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 September 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

                                Condensed Consolidated Balance Sheets
                                -------------------------------------
<TABLE>
<CAPTION>
                                                                  September 30,          December 31,
                                                                       2001                  2000
                                                                -----------------      ----------------
<S>                                                                  <C>                    <C>
                     Assets
                     ------
Cost of property and equipment, all held for sale in 2001            $13,108,414            13,061,365
Less accumulated depreciation                                          6,581,865             6,581,865
                                                                -----------------      ----------------
                                                                       6,526,549             6,479,500
Cash and equivalents                                                     547,286               599,594
Escrow deposits                                                          240,563               384,074
Other assets                                                             298,517               243,773
                                                                -----------------      ----------------
     Total assets                                                     $7,612,915             7,706,941
                                                                =================      ================

        Liabilities and Partners' Equity
        --------------------------------
Mortgage loans payable                                                 4,818,906             4,874,473
Accounts payable and accrued expenses                                    111,489               183,424
Other liabilities                                                        142,666               136,999
Partners' equity                                                       2,539,854             2,512,045
                                                                -----------------      ----------------
     Total liabilities and partners' equity                           $7,612,915             7,706,941
                                                                =================      ================
</TABLE>


                 Condensed Consolidated Statements of Operations
                 -----------------------------------------------
<TABLE>
<CAPTION>
                                                             Three months ended Sept 30,       Nine months ended Sept 30,
                                                           ---------------------------------  -----------------------------
                                                                  2001            2000             2001            2000
                                                           ---------------------------------  -----------------------------
<S>                                                                <C>             <C>           <C>             <C>
Rental income                                                      $608,060        622,692       1,815,146       1,868,973
Other income                                                         81,531         84,238         290,801         241,442
                                                           -----------------  -------------   -------------   -------------
     Total income                                                   689,591        706,930       2,105,947       2,110,415
                                                           -----------------  -------------   -------------   -------------
Property operating costs                                            465,649        443,351       1,329,620       1,351,799
Depreciation                                                              -        116,792               -         347,659
Administrative expense - affiliates                                  88,482         57,251         238,850         184,413
Other administrative expense                                         63,320         57,174         179,170         186,959
Interest                                                            108,640        130,666         330,498         352,642
                                                           -----------------  -------------   -------------   -------------
     Total expenses                                                 726,091        805,234       2,078,138       2,423,472
                                                           -----------------  -------------   -------------   -------------
     Net income (loss)                                              (36,500)       (98,304)         27,809        (313,057)
                                                           =================  =============   =============   =============
Net income (loss) per limited partnership unit                       ($2.28)        ($6.13)          $1.73         ($19.53)
                                                           =================  =============   =============   =============
Weighted average limited partnership units                           15,551         15,551          15,551          15,551
                                                           =================  =============   =============   =============
</TABLE>

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

                                                                                    Nine months ended September 30,
                                                                                ----------------------------------------
                                                                                         2001                2000
                                                                                ----------------------------------------
<S>                                                                                        <C>                <C>
Cash provided (used) by:
Operating activities:
     Net income (loss)                                                                     $27,809             (313,057)
     Adjustments:
       Depreciation and amortization                                                             -              369,955
       Other, principally changes in other assets and liabilities                           22,499             (109,505)
                                                                                -------------------    -----------------
                                                                                            50,308              (52,607)
Investing activities-
     additions to property and equipment                                                   (47,049)             (70,700)
Financing activities-
     principal payments on mortgage loans                                                  (55,567)             (43,476)
                                                                                -------------------    -----------------
Net increase (decrease) in cash and equivalents                                            (52,308)            (166,783)
Cash and equivalents at beginning of period                                                599,594            1,079,974
                                                                                -------------------    -----------------
Cash and equivalents at end of period                                                     $547,286              913,191
                                                                                ===================    =================
</TABLE>
                          Notes to Financial Statements
                           September 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.

Property and Equipment
----------------------

At September 30, 2001, the Partnership owned and operated 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 nine months ended September 30, 2001 was approximately $117,000 and
$350,000, respectively.

