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, 1999                                                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. ( )

As of March 31, 1999, the issuer had 15,551 units of limited partnership
interest outstanding.

<PAGE>

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

                                      INDEX
                                      -----
<TABLE>
<CAPTION>
                                                                            PAGE NO.
                                                                            --------
PART I:  FINANCIAL INFORMATION
-------  ---------------------
                <S>                                                           <C>
                  Balance Sheets -
                           March 31, 1999 and December 31, 1998                 3

                  Statements of Operations -
                           Three Months Ended March 31, 1999 and 1998           4

                  Statements of Cash Flows -
                           Three Months Ended March 31, 1999 and 1998           5

                  Statements of Partners' (Deficit) Capital -
                           Three Months Ended March 31, 1999 and 1998           6

                  Notes to Financial Statements                               7 - 17


PART II: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF
                  ----------------------------------
                  OPERATIONS                                                 18 - 21
                  ----------

PART III:         FINANCIAL DATA SCHEDULE
---------         -----------------------

</TABLE>

                                       -2-
<PAGE>


              REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP III
              ---------------------------------------------------
                                 BALANCE SHEETS
                                 --------------
                      March 31, 1999 and December 31, 1998
                      ------------------------------------
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                 March 31,         December 31,
                                                                   1999               1998
ASSETS                                                             ----               ----
------
<S>                                                           <C>                 <C>

Property, at cost:
       Land                                                   $    777,709        $   777,709
       Buildings and improvements                               10,774,134         10,774,134
       Furniture and fixtures                                      973,753            973,753
                                                              ------------        -----------
                                                                12,525,596         12,525,596
       Less accumulated depreciation                             5,881,113          5,772,493
                                                              ------------        -----------
       Property, net                                             6,644,483          6,753,103


Cash                                                               223,453            387,827
Investments in mutual funds                                      1,407,564          1,390,598
Escrow deposits                                                    354,832            272,310
Accounts receivable, net of allowance for
       doubtful accounts of $223,206 and
       $203,157, respectively                                       16,395              7,812
Accounts receivable - affiliates                                   115,305            103,210
Mortgage costs, net of accumulated
       amortization of $77,409 and $59,577                         131,098            148,930
Leasing commissions, net of accumulated
       amortization of $135,405 and $134,931                         1,099              1,573
Other assets                                                        37,322             48,554
                                                               -----------        -----------

             Total Assets                                      $ 8,931,551        $ 9,113,917
                                                               ===========        ===========

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

Liabilities:
       Mortgages payable                                       $ 4,967,336        $ 4,970,797
       Accounts payable and accrued expenses                       184,084            150,707
       Accrued interest                                             58,008             36,249
       Security deposits and prepaid rents                         129,714            118,612
                                                               -----------        -----------
                  Total Liabilities                              5,339,142          5,276,365
                                                               -----------        -----------

Partners' (Deficit) Capital:
       General partners                                            (47,682)           (40,328)
       Limited partners                                          3,640,091          3,877,880
                                                               -----------          ---------
               Total Partners' (Deficit)                         3,592,409          3,837,552
                                                               -----------          ---------

               Total Liabilities and
                     Partners' (Deficit)                       $ 8,931,551        $ 9,113,917
                                                               ===========        ===========

</TABLE>

                        See notes to financial statements


                                      -3-

<PAGE>


              REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP III
              ---------------------------------------------------
                            STATEMENTS OF OPERATIONS
                            ------------------------
                   Three Months Ended March 31, 1999 and 1998
                   ------------------------------------------
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                        Three Months             Three Months
                                                           Ended                     Ended
                                                         March 31,                 March 31,
                                                            1999                     1998
                                                            ----                     ----
<S>                                                    <C>                      <C>
Income:
   Rental                                              $  576,791               $  476,848
   Interest and other income                               68,663                  239,161
   Total income                                        ----------               ----------
                                                          645,454                  716,009
                                                       ----------               ----------

