March 30, 2000



United States
Securities and Exchange Commission
Washington, D.C.  20549


RE:   Consolidated Capital Properties III
      Form 10-KSB
      File No. 0-10273


To Whom it May Concern:

The  accompanying  Form 10-KSB for the year ended  December 31, 1999 describes a
change in the method of  accounting to  capitalize  exterior  painting and major
landscaping,   which  would  have  been  expensed  under  the  old  policy.  The
Partnership believes that this accounting principle change is preferable because
it  provides a better  matching  of  expenses  with the  related  benefit of the
expenditures and it is consistent with industry practice and the policies of the
General Partner.

Please do not hesitate to contact the undersigned with any questions or comments
that you might have.

Very truly yours,



Stephen Waters
Real Estate Controller


<PAGE>


               FORM 10-KSB--ANNUAL OR TRANSITIONAL REPORT UNDER

                               SECTION 13 OR 15(d)

                                   Form 10-KSB

(Mark One)
[X]   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934
      [No Fee Required]

                 For the fiscal year ended December 31, 1999

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934
      [No Fee Required]

             For the transition period from _________to _________

                         Commission file number 0-10273

                     CONSOLIDATED CAPTIAL PROPERTIES III
                (Name of small business issuer in its charter)

         California                                              94-2653686
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                          55 Beattie Place, PO Box 1089
                       Greenville, South Carolina 29602
                   (Address of principal executive offices)

                   Issuer's telephone number (864) 239-1000

        Securities registered under Section 12(b) of the Exchange Act:

                                      None

        Securities registered under Section 12(g) of the Exchange Act:

                     Units of Limited Partnership Interests

                                (Title of class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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___

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will 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-KSB or any
amendment to this Form 10-KSB. [ ]

State issuer's revenues for its most recent fiscal year.  $3,109,000

State the aggregate  market value of the voting  partnership  interests  held by
non-affiliates  computed  by  reference  to the price at which  the  partnership
interests  were sold,  or the average bid and asked  prices of such  partnership
interests, as of December 31, 1999. No market exists for the limited partnership
interests of the Registrant,  and,  therefore,  no aggregate market value can be
determined.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None

<PAGE>

                                     PART I

Item 1.     Description of Business

Consolidated  Capital  Properties III (the  "Partnership" or  "Registrant")  was
organized on May 22, 1980 as a limited  partnership under the California Uniform
Limited Partnership Act. Commencing November 25, 1980, the Partnership  offered,
pursuant to a  Registration  Statement  filed with the  Securities  and Exchange
Commission (the "SEC"),  $120,000 of units of limited partnership  interest (the
"Units"),  with the general  partner's right to increase the offering to 240,000
units.  The Units represent  equity interests in the Partnership and entitle the
holders thereof to participate in certain  allocations and  distributions of the
Partnership.  The sale of Limited Partnership Units closed on December 17, 1981,
with 158,945 Units sold at $500 each, or gross  proceeds of  $79,473,000  to the
Partnership.  The original general partners contributed capital in the amount of
$1,000 for a 4% interest in the  Partnership.  At the request of certain Limited
Partners and in accordance  with its Partnership  Agreement  (herein so called),
the  Partnership  has  retired a total of 363  Units.  The  Partnership  gave no
consideration  for these units.  The  Partnership  Agreement  provides  that the
Partnership is to terminate on December 31, 2010 unless terminated prior to such
date.

By the end of fiscal year 1985,  approximately  71% of the  proceeds  raised had
been invested in twenty-eight properties. Of the remaining 29%, 11% was required
for  organizational  and offering  expenses,  sales  commissions and acquisition
fees, and 18% was retained in Partnership  reserves for project improvements and
working  capital as required  by the  Partnership  Agreement.  Since its initial
offering,  the Registrant has not received, nor are limited partners required to
make, additional capital contributions.

Upon  the  Partnership's   formation  in  1980,  Consolidated  Capital  Equities
Corporation ("CCEC"), a Colorado corporation, was the corporate general partner.
In 1988, through a series of transactions,  Southmark Corporation  ("Southmark")
acquired  controlling  interest  in CCEC.  In  December  1988,  CCEC  filed  for
reorganization  under Chapter 11 of the United States  Bankruptcy Code. In 1990,
as part of CCEC's  reorganization  plan, Concap Equities,  Inc. ("CEI") acquired
CCEC's general partner  interests in the Partnership and in 15 other  affiliated
public limited  partnerships  (the "Affiliated  Partnerships")  and CEI replaced
CCEC as managing general partner in all 16 partnerships. The selection of CEI as
the sole  managing  general  partner  was  approved by a majority of the Limited
Partners in the Partnership and in each of the Affiliated  Partnerships pursuant
to a solicitation of the Limited Partners dated August 10, 1990. As part of this
solicitation, the Limited Partners also approved an amendment to the Partnership
Agreement to limit changes of control of the Partnership. CEI is a subsidiary of
Apartment Investment and Management Company ("AIMCO").

The  Registrant  is engaged in the business of operating and holding real estate
properties for  investment.  At December 31, 1999, the  Partnership  owned three
apartment  complexes.  Prior to 1999,  the  Partnership  disposed of  twenty-six
properties,  two of which were reacquired through foreclosure.  During 1999, the
Partnership sold its remaining commercial property.  See "Item 2. Description of
Properties" below for a description of the Partnership's remaining properties.

The  real  estate  business  in which  the  Partnership  is  engaged  is  highly
competitive.  There are other  residential  properties within the market area of
the Partnership's properties.  The number and quality of competitive properties,
including those which may be managed by an affiliate of the General Partner,  in
such  market  area,  could have a material  effect on the rental  market for the
apartments at the Partnership's properties and the rents that may be charged for
such apartments. While the General Partner and its affiliates own and/or control
a  significant  number of  apartment  units in the  United  States,  such  units
represent an insignificant percentage of the total apartment units in the United
States and competition for the apartments is local. In addition, various limited
partnerships have been formed by the General Partner and/or affiliates to engage
in business which may be competitive with the Partnership.

