FORM 10-Q

                                  UNITED STATES
                       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 quarterly period ended June 30, 2001

Commission File Number: 0-13331


               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP III
               ---------------------------------------------------
             (Exact name of registrant as specified in its charter)



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


2350 North Forest Road, Suite 12A,Getzville, New York  14068
------------------------------------------------------------
(Address of principal executive offices)

(716) 636-0280
--------------
(Registrant's telephone number)

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  [ ]



<PAGE>
Part I - FINANCIAL INFORMATION
------------------------------
Item 1. Financial Statements
<TABLE>
<CAPTION>
                                Condensed Consolidated Balance Sheets
                                -------------------------------------

                                                                    June 30,            December 31,
                                                                      2001                  2000
                                                                ----------------      ----------------
<S>                                                                 <C>                    <C>
                     Assets
                     ------
Cost of property and equipment, all held for sale in 2001           $13,100,852            13,061,365
Less accumulated depreciation                                         6,581,865             6,581,865
                                                                ----------------      ----------------
                                                                      6,518,987             6,479,500
Cash and equivalents                                                    629,059               599,594
Escrow deposits                                                         405,155               384,074
Other assets                                                            168,615               243,773
                                                                ----------------      ----------------
     Total assets                                                    $7,721,816             7,706,941
                                                                ================      ================

        Liabilities and Partners' Equity
        --------------------------------
Mortgage loans payable                                                4,837,546             4,874,473
Accounts payable and accrued expenses                                   173,266               183,424
Other liabilities                                                       134,650               136,999
Partners' equity                                                      2,576,354             2,512,045
                                                                ----------------      ----------------
     Total liabilities and partners' equity                          $7,721,816             7,706,941
                                                                ================      ================
</TABLE>
<TABLE>
<CAPTION>
                                Condensed Consolidated Statements of Operations
                                -----------------------------------------------

                                                                      Three months ended June 30,     Six months ended June 30,
                                                                  --------------------------------- -----------------------------
                                                                          2001            2000            2001           2000
                                                                  ----------------- --------------- -------------- --------------
<S>                                                                       <C>              <C>          <C>            <C>
Rental income                                                             $601,613         624,461      1,207,086      1,246,281
Other income                                                               105,221          90,376        209,270        157,204
                                                                  ----------------- --------------- -------------- --------------
     Total income                                                          706,834         714,837      1,416,356      1,403,485
                                                                  ----------------- --------------- -------------- --------------
Property operating costs                                                   420,314         440,705        863,971        908,448
Depreciation                                                                     -         115,476              -        230,867
Administrative expense - affiliates                                         95,055          62,611        150,368        127,162
Other administrative expense                                                61,266          74,406        115,850        129,785
Interest                                                                   108,713         110,586        221,858        221,976
                                                                  ----------------- --------------- -------------- --------------
     Total expenses                                                        685,348         803,784      1,352,047      1,618,238
                                                                  ----------------- --------------- -------------- --------------
     Net income (loss)                                                     $21,486         (88,947)        64,309       (214,753)
                                                                  ================= =============== ============== ==============
Net income (loss) per limited partnership unit                               $1.34           (5.55)          4.01         (13.40)
                                                                  ================= =============== ============== ==============
Weighted average limited partnership units                                  15,551          15,551         15,551         15,551
                                                                  ================= =============== ============== ==============
</TABLE>

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<PAGE>
<TABLE>
<CAPTION>
                                Condensed Consolidated Statements of Cash Flows
                                -----------------------------------------------

                                                                                    Six months ended June 30,
                                                                                ---------------------------------
                                                                                     2001             2000
                                                                                ----------------- ---------------
<S>                                                                                     <C>             <C>
Cash provided (used) by:
Operating activities:
     Net income (loss)                                                                  $64,309         (214,753)
     Adjustments:
       Depreciation and amortization                                                          -          245,623
       Other, principally changes in other assets and liabilities                        41,570          (41,528)
                                                                                ----------------- ---------------
                                                                                        105,879          (10,658)
Investing activities-
     additions to property and equipment                                                (39,487)         (51,757)
Financing activities-
     principal payments on mortgage loans                                               (36,927)         (27,412)
                                                                                ----------------- ---------------
Net increase (decrease) in cash and equivalents                                          29,465          (89,827)
Cash and equivalents at beginning of period                                             599,594        1,079,974
                                                                                ----------------- ---------------
Cash and equivalents at end of period                                                  $629,059          990,147
                                                                                ================= ===============
</TABLE>
                          Notes to Financial Statements
                             June 30, 2001 and 2000

Organization
------------

Realmark Property Investors Limited Partnership - III (the Partnership), a
Delaware limited partnership, was formed on November 18, 1983, to invest in a
diversified portfolio of income-producing real estate investments. The general
partners are Realmark Properties, Inc. (the corporate general partner) and
Joseph M. Jayson (the individual general partner). Joseph M. Jayson is the sole
shareholder of J.M. Jayson & Company, Inc. Realmark Properties, Inc. is a
wholly-owned subsidiary of J.M. Jayson & Company, Inc. Under the partnership
agreement, the general partners and their affiliates can receive compensation
for services rendered and reimbursement for expenses incurred on behalf of the
Partnership.