Subsequent to September 30, 2001, on October 18, 2001, the Partnership sold
Ambassador Towers to an unaffiliated entity, for cash of $8,650,000, resulting

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<PAGE>
in a net gain of approximately $5 million. After satisfaction of the $3,046,000
mortgage loan on the property and payment of closing costs, the proceeds
available to the Partnership are approximately $5.1 million. Those proceeds will
be used to satisfy the remaining liabilities related to the property and to make
a distribution to the limited partners.

On a pro forma basis, if the sale of Ambassador Towers had occurred on September
30, 2001, the Partnership's balance sheet on that date would have shown: an
increase in cash and equivalents from $.5 to $5.6 million; decreases in property
of $3.2 million and in mortgage loans of $3.0 million; and an increase in
partnership capital of approximately $5.0 million.

If the property had been sold on January 1, 2000, the pro forma results of
operations for the year ended December 31, 2000 would have been a net loss of
$389,000, resulting from decreases in revenue and expense of $1,949,000 and
$1,981,000, respectively. For the nine months ended September 30, 2001, the pro
forma net loss would have been $239,000, resulting from decreases in revenue and
expense of $1,529,000 and $1,262,000, respectively.

All of the foregoing pro forma operating data excludes the gain on the
disposition of the property and simply reflects the elimination of Ambassador
Tower's operating accounts from the consolidated historical results.

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

The Partnership, as a nominal defendant, the General Partners of all of the
Realmark Partnerships 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
(the"Court"). 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.

While the defendants deny any liability and have vigorously defended this
lawsuit, on August 29, 2001, the parties entered into a Stipulation of
Settlement (the "Agreement"). On October 4, 2001, the Court issued an "Order
Preliminarily Approving Settlement" that, among other things, calls for a
hearing on November 21, 2001 to determine whether the Agreement should be
approved by the Court. The Agreement provides, among other things, that:

   *     $1 million of the amount owed to the General Partners and/or their
         affiliates by Realmark Property Investors Limited Partnership IV be
         forgiven.

   *     The payable to the General Partners and/or their affiliates by Realmark
         Property Investors Limited Partnership VI-A at March 31, 2001, in the
         amount of $481,598, cease to accrue interest.

   *     All of the Realmark Partnerships' properties be disposed of within 360
         days of the hearing order.

The consolidated financial statements do not include any adjustments that might
result from the outcome of this matter, pending the action of the Court.

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.

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<PAGE>
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 nine months of 2001 remained
steady, ranging from $500,000 to $600,000. However, insufficient cash was
generated by operations to fund capital improvements and debt payments.

While there were no cash distributions to partners in the nine months ended
September 30, 2001, there was a distribution in the last quarter of 2000. A
distribution is planned for November 2001.

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

For the three and nine months ended September 30, 2001, the Partnership's
operations, which exclude depreciation charges, produced a net loss of $36,500
and net income of $27,800, respectively, as compared to net income before
depreciation in the same 2000 periods of $18,000 and $35,000.

In the quarter ended September 30, 2001, rental income decreased because of
vacancy increases at both commercial properties, while Ambassador's rents
increased. In the nine month period, Ambassador's rent revenue increased almost
$60,000, but that was more than offset by rent decreases of approximately
$50,000 at Perrymont and $54,000 at Inducon. Increases in common area
maintenance charges at Inducon and fee increases at Ambassador, somewhat offset
by a decrease in interest income, led to the increase in other income in the
nine months ended September 30, 2001. Thus, total income decreased slightly in
the nine month period and decreased 2% in the third quarter.

Property operations expense increased $22,000 in the quarter ended September 30,
2001, and decreased $22,000 in the 2001 nine month period. Repairs and
maintenance expense decreased in both the 2001 periods because of the absence of
major redecorating projects at Perrymont and Ambassador. In both the quarter and
nine months ended September 30, 2001, that cost reduction was offset by
increases in maintenance payroll and real estate taxes at Ambassador; higher
utility costs at Perrymont and higher real estate taxes at Inducon. Partnership
administrative expenses to affiliates increased by approximately $31,000 in the
quarter ended September 30, 2001 and $54,000 in the nine month period, primarily
because of higher property management fees and an allocation revision. Other
administrative expense increased $6,000 in the third quarter and decreased
$22,000 in the nine months because of professional fee variances.


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



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

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