Both  the  income  and  expenses  of  operating  the  properties  owned  by  the
Partnership are subject to factors outside of the Partnership's control, such as
changes in the supply and demand of similar  properties  resulting  from various
market  conditions,  increases/decreases  in unemployment or population  shifts,
changes in the availability of permanent mortgage  financing,  changes in zoning
laws,  or changes in patterns or needs of users.  In  addition,  there are risks
inherent in owning and operating residential  properties because such properties
are  susceptible to the impact of economic and other  conditions  outside of the
control of the Partnership.

The Registrant  has no employees.  Management  and  administrative  services are
provided by the General Partner and by agents  retained by the General  Partner.
An affiliate of the General Partner has been providing such property  management
services.

There have been, and it is possible there may be other, Federal, state and local
legislation  and  regulations   enacted   relating  to  the  protection  of  the
environment.  The Partnership is unable to predict the extent,  if any, to which
such new  legislation  or  regulations  might occur and the degree to which such
existing or new legislation or regulations might adversely affect the properties
owned by the Partnership.

The Partnership  monitors its properties for evidence of pollutants,  toxins and
other dangerous substances, including the presence of asbestos. In certain cases
environmental  testing has been performed which resulted in no material  adverse
conditions or liabilities.  In no case has the Partnership  received notice that
it is a potentially  responsible party with respect to an environmental clean up
site.

A further description of the Partnership's business is included in "Management's
Discussion and Analysis or Plan of Operation"  included in "Item 6" of this Form
10-KSB.

Transfer of Control

Pursuant  to a series  of  transactions  which  closed  on  October  1, 1998 and
February 26, 1999,  Insignia Financial Group, Inc. and Insignia Properties Trust
merged into AIMCO, a publicly traded real estate  investment  trust,  with AIMCO
being the surviving  corporation  (the "Insignia  Merger").  As a result,  AIMCO
acquired 100% ownership  interest in the General  Partner.  The General  Partner
does not believe that this transaction has had or will have a material effect on
the affairs and operations of the Partnership.


<PAGE>


Item 2.     Description of Properties

The following table sets forth the Partnership's investments in properties:

                                 Date of
Property                         Purchase      Type of Ownership         Use

Ventura Landing Apartments       10/07/81  Fee ownership subject to   Apartment
  Orlando, Florida                         a first mortgage           184 units

Village Green Apartments         12/20/91  Fee ownership subject to   Apartment
  Altamonte Springs, Florida               a first mortgage (1)       164 units

West Chase Apartments            09/17/90  Fee ownership subject to   Apartment
  Lexington, Kentucky                      a first mortgage           120 units

(1)   Property is held by a limited  partnership in which the Registrant  owns a
      99% interest.

Schedule of Properties

Set forth below for each of the  Registrant's  properties is the gross  carrying
value,  accumulated  depreciation,  depreciable life, method of depreciation and
Federal tax basis.
<TABLE>
<CAPTION>

                           Gross
                          Carrying   Accumulated    Useful               Federal
Property                   Value    Depreciation     Life    Method     Tax Basis
                              (in thousands)                         (in thousands)

<S>                       <C>          <C>         <C>                   <C>
Ventura Landing           $ 5,505      $ 4,506     5-19 yrs    S/L       $ 1,076
Village Green               3,137        1,502     3-15 yrs    S/L         3,845
West Chase                  2,485        1,390     5-15 yrs    S/L         1,973

         Total            $11,127      $ 7,398                           $ 6,894
</TABLE>

See  "Note A" of the  consolidated  financial  statements  included  in "Item 7.
Financial Statements" for a description of the Partnership's depreciation policy
and "Note K - Change in Accounting Principle".


<PAGE>


Schedule of Property Indebtedness

The  following  table  sets  forth  certain  information  relating  to the loans
encumbering the Registrant's properties.
<TABLE>
<CAPTION>

                       Principal                                         Principal
                       Balance At                                         Balance
                      December 31,    Interest    Period    Maturity      Due At
     Property             1999          Rate     Amortized    Date     Maturity (2)
                     (in thousands)                                   (in thousands)

<S>                     <C>            <C>          <C>       <C>         <C>
Ventura Landing         $ 2,200        7.33%        (1)       11/03       $ 2,200
Village Green             2,000        7.33%        (1)       11/03         2,000
West Chase                1,150        7.87%      20 yrs      12/19            --

      Totals            $ 5,350                                           $ 4,200
</TABLE>


(1)   Interest only payments.

(2)   See "Item 7. Financial  Statements - Note F" for information  with respect
      to the  Registrant's  ability  to prepay  these  loans and other  specific
      details about the loans.

Rental Rates and Occupancy

Average  annual  rental rates and  occupancy for 1999 and 1998 for each property
are as follows:

                                       Average Annual             Average Annual
                                        Rental Rates                 Occupancy
                                         (per unit)
 Property                           1999             1998         1999      1998

 Ventura Landing                    6,908            6,547         93%       95%
 Village Green                      6,710            6,445         96%       98%
 West Chase                         6,139            6,264         93%       85%

The  General  Partner  attributes  the  increase  in  occupancy  at  West  Chase
Apartments to increased concessions offered late in 1998 and increased marketing
efforts in 1999.

As noted under "Item 1.  Description of Business",  the real estate  industry is
highly competitive.  All of the properties are subject to competition from other
residential  apartment  complexes in the area. The General Partner believes that
the Partnership's  properties are adequately insured.  Each residential property
is an apartment  complex  which  leases units for terms of one year or less.  No
residential  tenant leases 10% or more of the available rental space. All of the
properties are in good physical  condition,  subject to normal  depreciation and
deterioration as is typical for assets of this type and age.