Expenses:
   Property operations                                    526,747                  249,915
   Interest:
      To affiliates                                          --                     27,118
      Other                                               108,272                  104,164
   Depreciation and amortization
   Partnership operations:                                126,926                  126,928
      To affiliates                                        41,838                   26,860
      Other                                                86,814                   76,913
                                                       ----------               ----------
   Total expenses                                         890,597                  611,898
                                                       ----------               ----------


Net (loss) income                                      $ (245,143)              $  104,111
                                                       ==========               ==========

(Loss) income per limited partnership unit             $   (15.29)              $     6.49
                                                       ==========               ==========

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

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

</TABLE>


                        See notes to financial statements


                                       -4-

<PAGE>


              REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP III
              ---------------------------------------------------
                            STATEMENTS OF CASH FLOWS
                            ------------------------
                   Three Months Ended March 31, 1999 and 1998
                   ------------------------------------------
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                Three Months                 Three Months
                                                                   Ended                        Ended
                                                                 March 31,                     March 31,
                                                                    1999                         1998
                                                                    ----                         ----
<S>                                                             <C>                            <C>
Cash flow from operating activities:
   Net (loss) income                                            $(245,143)                     $104,111

Adjustments to reconcile net (loss) income to
   net cash (used in) provided by operating
   activities:
   Depreciation and amortization                                  126,926                       126,454
Changes in operating assets and liabilities:
   Cash - security deposits                                          --                         (54,665)
   Investment in money market account                             (16,966)                      993,997
   Escrow deposits                                                (82,522)                       12,292
   Accounts receivable                                             (8,583)                       (2,115)
   Leasing commissions                                               --                            --
   Other assets                                                    11,232                        22,321
   Accounts payable and accrued expenses                           33,377                          (228)
   Accrued interest                                                21,759                            89
   Security deposits and prepaid rent                              11,102                       (13,498)
                                                                ---------                     ---------
Net cash (used in) provided by operating activities              (148,818)                    1,188,758
                                                                ---------                     ---------

Cash flow from investing activities:
   Capital expenditures                                              --                          (7,750)
   Accounts receivable - affiliates                               (12,095)                          --
                                                                ---------                     ---------

Net cash used in investing activities                             (12,095)                       (7,750)
                                                                ---------                     ---------

Cash flows from financing activities:
   Accounts payable - affiliates                                     --                         (12,467)
   Principal payments on mortgages and notes                       (3,461)                   (1,626,114)
   Proceeds from mortgage refinancing                                --                         360,765
   Mortgage costs                                                    --                            --
                                                                ---------                   -----------
Net cash used in financing activities                              (3,461)                   (1,277,816)
                                                                ---------                   -----------

(Decrease) in cash                                               (164,374)                      (96,808)

Cash - beginning of period                                        387,827                       857,649
                                                                ---------                   -----------

Cash - end of period                                            $ 223,453                   $   760,841
                                                                =========                   ===========
Supplemental Disclosure of Cash Flow Information:
   Cash paid for interest                                       $  86,513                   $   131,193
                                                                =========                   ===========

</TABLE>


                        See notes to financial statements


                                      -5-

<PAGE>

               REALMARKPROPERTY INVESTORS LIMITED PARTNERSHIP III
               --------------------------------------------------
                    STATEMENTS OF PARTNERS' (DEFICIT) CAPITAL
                    -----------------------------------------
                   Three Months Ended March 31, 1999 and 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                                  3,123                   --                 100,988
                                      -----------            -----------           -----------

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


Balance, January 1, 1999              $   (40,328)                15,551           $ 3,877,880


Net loss                                   (7,354)                  --                (237,789)
                                      -----------            -----------           -----------

Balance, March 31 ,1999               $   (47,682)                15,551           $ 3,640,091
                                      ===========            ===========           ===========

</TABLE>

                        See notes to financial statements


                                       -6-

<PAGE>


               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP III
               ---------------------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                   Three Months Ended March 31, 1999 and 1998
                   ------------------------------------------
                                   (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, 1999 and 1998 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
        --------------------------------------

        Realmark Property 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 certain services rendered and reimbursement for
        certain 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.

