         (Add to)  deduct from:                                                 
              Difference in depreciation             (22,660)          (25,000) 
              Difference in amortization               2,115            16,431  
              Non-deductible expenses                 12,467            62,000  
              Difference in loss of joint venture          0             8,500  
                                                  ----------    --------------  
                                                                                
         Net income(loss) for tax purposes         $ (96,033)      $  (247,241) 
                                                  ==========    ==============  
         
                                      -16-

<PAGE>

         INCOME TAXES (CONTINUED)
         -----------------------

         The reconciliation of partner's (deficit) capital at March 31, 1998 and
         December 31, 1997 as reported in the balance sheets, and as reported
         for tax purposes, is as follows:

                                              March 31,           December 31,
                                                1998                 1997
                                                ----                 ----
         Partner's (Deficit) Capital -
           balance sheet                     $    4,031,775    $    3,927,664   
           Add to (deduct from):
             Accumulated difference in
             depreciation                        (4,409,155)       (4,386,495)  
             Accumulated difference in
             amortization                            79,553            77,418
             Syndication fees and selling
             expenses                             1,842,060         1,842,060
             Gain on sale of property             1,009,847         1,009,847
             Other non-deductible expenses           85,192            72,725
             Difference in book and tax
             depreciable cost basis                 915,085           915,085
             Difference in book and tax
             basis of investments                  (596,400)         (596,400)
             Other                                  (69,286)        (  69,286)
                                            ---------------   ---------------
         Partner's (Deficit) Capital -
           tax return                          $  2,888,671      $  2,792,618
                                            ===============   ===============

                                      -17-

<PAGE>

PART II: MANAGEMENT'S DISCUSSION AND ANALYSIS OF  
         ---------------------------------------
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS
         ---------------------------------------------

Liquidity and Capital Resources
-------------------------------

Due to the sales of both Williamsburg South Apartments and Pleasant Run Farms
Apartments in December of 1996, the Partnership now has sufficient cash to
enable it to not only fund current operations, but also to provide for future
capital improvements. The Partnership had significant negative cash flow from
operations during the first quarter of 1997, primarily due to the setting up of
escrow accounts (replacement, etc.) with lenders. Also as a result of the sales,
the advances made by the General Partner were returned; this will result in a
substantial decrease in interest expense for the future.

The partnership continues to view the refinancing of current mortgages as a
viable means of increasing cash flow by obtaining lower interest rates.

There were no distributions for the three month periods ended March 31,1998 and
1997. The Partnership does expect to resume distributions once it is able to
generate sufficient excess cash flow to complete all capital improvements which
are scheduled and adequate reserves are set up for future such work.

Results of Operations:
----------------------

The partnership experienced a net income of $104,111 or $6.49 per limited
partnership unit for the period ended March 31,1998 versus a net loss of
$309,172 or $19.28 per unit for quarter ended March 31, 1997.

Partnership revenue for the quarter ended March 31, 1998 totaled $716,009 which
is down $71,053 from 1997 revenue of $787,062. Perrymont Office Building
continued to suffer from poor occupancy, which resulted in lower revenues for
the Partnership.

For the quarter ended March 31, 1998, Partnership expenses amounted to $249,915,
decreasing approximately $586,983 from the 1997 quarter end amount. Obviously a
large portion of the decrease in expenses is due to the sale of the two
properties previously mentioned. Additionally though, management continues to
put forth great efforts in looking for ways to decrease payroll, repairs,
maintenance, contracted services and property improvements throughout the
partnership. As an example, on-site maintenance staff is doing more repair and
replacement work as opposed to contracting the work to an outside source. As
property performance improves, expenses will continue to level off. Capital
improvements are being scheduled for the completion prior to the "peak" rental
season.
                                      -18-

<PAGE>

Results of Operations (Continued):
---------------------------------

Tighter collection policies continue to be put into place and reinforced with
all on-site and management staff. This should allow for a rather gradual
increase in revenue in the coming quarters.

On a tax basis, the partnership had a loss of $96,033 or $6.17 per limited
partner unit for the three months period ended March 31, 1998 versus a tax loss
of $247,241 or $15.42 per unit for the quarter ended March 31, 1997.



                                      -19-


<PAGE>


               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP III
               ---------------------------------------------------


                                     PART II
                                     -------

                                OTHER INFORMATION
                                -----------------


Item 1 - Legal Proceedings
--------------------------

The Partnership is not a party to, nor are any of the Partnership's properties
subject to any material pending legal proceedings other than ordinary, routine
litigation incidental to the Partnership's business.

Items 2, 3, 4 and 5
-------------------

Not applicable.

Item 6 - Exhibits and reports on Form 8-K
-----------------------------------------

a)       Exhibits - None.

b)       Reports on Form 8-K - None.



                                      -20-


<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.


REALMARK PROPERTY INVESTORS
LIMITED PARTNERSHIP III



By:      /s/Joseph M. Jayson                           May 20, 1998
         ----------------------------                -------------------------
         Joseph M. Jayson,                                    Date
         Individual General Partner



Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.


By:      REALMARK PROPERTIES, INC.
         Corporate General Partner

         /s/ Joseph M. Jayson                          May 20, 1998
         ------------------------------              ------------------------
         Joseph M. Jayson,                                    Date
         President and Director



         /s/ Michael J. Colmerauer                     May 20, 1998
         ------------------------------              ------------------------
         Michael J. Colmerauer                                Date
         Secretary


                                      -21-