<PAGE>


Real Estate Taxes and Rates

Real estate taxes and rates in 1999 for each property are as follows:

                                1999            1999
                              Billing           Rate
                           (in thousands)

Ventura Landing                 $90            2.35%
Village Green                    75            1.96%
West Chase                       19            0.98%

Capital Improvements

Ventura Landing

In  1999,  the   Partnership   completed   approximately   $354,000  of  capital
improvements  at  Ventura  Landing,  consisting  primarily  of carpet  and vinyl
replacement,  lighting  and  plumbing  upgrades,  structural  improvements,  and
appliances. These improvements were funded from cash provided by operations. The
Partnership  is  currently  evaluating  the  capital  improvement  needs  of the
property for the upcoming year. The minimum amount to be budgeted is expected to
be $300 per unit or $55,200.  Additional improvements may be considered and will
depend on the physical condition of the property as well as replacement reserves
and anticipated cash flow generated by the property.

Village Green

In  1999,  the   Partnership   completed   approximately   $312,000  of  capital
improvements,  consisting  primarily of carpet and vinyl  replacement,  fencing,
swimming pool improvements,  appliances,  air conditioning units, and structural
and other  building  improvements.  These  improvements  were  funded  from cash
provided by operations and  Partnership  reserves.  The Partnership is currently
evaluating the capital  improvement needs of the property for the upcoming year.
The  minimum  amount to be  budgeted is expected to be $300 per unit or $49,200.
Additional  improvements  may be  considered  and will  depend  on the  physical
condition of the property as well as replacement  reserves and anticipated  cash
flow generated by the property.

West Chase

In  1999,  the   Partnership   completed   approximately   $228,000  of  capital
improvements, consisting primarily of structural and other building improvements
plumbing,  heating and parking lot upgrades,  and carpet and vinyl  replacement.
These improvements were funded from cash provided by operations. The Partnership
is currently  evaluating the capital  improvement  needs of the property for the
upcoming year. The minimum amount to be budgeted is expected to be $300 per unit
or $36,000.  Additional  improvements  may be considered  and will depend on the
physical  condition  of  the  property  as  well  as  replacement  reserves  and
anticipated cash flow generated by the property.

Professional Plaza

In  1999,   the   Partnership   completed   approximately   $42,000  of  capital
improvements,  consisting  primarily of tenant  improvements.  This property was
sold July 8, 1999 (see "Item 6. Management's  Discussion and Analysis or Plan of
Operation" for further details).


<PAGE>


The  capital  improvements  planned  for  the  year  2000  at the  Partnership's
properties will be made only to the extent of cash available from operations and
Partnership  reserves. To the extent that such budgeted capital improvements are
completed,  the Registrant's  distributable  cash flow, if any, may be adversely
affected at least in the short term.

Item 3.     Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial  Group,  Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs  named as defendants,  among others,
the   Partnership,   the  General  Partner  and  several  of  their   affiliated
partnerships  and corporate  entities.  The action  purports to assert claims on
behalf of a class of limited  partners and derivatively on behalf of a number of
limited  partnerships  (including  the  Partnership)  which are named as nominal
defendants,  challenging  the  acquisition  by Insignia  Financial  Group,  Inc.
("Insignia")  and  entities  which  were,  at one time,  affiliates  of Insignia
("Insignia  Affiliates") of interests in certain general partner entities,  past
tender offers by Insignia  Affiliates to acquire limited  partnership units, the
management of partnerships  by Insignia  Affiliates and the Insignia Merger (see
"Item 7. Financial  Statements,  Note B - Transfer of Control").  The plaintiffs
seek monetary damages and equitable relief,  including  judicial  dissolution of
the  Partnership.  On June 25, 1998, the General  Partner filed a motion seeking
dismissal of the action.  In lieu of  responding to the motion,  the  plaintiffs
have filed an amended  complaint.  The General  Partner  filed  demurrers to the
amended  complaint  which were heard February  1999.  Pending the ruling on such
demurrers,  settlement  negotiations commenced. On November 2, 1999, the parties
executed and filed a Stipulation  of  Settlement,  settling  claims,  subject to
final court approval,  on behalf of the Partnership and all limited partners who
own units as of November 3, 1999.  Preliminary  approval of the  settlement  was
obtained on November 3, 1999 from the Superior Court of the State of California,
County of San Mateo,  at which time the Court set a final  approval  hearing for
December  10, 1999.  Prior to the  December 10, 1999 hearing the Court  received
various  objections  to the  settlement,  including a  challenge  to the Court's
preliminary  approval  based  upon  the  alleged  lack  of  authority  of  class
plaintiffs'  counsel to enter the settlement.  On December 14, 1999, the General
Partner  and  its  affiliates   terminated  the  proposed  settlement.   Certain
plaintiffs have filed a motion to disqualify some of the plaintiffs'  counsel in
the action.  The General Partner does not anticipate that costs  associated with
this case will be material to the Partnership's overall operations.

The Partnership is unaware of any pending or outstanding  litigation that is not
of a routine nature arising in the ordinary course of business.

Item 4.     Submission of Matters to a Vote of Security Holders

The unit  holders  of the  Partnership  did not vote on any  matter  during  the
quarter ended December 31, 1999.


<PAGE>


                                     PART II

Item 5.     Market for Partnership Equity and Related Partner Matters

The  Partnership,  a  publicly-held  limited  partnership,  sold 158,945 Limited
Partnership  Units  aggregating  $79,473,000.  In addition,  the General Partner
contributed a total of $1,000 to the Partnership.  The Partnership currently has
5,259 holders of record owning an aggregate of 158,582 Units.  Affiliates of the
General Partner owned 72,484.5 Units or 45.708% at December 31, 1999.