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

        Depreciation is provided using the straight-line method over the
        estimated useful lives of the respective assets. 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.


                                       -8-

<PAGE>

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

        Investments in mutual funds
        ---------------------------

        The investments in mutual funds are stated at fair value, which
        approximates cost, at March 31, 1999.

        Comprehensive Income
        --------------------

        The Partnership has adopted Statement of Financial Accounting Standards
        (SFAS) No. 130, Reporting Comprehensive Income. SFAS 130 establishes
        standards for reporting and display of comprehensive income and its
        components in a full set of general purpose financial statements.
        Comprehensive income is defined as "the change in equity of a business
        during a period from transactions and other events and circumstances
        from non-owner sources". Other than net income (loss), the Partnership
        has no other sources of comprehensive income.

        Segment Information
        -------------------

        SFAS No. 131, Disclosures about Segments of an Enterprise and Related
        Information establishes standards for the way public business
        enterprises report information about operating segments in annual
        financial statements. The Partnership's only operating segment is the
        ownership and operation of income- producing real property for the
        benefit of its limited partners.

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 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.


                                       -9-
<PAGE>

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

        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.

        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 June 1985 the Partnership acquired a 200 unit apartment complex
        (Williamsburg South Apartments) in Atlanta, Georgia for a purchase price
        of $5,138,745, which included acquisition fees of $368,745.

        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 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
        sales price of $5,160,000, less related fees of approximately $174,000.
        The sale generated a total net gain of $3,095,376 for financial
        statement purposes.


                                      -10-

<PAGE>

5.      INVESTMENT IN JOINT VENTURES
        ----------------------------

        In April 1985 the Partnership entered into an agreement and formed the
        Inducon Joint Venture - Amherst (the Joint Venture), for the primary
        purpose of constructing office/warehouse buildings in Erie County, New
        York as income producing property. The site is part of the Amherst
        Foreign Trade Zone. This is U.S. Customs Territory under federal
        supervision, where foreign and domestic merchandise is brought for
        storage, manufacturing, salvage, repair, exhibit, repacking, relabeling
        or re-export. Under the terms of the joint venture agreement, the
        Partnership supplied $545,000 of capital to acquire the land and
        undertake initial development of Phase I and $275,000 for Phase II. The
        other Joint Venturer delivered and completed on behalf of the Joint
        Venture all plans, specifications, maps, surveys, accounting pro-formas
        for construction, initial leasing and operations, and cost estimates
        with respect to development.

        Ownership of the Joint Venture was divided equally between the
        Partnership and the other Joint Venturer. The Joint Venture agreement
        provided that the Partnership will be allocated 95% of any income or
        loss.

        Net cash flow from the Joint Venture was to be distributed as follows:

        To the Partnership until it has received a return of 7% per annum on its
        underwritten syndicated equity. To the extent a 7% return is not
        received from year to year, it will accrue and be paid from the next
        available cash flow.

        To the other Joint Venturer in an amount equal to that paid to the
        Partnership. No amount will accumulate in favor of the other investor.

        Any remaining amount was to be divided equally.

        To the extent there were net proceeds from any sale or refinancing of
        the subject property, the proceeds were to be paid in the following
        order of priority:

        To the Partnership to the extent the 7% per annum returned on its
        underwritten equity is unpaid.

        Next to the Partnership until it had received an overall 9% cumulative
        return on its underwritten equity.

        Next to the Partnership until it had received an amount equal to its
        total underwritten equity, reduced by any prior distribution of sale,
        financing or refinancing proceeds.


                                      -11-
<PAGE>

        INVESTMENT IN JOINT VENTURES  (CONTINUED)
        -----------------------------------------

        Next to the Partnership until it had received a cumulative 20% per year
        return on its total underwritten equity.

        Thereafter any remaining net proceeds were to be divided 50% to the
        Partnership and 50% to the other joint venturer.

        In November 1997, the Partnership acquired the interest of Delhurst
        Corporation, the other joint venture partner, for $55,000. The
        Partnership now owns 100% of the Inducon Amherst property. The property
        began to be consolidated into the Partnership's financial statements
        beginning November 1, 1997.