Basis of Presentation
---------------------

The accompanying interim financial statements have been prepared in accordance
with generally accepted accounting principles and, in the opinion of management,
contain all necessary adjustments for a fair presentation. The Partnership's
significant accounting policies are set forth in its December 31, 2000 Form
10-K. The interim financial statements should be read in conjunction with the
financial statements included in that Form 10-K. The interim results should not
be considered indicative of the annual results. Certain reclassifications of
prior period numbers may have been made to conform to the current period
presentation.

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<PAGE>
Property and Equipment
----------------------

The Partnership owns and operates two commercial buildings (Perrymont and
Inducon Amherst) and an apartment complex (Ambassador Towers). All of the
properties are being actively marketed for sale and, therefore, are not being
depreciated. Depreciation not recorded for the three and six months ended June
30, 2001 was approximately $117,000 and $234,000, respectively.

Contingency
-----------

The Partnership, as a nominal defendant, the General Partners of the Partnership
and the officers and directors of the Corporate General Partner, as defendants,
were served with a Summons and Complaint on April 7, 2000 in a class and
derivative lawsuit instituted by Ira Gaines and on August 8, 2000 in a class and
derivative lawsuit instituted by Sean O'Reilly and Louise Homburger, each in
Supreme Court, County of Erie, State of New York. In September 2000, the Court
signed an order consolidating these lawsuits. The consolidated lawsuit alleges
claims of mismanagement and improper use of partnership funds relating to the
Realmark Partnerships. The consolidated lawsuit seeks declaratory relief,
unspecified damages, a receiver, an order liquidating the partnership, punitive
damages, attorneys' fees and related relief. The defendants deny any liability
and intend to vigorously defend this lawsuit. Because of the early stage of this
lawsuit and because there has been no discovery to date, legal counsel cannot
render an opinion as to the likely outcome of this case. The possible effect of
this contingency is not presently determinable and, therefore, the consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

Current Accounting Pronouncements
---------------------------------

Statements of Financial Accounting Standards Nos. 138 and 133, which concern
accounting for derivative instruments and hedging activities, became effective
for the Partnership on January 1, 2001 and did not have any effect on the
Partnership's financial statements.

PART I - Item 2.  Management's Discussion and Analysis of Financial Condition
                  -----------------------------------------------------------
                  and Results of Operations
                  -------------------------

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

The Partnership's cash position for the first six months of 2001 remained steady
at approximately $600,000. Sufficient cash was generated by operations to fund
capital improvements and debt payments.

While there were no cash distributions to partners in the six months ended June
30, 2001, there was a distribution in the last quarter of 2000. The General
Partner plans to consider a distribution later in 2001.

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

For the three and six months ended June 30, 2001, the Partnership's operations,
which exclude depreciation charges, produced net income of $21,000 and $64,000,
respectively, as compared to net income before depreciation in the same 2000
periods of $26,000 and $16,000.

In the quarter ended June 30, 2001, rental income decreased because of vacancy
increases at both commercial properties, while Ambassador's rents were constant.
In the six month period, Ambassador's rent revenue increased almost $40,000, but
that was more than offset by rent decreases of approximately $40,000 at
Perrymont and $35,000 at Inducon. Increases in common area maintenance charges
at Inducon and fee increases at Ambassador led to the increases in other income
in both periods. Thus, total income grew slightly (1%) in the six month period
and decreased slightly (1%) in the second quarter.

Property operations expense decreased $20,000 in the three months ended June 30,
2001, primarily because of a decrease in replacement and renovation costs at
Perrymont. In the six month period, a sharp decrease in such costs at
Ambassador, partially offset by increases in Ambassador's utility and Inducon's

                                       4
<PAGE>
real estate tax expenses, gave rise to the overall decrease in property
operations expense of $45,000. Partnership administrative expenses to affiliates
increased by approximately $33,000 in the quarter ended June 30, 2001 and
$23,000 in the six month period, primarily because of higher property management
fees and an allocation revision. Other administrative expense decreased $13,000
in the second quarter and $14,000 in the six months because of lower
professional fees.

PART I - Item 3.  Quantitative and Qualitative Disclosures About Market Risk
                  ----------------------------------------------------------

The Partnership's cash equivalents are short term, interest bearing bank
accounts and its mortgage loans are fixed-rate. It has not entered into any
derivative contracts. Therefore, it has no market risk exposure.

                                   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 PARTNERHIP III




               August 14, 2001                /s/ Joseph M. Jayson
               ---------------                --------------------
                     Date                     Joseph M. Jayson,
                                              Individual General Partner and
                                              Principal Financial Officer



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