The following table sets forth the distributions made by the Partnership for the
years ended  December 31, 1998 and 1999,  as well as for the  subsequent  period
from January 1, 2000 to March 3, 2000:

                                                Distributions
                                                            Per Limited
                                        Aggregate        Partnership Unit
                                      (in thousands)
       01/01/98 - 12/31/98             $    --                 $ --
       01/01/99 - 12/31/99               6,252 (1)             39.19
       01/01/00 - 03/03/00                 650 (2)              4.10

(1)   Consists of $928,000 of cash from operations and $1,826,000 of cash from a
      return of capital and  $3,498,000 of cash from sale proceeds from the sale
      of Professional Plaza (see "Item 6" for further details).

(2)   Distribution was made from cash from the financing  proceeds on West Chase
      Apartments (see "Item 6" for further details).

Future cash  distributions  will depend on the levels of net cash generated from
operations,   the  availability  of  cash  reserves,  and  the  timing  of  debt
maturities,  property sales and/or refinancings.  The Partnership's distribution
policy is reviewed on a semi-annual  basis.  There can be no assurance,  however
that the  Partnership  will  generate  sufficient  funds from  operations  after
required  capital  expenditures  to permit any additional  distributions  to its
partners in the year 2000 or subsequent periods.

Several tender offers were made by various parties,  including affiliates of the
General Partner,  during the fiscal years ended December 31, 1999 and 1998. As a
result of these tender offers,  AIMCO and its affiliates  currently own 72,484.5
units of limited  partnership units in the Partnership  representing  45.708% of
the outstanding units. It is possible that AIMCO or its affiliates will make one
or more additional offers to acquire additional limited partnership interests in
the Partnership  for cash or in exchange for units in the operating  partnership
of AIMCO.  Consequently,  AIMCO is in a position to significantly  influence all
voting  decisions  with  respect  to  the  Registrant.   Under  the  Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with respect to a variety of matters. When voting on matters, AIMCO would
in all  likelihood  vote the  Units it  acquired  in a manner  favorable  to the
interest of the General  Partner because of their  affiliation  with the General
Partner.


<PAGE>


Item 6.     Management's Discussion and Analysis or Plan of Operation

The  matters  discussed  in this Form  10-KSB  contain  certain  forward-looking
statements  and  involve  risks and  uncertainties  (including  changing  market
conditions, competitive and regulatory matters, etc.) detailed in the disclosure
contained  in this Form 10-KSB and the other  filings  with the  Securities  and
Exchange  Commission made by the Registrant from time to time. The discussion of
the Registrant's business and results of operations,  including  forward-looking
statements pertaining to such matters, does not take into account the effects of
any changes to the Registrant's business and results of operations. Accordingly,
actual   results   could  differ   materially   from  those   projected  in  the
forward-looking  statements as a result of a number of factors,  including those
identified herein.

This item should be read in conjunction with "Item 7. Financial  Statements" and
other items contained elsewhere in this report.

Results of Operations

The   Registrant's  net  income  for  the  year  ended  December  31,  1999  was
approximately  $2,563,000  as compared to  approximately  $760,000  for the year
ended December 31, 1998. (See "Note G" of the consolidated  financial statements
for a  reconciliation  of these  amounts  to the  Registrant's  Federal  taxable
income).  The  increase in net income is primarily  attributable  to the gain on
sale of discontinued operations of approximately $2,132,000 realized on the sale
of Professional Plaza.

Excluding  the impact of the sale and  operations  of  Professional  Plaza,  the
Registrant had net income of  approximately  $264,000 and $328,000 for the years
ending December 31, 1999 and 1998, respectively.  The decrease in net income was
due to  increased  total  expenses  partially  offset  by an  increase  in total
revenues.  Total  expenses  increased  primarily  due to  increased  general and
administrative  expenses,  operating expenses and depreciation expense.  General
and administrative expenses increased due to increased legal expenses due to the
settlement of a lawsuit as disclosed in the Partnership's  Annual Report on Form
10-KSB for the fiscal year ended  December  31,  1998,  increased  printing  and
mailing costs and to a special management fee paid to the General Partner during
the year ended  December  31, 1999 in  association  with the  distribution  from
operations made to the limited  partners during the current year.  There were no
such  distributions  made to the limited partners during the year ended 1998, so
no special management fees were paid during 1998. These increases were partially
offset  by  reduced   management   reimbursements.   Included   in  general  and
administrative  expenses  at both  December  31, 1999 and 1998,  are  management
reimbursements  to the General Partner allowed under the Partnership  Agreement.
Costs associated with the quarterly and annual communications with investors and
regulatory  agencies and the annual audit required by the Partnership  Agreement
are also included.  Operating expenses  increased  primarily due to increases in
utility expenses,  bonuses and supplies at all the Partnership's  properties, as
well as  increased  expenses  for  common  area  cleaning  primarily  at Ventura
Landing.  Depreciation expense increased due to capital  improvements  completed
during the past twelve months that are now being depreciated.

The  increase  in total  revenues  was  primarily  due to an  increase in rental
income.  Rental income increased primarily due to increased average rental rates
at Ventura  Landing and Village Green and improved  occupancy at West Chase.  In
addition,  concession  expense  and bad debt  expense  decreased  at West Chase.
Partially  offsetting these increases were decreased  occupancy at Village Green
and Ventura Landing and reduced average rental rates at West Chase.


<PAGE>


Income from discontinued  operations decreased approximately $265,000 due to the
sale  of  Professional  Plaza  on  July  8,  1999,  as  discussed  below.  Since
Professional Plaza was the last commercial property held by the Partnership, its
results of operations were shown as "Income from discontinued  operation" on the
accompanying  consolidated statements of operations.  The decrease in income was
due to the fact that there was only six months of activity for 1999 prior to the
sale of the property and that  additional  expenses were incurred in getting the
property ready for sale.