6.      MORTGAGES PAYABLE
        -----------------

        Inducon Amherst
        ---------------

        A mortgage with a balance of $1,837,287 and $1,856,129 at March 31, 1999
        and 1998, respectively. The mortgage provides for monthly principal and
        interest payments of $15,250 at an interest rate of 8.62%. The balance
        of the mortgage note is due March 2022.

        Ambassador Towers (formerly Cedar Ridge)
        ----------------------------------------

        A mortgage with a balance of $3,130,049 at both March 31, 1999 and 1998,
        providing for monthly interest payments only for the first two years of
        the mortgage. The interest rate is 8.275% during the first year of the
        loan 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
        United States Treasury Securities (8.25% at March 31, 1999), adjusted to
        a constant maturity of five years. Principal payments will begin in the
        third year of the mortgage. The note matures February 2004.

        The above mortgages are secured by the properties to which they relate.


                                      -12-
<PAGE>

        MORTGAGES PAYABLE  (CONTINUED)
        ------------------------------

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

                  Year                                          Amount
                  ----                                          ------

                  1999                                        $    69,107
                  2000                                             71,674
                  2001                                             77,927
                  2002                                             84,726
                  2003                                             92,119
                  Thereafter                                    4,575,244
                                                              -----------

                  TOTAL                                       $ 4,970,797
                                                              ===========


7.      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 and deposit
        liabilities approximate the carrying value due to the short-term nature
        of these instruments.

        Management has estimated that the fair value of the mortgages at March
        31, 1999 on Ambassador Towers and Inducon Amherst approximate their
        carrying values of $3,130,049 and $1,837,287, respectively, as the
        mortgages were obtained recently.


                                      -13-
<PAGE>

8.      RELATED PARTY TRANSACTIONS
        --------------------------

        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, provided
        such amount is not in excess of the competitive rate for the same
        geographic area. These fees totaled $21,600 and $26,860 for the three
        months ended March 31, 1999 and 1998, respectively.

        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, 1999 and 1998.

        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%.

        Accounts receivable - affiliates amounted to $115,305 at March 31, 1999.
        The balance due is payable on demand. Interest charged on amounts due
        from affiliates is accrued at the rate of 11% per annum compounded
        quarterly based on the average outstanding balance.


                                      -14-
<PAGE>

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

        Accounts payable - 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. Interest charged on amounts due affiliates was
        accrued at the rate of 11% per annum compounded quarterly based on the
        average outstanding balance.

        Pursuant to the terms of the Partnership agreement, the corporate
        general partner charges the Partnership for reimbursement of certain
        costs and expenses incurred on behalf of or in connection with the
        Partnership. These charges were for the Partnership's allocated share of
        costs and expenses related to, among other things, partnership
        accounting, partner communication and relations, and disposition of
        properties. Certain expenses are allocated based on total assets, number
        of partners and number of units, respectively.

        Computer service charges for the Partnership are paid or accrued to an
        affiliate of the General Partner based, in part, upon the number of
        apartment units and complexes. Such amounts totaled $1,335 and $8,295
        for the three months ended March 31, 1999 and 1998, respectively.

9.      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.


                                      -15-
<PAGE>

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

        The reconciliation of net loss for the three month periods ended March
        31, 1999 and 1998 as reported in the statements of operations, and as
        would be reported for tax purposes respectively, is as follows:

                                                      March 31,        March 31,
                                                        1999             1998
                                                        ----             ----
        Net (loss) income -
             Statement of operations                 $(245,143)        $104,111
        (Add to) deduct from:
             Difference in depreciation                 30,000          (22,660)
             Difference in amortization                   --              2,115
             Non-deductible expenses                   (90,000)          12,467
             Difference in loss of joint venture          --               --
                                                     ---------         --------

        Net (loss) income for tax purposes           $(305,143)        $ 96,033
                                                     =========         ========


                                      -16-
<PAGE>

        INCOME TAXES  (CONTINUED)

        The reconciliation of partner's (deficit) capital at March 31, 1999 and
        December 31, 1998 as reported in the balance sheets, and as reported for
        tax purposes, is as follows:

                                               March 31,          December 31,
                                                 1999                 1998
                                                 ----                 ----

Partner's Capital -
 balance sheet                              $ 3,592,409           $ 3,837,552
 Add to (deduct from):
      Accumulated difference in
      depreciation                           (4,239,360)           (4,269,360)
      Accumulated difference in
      amortization                               77,418                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             (416,749)             (326,749)
     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 Capital -
tax return                                  $ 2,115,024           $ 2,420,167
                                            ===========           ===========


                                      -17-
<PAGE>

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

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

        Although the Partnership showed a significant cash shortfall for the
        first three months of 1999, management believes there is sufficient cash
        to complete scheduled capital improvements and maintenance at the three
        properties remaining in the Partnership, while also funding the
        properties' operating activities. Management continues to be optimistic
        that expenses will decrease as tighter control is being exercised over
        expenditures. Management is also focusing its efforts heavily on ways to
        increase operating revenue.

        The General Partner began substantial capital improvement work at the
        Perrymont Office Building, including re-facing the exterior of the
        building, resealing of the parking lot, replacement of hallway
        carpeting, redecorating of all common area restrooms, and new signage.
        Work is expected to cost approximately $270,000 and be completed during
        the fall of 1999. It is believed that the physical improvements to the
        exterior of the building and the common parts of the interior will
        increase the curb appeal of the building and therefore attract new
        tenants.

        There were no distributions for the three month periods ended March 31,
        1999 and 1998. The Partnership has been using the cash generated from
        operations and the sales which took place in 1996 and 1997 to complete
        necessary capital improvements (both capitalizable and
        non-capitalizable) and deferred and routine maintenance at the remaining
        properties in the Partnership. Additionally, in April 1998, management
        used cash from the Partnership to satisfy the mortgage on the Perrymont
        Building; this action not only avoided foreclosure procedings, but also
        led to a sizable discount from the lender which resulted in an
        extraordinary gain totaling $318,213 recognized for financial statement
        purposes during the year ended December 31, 1998. The General Partner
        hopes to resume distributions in the future, although it is not certain
        when the Partnership will be in such a position.


                                      -18-
<PAGE>

        Liquidity and Capital Resources (Continued)
        -------------------------------------------

        The Partnership has conducted a review of its computer systems to
        identify the systems that could be affected by the "year 2000 issue" and
        has substantially developed an implementation plan to resolve such
        issues. The year 2000 issue is the result of computer programs being
        written using two digits rather than four digits to define the
        applicable year. Computer programs that have time-sensitive software may
        recognize a date using "00" as the year 1900 rather than the year 2000.
        This could result in a system failure or miscalculations causing
        disruptions of operations, including, among other things, a temporary
        inability to process transactions, send invoices, or engage in similar
        normal business activities. Management has discussed with outside
        independent computer consultants its readiness for the Year 2000. The
        majority of the software in use is either "2000 compliant" or will be
        with little adaptation and at no significant cost per information
        provided by their software providers. Management has also engaged a
        computer firm to re-write its tax software making it Year 2000
        compliant. This work began May 1, 1999 and is expected to take three
        months. Management has a complete inventory of its computers and feels
        that the cost of replacing those which will not be "2000 compliant" will
        be relatively minor (i.e., most likely under $20,000). Non-informational
        systems have also been evaluated and management feels that there will be
        little, if any, cost to preparing these for the Year 2000 (i.e., most
        likely under $20,000). Management expects to be fully Year 2000
        compliant with all testing done by September 30, 1999. The Partnership
        is working on a contingency plan in the unlikely event that its systems
        do not operate as planned. It is management's belief that in the
        unlikely event that its informational systems do not operate as planned
        in the year 2000, all records could be maintained manually until the
        problems with its systems are resolved. Management feels that its
        external vendors, suppliers and customers, for the most part, will be
        unaffected by the Year 2000 as most do not rely on information systems
        in their businesses.