On July 8, 1999,  Professional Plaza,  located in Salt Lake City, Utah, was sold
to an  unaffiliated  third  party  for  $3,600,000.  After  payment  of  closing
expenses,  the net  proceeds  received  by the  Partnership  were  approximately
$3,397,000.  The sale of the property resulted in a gain on sale of discontinued
operations of  approximately  $2,132,000.  The proceeds were  distributed to the
partners during 1999.

Effective  January 1, 1999, the Partnership  changed its method of accounting to
capitalize the cost of exterior  painting and major landscaping on a prospective
basis.  The  Partnership  believes  that  this  accounting  principle  change is
preferable  because it provides a better  matching of expenses  with the related
benefit of the expenditures and it is consistent with industry  practice and the
policies  of the  General  Partner.  The  effect  of the  change  in 1999 was to
increase  net income by  approximately  $29,000  ($0.18 per limited  partnership
unit). The cumulative effect, had this change been applied to prior periods,  is
not material.  The accounting  principle  change will not have an effect on cash
flow,  funds  available for  distribution or fees payable to the General Partner
and affiliates.

As part of the ongoing  business plan of the  Partnership,  the General  Partner
monitors the rental market  environment of each of its investment  properties to
assess the feasibility of increasing rents,  maintaining or increasing occupancy
levels and protecting the Partnership from increases in expense. As part of this
plan, the General Partner attempts to protect the Partnership from the burden of
inflation-related  increases in expenses by increasing  rents and  maintaining a
high overall occupancy level. However, due to changing market conditions,  which
can  result in the use of rental  concessions  and rental  reductions  to offset
softening market conditions, there is no guarantee that the General Partner will
be able to sustain such a plan.

Liquidity and Capital Resources

As of December 31,  1999,  the  Partnership  held cash and cash  equivalents  of
approximately  $1,460,000  compared to approximately  $2,883,000 at December 31,
1998. The decrease in cash and cash equivalents of approximately $1,423,000 from
the  Partnership's  year  ended  December  31,  1998,  is due  to  approximately
$5,131,000   of  cash  used  in  financing   activities   partially   offset  by
approximately   $2,406,000  of  cash  provided  by  investing   activities   and
approximately $1,302,000 of cash provided by operating activities.  Cash used in
financing activities consisted of distributions to the partners partially offset
by  proceeds  from and loan costs paid for the  financing  of West  Chase.  Cash
provided  by  investing  activities  consisted  of  proceeds  from  the  sale of
Professional  Plaza partially  offset by property  improvements and replacements
and deposits to escrow  accounts.  The  Registrant  invests its working  capital
reserves in a money market account.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at the  properties  to  adequately  maintain the physical
assets and other  operating  needs of the Registrant and to comply with Federal,
state, and local legal and regulatory requirements. The Partnership is currently
evaluating  the capital  improvement  needs of the  properties  for the upcoming
year.  The  minimum  amount to be  budgeted  is  expected to be $300 per unit or
$140,400.  Additional  improvements  may be  considered  and will  depend on the
physical  condition  of the  properties  as well  as  replacement  reserves  and
anticipated cash flow generated by the properties. The capital expenditures will
be  incurred  only if cash is  available  from  operations  or from  Partnership
reserves.  To the extent that such budgeted capital  improvements are completed,
the Registrant's  distributable  cash flow, if any, may be adversely affected at
least in the short term.

The  Registrant's  current assets are thought to be sufficient for any near-term
needs  (exclusive  of capital  improvements)  of the  Registrant.  The  mortgage
indebtedness  at Ventura  Landing and Village  Green  Apartments  of  $4,200,000
requires interest only payments with the principal balance due in November 2003.
On December 1, 1999, the Partnership obtained financing on West Chase Apartments
in the amount of $1,150,000.  The loan carries a stated  interest rate of 7.87%.
Payments  are due on the first day of each  month  beginning  on January 1, 2000
until the loan matures on December 1, 2019.  Total  capitalized  loan costs were
approximately  $29,000 at December 31, 1999. The General Partner will attempt to
refinance such  indebtedness  and/or sell the properties  prior to such maturity
date. If the  properties  cannot be refinanced or sold for a sufficient  amount,
the Registrant will risk losing such properties through foreclosure.

During  the  year  ended   December  31,  1999,  the   Partnership   distributed
approximately  $6,252,000  (approximately  $6,215,000 to the limited partners or
$39.19  per  limited   partnership  unit),  of  which   approximately   $928,000
(approximately $891,000 to the limited partners or $5.62 per limited partnership
unit) was  attributable to cash flow from operations.  Approximately  $1,826,000
($11.51  per  limited  partnership  unit)  represented  a return of capital  and
approximately  $3,498,000 ($22.06 per limited partnership unit) represented sale
proceeds  from the sale of  Professional  Plaza both of which  were  distributed
entirely to the Limited  Partners.  No  distributions  were paid during the year
ended  December  31, 1998.  Subsequent  to the  Partnership's  fiscal year end a
distribution of approximately  $650,000 ($4.10 per limited partnership unit) was
made representing  financing  proceeds on West Chase Apartments all of which was
paid to the  Limited  Partners.  Future  cash  distributions  will depend on the
levels of net cash generated from operations, the availability of cash reserves,
and the timing of debt  maturities,  property  sales  and/or  refinancings.  The
Partnership's  distribution policy is reviewed on a semi-annual basis. There can
be no assurance,  however that the Partnership  will generate  sufficient  funds
from  operations  after required  capital  expenditures to permit any additional
distributions to its partners in the year 2000 or subsequent periods.

Several tender offers were made by various parties,  including affiliates of the
General Partner,  during the fiscal years ended December 31, 1999 and 1998. As a
result of these tender offers,  AIMCO and its affiliates  currently own 72,484.5
units of limited  partnership units in the Partnership  representing  45.708% of
the outstanding units. It is possible that AIMCO or its affiliates will make one
or more additional offers to acquire additional limited partnership interests in
the Partnership  for cash or in exchange for units in the operating  partnership
of AIMCO.  Consequently,  AIMCO is in a position to significantly  influence all
voting  decisions  with  respect  to  the  Registrant.   Under  the  Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with respect to a variety of matters. When voting on matters, AIMCO would
in all  likelihood  vote the  Units it  acquired  in a manner  favorable  to the
interest of the General  Partner because of their  affiliation  with the General
Partner.


<PAGE>


Year 2000 Compliance

General Description

The Year 2000 issue is the result of computer  programs  being written using two
digits rather than four digits to define the applicable year. The Partnership is
dependent  upon the  General  Partner  and its  affiliates  for  management  and
administrative services ("Managing Agent"). Any of the Managing Agent's computer
programs or hardware that had  date-sensitive  software or embedded  chips might
have  recognized  a date using "00" as the year 1900  rather than the year 2000.
This  could  have  resulted  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.

Computer Hardware, Software and Operating Equipment

In 1999,  the Managing  Agent  completed  all phases of its Year 2000 program by
completing  the  replacement  and repair of any  hardware or software  system or
operating  equipment that was not yet Year 2000 compliant.  The Managing Agent's
hardware  and software  systems and its  operating  equipment  are now Year 2000
compliant.  No  material  failure or  erroneous  results  have  occurred  in the
Managing Agent's computer  applications  related to the failure to reference the
Year 2000 to date.

Third Parties

To  date,  the  Managing  Agent  is not  aware of any  significant  supplier  or
subcontractor  (external agent) or financial institution of the Partnership that
has a Year 2000 issue that  would  have a material  impact on the  Partnership's
results of operations,  liquidity or capital  resources.  However,  the Managing
Agent  has no means of  ensuring  or  determining  the Year 2000  compliance  of
external  agents.  At this time, the Managing Agent does not believe that a Year
2000 issue of any  non-compliant  external agent will have a material  impact on
the Partnership's financial position or results of operations.

Costs

The total cost of the Managing Agent's Year 2000 project was approximately  $3.2
million and was funded from operating cash flows.

Risks Associated with the Year 2000

The Managing  Agent  completed all necessary  phases of its Year 2000 program in
1999,  and did not  experience  system or  equipment  malfunctions  related to a
failure to reference the Year 2000. The Managing  Agent or Partnership  have not
been  materially  adversely  effected by  disruptions  in the economy  generally
resulting from the Year 2000 issue.

At this  time,  the  Managing  Agent  does not  believe  that the  Partnership's
businesses,  results of  operations  or financial  condition  will be materially
adversely effected by the Year 2000 issue.

Contingency Plans Associated with the Year 2000

The  Managing  Agent has not had to implement  contingency  plans such as manual
workarounds or selecting new relationships for its banking or elevator operation
activities in order to avoid the Year 2000 issue.


<PAGE>


Item 7.     Financial Statements

CONSOLIDATED CAPTIAL PROPERTIES III

LIST OF FINANCIAL STATEMENTS

Report of Ernst & Young LLP, Independent Auditors

Consolidated Balance Sheet - December 31, 1999

Consolidated Statements of Operations - Years ended December 31, 1999 and 1998

Consolidated  Statements of Changes in Partners' (Deficit) Capital - Years ended
December 31, 1999 and 1998

Consolidated Statements of Cash Flows - Years ended December 31, 1999 and 1998

Notes to Consolidated Financial Statements


<PAGE>


              Report of Ernst & Young LLP, Independent Auditors



The Partners

Consolidated Capital Properties III

We have audited the  accompanying  consolidated  balance  sheet of  Consolidated
Capital  Properties  III as of December 31, 1999,  and the related  consolidated
statements of operations,  changes in partners' (deficit) capital and cash flows
for each of the two years in the period ended December 31, 1999. These financial
statements  are  the  responsibility  of  the  Partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made  by the  Partnership's  management,  as  well  as  evaluating  the  overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  consolidated  financial  position of  Consolidated
Capital Properties III at December 31, 1999, and the consolidated results of its
operations  and its cash  flows  for each of the two years in the  period  ended
December 31, 1999, in conformity with accounting  principles  generally accepted
in the United States.

As discussed in Note K to the consolidated financial statements, the Partnership
changed its method of accounting to capitalize the cost of exterior painting and
major landscaping effective January 1, 1999.

                                                          /s/ERNST & YOUNG LLP



Greenville, South Carolina
February 7, 2000


<PAGE>



                       CONSOLIDATED CAPITAL PROPERTIES III

                           CONSOLIDATED BALANCE SHEET

                       (in thousands, except unit data)

                                December 31, 1999
<TABLE>
<CAPTION>

Assets

<S>                                                                         <C>
   Cash and cash equivalents                                                $ 1,460
   Receivables and deposits                                                     182
   Restricted escrows                                                           133
   Other assets                                                                 216
   Investment properties (Notes F and H):
      Land                                                     $ 507
      Buildings and related personal property                  10,620
                                                               11,127

      Less accumulated depreciation                            (7,398)        3,729
                                                                            $ 5,720

Liabilities and Partners' (Deficit) Capital
Liabilities

   Accounts payable                                                          $ 304
   Tenant security deposit liabilities                                           97
   Other liabilities                                                            259
   Mortgage notes payable (Note F)                                            5,350

Partners' (Deficit) Capital

   General partner                                             $(1,828)
   Limited partners (158,582 units issued and
      outstanding)                                              1,538          (290)
                                                                            $ 5,720
</TABLE>