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

        For the quarter ended March 31, 1999, the Partnership's net loss was
        $245,143 or $15.29 per limited partnership unit. Net income for the
        quarter ended March 31, 1998 amounted to $104,111 or $6.49 per unit.


                                      -19-
<PAGE>

        Results of Operations  (continued):
        -----------------------------------

        Partnership revenue for the quarter ended March 31, 1999 totaled
        $645,454, a decrease of approximately $71,000 from the 1998 amount of
        $716,009. Total rental revenue increased almost $100,000, while interest
        and other income decreased by approximately $171,000. Rental revenue
        increased primarily due to increased occupancy at Ambassador Towers. At
        March 31, 1999, occupancy at this complex was almost 92%; this complex
        has seen a steady increase in its occupancy due to various "new and
        innovative" ideas for services which are now being provided to
        residents, such as a van service to local shopping plazas, etc., dry
        cleaning and travel services. Vacancies at Ambassador Towers decreased
        by approximately 32% or $27,000 between the three months ended March 31,
        1999 and 1998. The Perrymont Office Building has also begun to see an
        increase in occupancy. Net rental income for this property has increased
        approximately 17% or $15,000 between the quarters ended March 31, 1999
        and 1998. Management believes that scheduled improvements to the
        properties will continue to result in increased occupancies and
        hopefully improved cash flow by the end of 1999. The decrease in
        interest and other income is primarily the result of an estimated gain
        of approximately $135,000 recorded at March 31, 1998 due to the
        satisfaction of the Perrymont mortgage.

        For the three months ended March 31, 1999, Partnership expenses amounted
        to $890,597, increasing approximately $279,700 from the same 1998
        quarter amount which totaled $611,898. Property operations expenses
        increased by approximately 110% between the three months ended March 31,
        1999 and 1998 when they totaled $526,747 and $249,915, respectively. The
        majority of this increase is attributed to the installation of new
        carpeting, cabinets, appliances, wallpaper, mirrors, etc. in various
        apartments throughout Ambassador Towers. The increase in these expenses
        at Ambassador Towers totaled approximately $115,000 between the three
        months ended March 31, 1999 and 1998. Additionally, increased payroll
        and associated expenses resulting from more repairs and maintenance at
        the properties being completed by on-site personnel contributed to the
        increased property operations expenses. Finally, increased contracted
        service expenses were also incurred during the three month period ended
        March 31, 1999 as a result of work being done to follow management's
        plan for physical improvements to the properties. Depreciation and
        amortization expense remained virtually the same between the three
        months ended March 31, 1999 and 1998.


                                      -20-
<PAGE>

        Results of Operations  (continued):
        -----------------------------------

        Partnership operational expenses paid to affiliates increased by
        approximately $15,000 between the quarters ended March 31, 1999 and
        1998. This increase was the result of increased accounting and portfolio
        management expenses charged and/or incurred on behalf of the Partnership
        by the General Partners and/or one of its affiliates. Other Partnership
        operational costs also increased when comparing the three month periods
        ended March 31, 1999 and 1998; this increase totaled approximately
        $10,000 and was due to increased advertising and legal expenses incurred
        by the Partnership. Management expects to see higher than average (i.e.,
        higher than "normally" expected) maintenance expenses and payroll in the
        next several months as the properties continue to undergoing physical
        improvements, many of which are being done by in-house labor, such as
        painting.

        On a tax basis, the partnership had a loss of $305,143 or $19.03 per
        limited partner unit for the three month period ended March 31, 1999
        versus a taxable income of $96,033 or $5.99 per unit for the three month
        period ended March 31, 1998.


                                      -21-
<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
        -----------------------------------------

        None.


                                      -22-
<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, and in the capacities and on the
        dates indicated.


        REALMARK PROPERTY INVESTORS
        LIMITED PARTNERSHIP III



        By:  /s/  Joseph M. Jayson                       June 24, 1999
             ---------------------                       -------------
             Joseph M. Jayson,                           Date
             Individual General Partner and
             Principal Financial Officer


                                      -23-