        See Accompanying Notes to Consolidated Financial Statements




<PAGE>


                       CONSOLIDATED CAPTIAL PROPERTIES III

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                       (in thousands, except unit data)

<TABLE>
<CAPTION>

                                                           Years Ended December 31,
                                                              1999         1998
Revenues:
<S>                                                          <C>          <C>
   Rental income                                             $ 2,865      $ 2,733
   Other income                                                  244          250
      Total revenues                                           3,109        2,983

Expenses:
   Operating expenses                                          1,497        1,460
   General and administrative                                    360          263
   Depreciation                                                  468          417
   Interest                                                      339          338
   Property taxes                                                181          177
      Total expenses                                           2,845        2,655

Income before discontinued operations                            264          328
Income from discontinued operations (Note C)                     167          432
Gain on sale of discontinued operations (Note C)               2,132           --

Net income                                                   $ 2,563       $ 760

Net income allocated to general partner (4%)                  $ 103        $  30
Net income allocated to limited partners (96%)                 2,460         730
                                                             $ 2,563       $ 760
Per limited partnership unit:

Income before discontinued operations                        $ 1.59       $ 1.99
Income from discontinued operations                             1.01         2.61
Gain on sale of discontinued operations                        12.91           --

Net income per limited partnership unit                      $ 15.51      $ 4.60

Distributions per limited partnership unit                   $ 39.19       $ --
</TABLE>

        See Accompanying Notes to Consolidated Financial Statements




<PAGE>


                       CONSOLIDATED CAPTIAL PROPERTIES III

       CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
                       (in thousands, except unit data)


<TABLE>
<CAPTION>

                                         Limited
                                       Partnership    General     Limited
                                          Units       Partner    Partners     Total

<S>                                      <C>            <C>       <C>        <C>
Original capital contributions           158,945        $ 1       $79,473    $79,474

Partners' (deficit) capital
   at December 31, 1997                  158,582      $(1,924)    $ 4,563    $ 2,639

Net income for the year ended
   December 31, 1998                          --           30         730        760

Partners' (deficit) capital at
   December 31, 1998                     158,582      $(1,894)    $ 5,293    $ 3,399

Distributions to partners                     --          (37)     (6,215)    (6,252)

Net income for the year
   ended December 31, 1999                    --          103       2,460      2,563

Partners' (deficit) capital
   at December 31, 1999                  158,582      $(1,828)    $ 1,538     $ (290)
</TABLE>

        See Accompanying Notes to Consolidated Financial Statements

<PAGE>


                       CONSOLIDATED CAPITAL PROPERTIES III

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                (in thousands)

<TABLE>
<CAPTION>

                                                              Years Ended December 31,
                                                                  1999        1998
Cash flows from operating activities:
<S>                                                             <C>           <C>
   Net income                                                   $ 2,563       $ 760
   Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depreciation                                                  492          465
      Amortization of lease commissions and loan costs               40           61
      Gain on sale of discontinued operations                    (2,132)          --
      Change in accounts:
        Receivables and deposits                                     34          (17)
        Other assets                                                 11          (34)
        Accounts payable                                            243          (78)
        Tenant security deposit liabilities                         (43)          19
        Other liabilities                                            94           21

            Net cash provided by operating activities             1,302        1,197

Cash flows from investing activities:

   Net proceeds from sale of discontinued operations              3,397           --
   Property improvements and replacements                          (936)        (380)
   Net (deposits to) receipts from restricted escrows               (55)          28

            Net cash provided by (used in) investing
               activities                                         2,406         (352)

Cash flows from financing activities:

   Payment of loan costs                                            (29)          --
   Net proceeds from refinancing of West Chase                    1,150           --
   Distributions to partners                                     (6,252)          --

            Net cash used in financing activities                (5,131)          --

Net (decrease) increase in cash and cash equivalents             (1,423)         845

Cash and cash equivalents at beginning of the year                2,883        2,038

Cash and cash equivalents at end of year                        $ 1,460      $ 2,883

Supplemental disclosure of cash flow information:

   Cash paid for interest                                        $ 308        $ 308

Supplemental disclosure of non-cash activity:
   Property improvements and replacements in accounts
    payable                                                      $ 167        $ --
</TABLE>

        See Accompanying Notes to Consolidated Financial Statements

<PAGE>


                       CONSOLIDATED CAPITAL PROPERTIES III

                   NOTES CONSOLIDATED TO FINANCIAL STATEMENTS

                                December 31, 1999

Note A - Organization and Significant Accounting Policies

Organization:   Consolidated   Capital  Properties  III,  a  California  limited
partnership (the  "Partnership" or "Registrant")  was formed on May 22, 1980, to
acquire and operate commercial and residential  properties.  The general partner
responsible  for management of the  Partnership's  business is ConCap  Equities,
Inc. (the "General  Partner" or "CEI").  The General  Partner is a subsidiary of
Apartment Investment and Management Company ("AIMCO") (see "Note B - Transfer of
Control").  The  directors  and  officers of the General  Partner  also serve as
executive  officers  of  AIMCO.  The  Partnership  Agreement  provides  that the
Partnership is to terminate on December 31, 2010 unless terminated prior to such
date. As of December 31, 1999, the Partnership owned two residential  properties
in Florida, and one residential property in Kentucky.

At the  time  of the  Partnership's  formation,  Consolidated  Capital  Equities
Corporation ("CCEC"), a Colorado corporation,  was the corporate general partner
and Consolidated  Capital  Management  Company  ("CCMC"),  a California  general
partnership, was the non-corporate general partner. In 1988, through a series of
transactions,  Southmark Corporation ("Southmark") acquired controlling interest
in CCEC. In December 1988, CCEC filed for reorganization under Chapter 11 of the
United  States  Bankruptcy  Code.  As part of CCEC's  reorganization  plan,  CEI
acquired  CCEC's general  partner  interests in the  Partnership and in 15 other
affiliated public limited  partnerships (the "Affiliated  Partnerships") and CEI
replaced CCEC as managing general partner in all 16 partnerships. As part of the
solicitation for approval of CEI as general  partner,  the limited partners also
approved the conversion of CCMC from the general  partner to a limited  partner,
thereby leaving CEI as the sole general partner of the Partnership.

Principles of Consolidation:  The Partnership's financial statements include the
accounts of ConCap Village Green  Associates,  Ltd. The  Partnership  owns a 99%
interest  in this  partnership,  and it has the  ability  to  control  the major
operating  and  financial   policies  of  this  partnership.   All  intercompany
transactions have been eliminated.

Uses of Estimates:  The  preparation of financial  statements in conformity with
generally accepted  accounting  principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Allocation of Profits, Gains, and Losses: The Partnership Agreement provides for
net income and net losses for both  financial and tax  reporting  purposes to be
allocated 96% to the Limited Partners and 4% to the general partners.

Upon  the  sale or  other  disposition,  or  refinancing,  of any  asset  of the
Partnership,  the  distributable  net proceeds  shall be distributed as follows:
First,  to the  partners  in  proportion  to their  interests  until the limited
partners have  received  proceeds  equal to their  original  capital  investment
applicable to the property;  Second,  to the limited  partners until the limited
partners  have  received  distributions  from all  sources  equal  to their  12%
cumulative return; Third,  concurrent with limited partner distributions,  4% to
the general partner  subordinated  and deferred until the limited  partners have
received 100% of their  capital  contributions;  Thereafter,  86% to the limited
partners in proportion to their interests and 14% to the general partner.

Investment   Properties:   Investment  properties  consist  of  three  apartment
complexes and are stated at cost.  Acquisition fees are capitalized as a cost of
real estate.  In accordance  with  Statement of Financial  Accounting  Standards
("SFAS") No. 121,  "Accounting  for the Impairment of Long-Lived  Assets and for
Long-Lived Assets to Be Disposed Of", the Partnership  records impairment losses
on long-lived assets used in operations when events and  circumstances  indicate
that the assets might be impaired and the  undiscounted  cash flows estimated to
be generated by those assets are less than the carrying amounts of those assets.
Costs of investment  properties  that have been  permanently  impaired have been
written down to appraised  value.  No  adjustments  for impairment of value were
recorded in the year ended December 31, 1999 or 1998.

Depreciation:  Depreciation  is  provided by the  straight-line  method over the
estimated lives of the apartment  properties and related personal property.  For
Federal income tax purposes,  the  accelerated  cost recovery method is used (1)
for real property over 15 years for additions  prior to March 16, 1984, 18 years
for  additions  after  March 15,  1984 and before May 9, 1985,  and 19 years for
additions  after May 8, 1985,  and before  January 1, 1987, and (2) for personal
property over 5 years for additions prior to January 1, 1987. As a result of the
Tax Reform Act of 1986,  for  additions  after  December 31, 1986,  the modified
accelerated  cost recovery method is used for  depreciation of (1) real property
over 27 1/2 years and (2) personal property additions over 5 years.

Effective  January 1, 1999, the Partnership  changed its method of accounting to
capitalize the costs of exterior painting and major landscaping (Note K).

Cash and Cash  Equivalents:  Includes cash on hand and in banks and money market
accounts.  At certain  times,  the amount of cash deposited at a bank may exceed
the limit on insured deposits.

Cash  balances  include  approximately  $66,000 at  December  31,  1999 that are
maintained by the affiliated management company on behalf of affiliated entities
in a cash concentration account.

Restricted Escrows:

     Capital  Improvement  Reserve:  As a result of the  refinancing  of Ventura
     Landing  Apartments  and Village Green  Apartments in 1996,  the properties
     deposited  approximately  $216,000 with the mortgage company to establish a
     capital reserve  designated for certain capital  improvements.  At December
     31, 1999, this reserve totaled approximately $14,000.

     Replacement Reserve: As a result of the 1996 refinancing of Ventura Landing
     Apartments and Village Green  Apartments and the December 1999 financing of
     West Chase  Apartments,  each property makes monthly  deposits to establish
     and maintain a replacement  reserve designated for repairs and replacements
     at the properties. At December 31, 1999, this reserve totaled approximately
     $119,000.

Fair Value of Financial Instruments: SFAS No. 107, "Disclosures about Fair Value
of  Financial  Instruments",  as amended  by SFAS No.  119,  "Disclosures  about
Derivative  Financial  Instruments  and Fair  Value of  Financial  Instruments",
requires  disclosure  of fair value  information  about  financial  instruments,
whether or not recognized in the balance  sheet,  for which it is practicable to
estimate  fair  value.  Fair value is defined in the SFAS as the amount at which
the  instruments  could be exchanged in a current  transaction  between  willing
parties,  other than in a forced or liquidation  sale. The Partnership  believes
that the  carrying  amount of its  financial  instruments  (except for long term
debt)  approximates  their fair value due to the short  term  maturity  of these
instruments.  The  fair  value  of  the  Partnership's  long  term  debt,  after
discounting the scheduled loan payments to maturity,  approximates  its carrying
balance.

Loan Costs: Loan costs of approximately $243,000, less accumulated  amortization
of approximately  $97,000,  are included in other assets and are being amortized
on a straight-line basis over the life of the loans.

Tenant  Security  Deposits:  The  Partnership  requires  security  deposits from
lessees  for the  duration  of the  lease  and such  deposits  are  included  in
receivables  and  deposits.  Deposits  are  refunded  when the  tenant  vacates,
provided  the  tenant  has not  damaged  its space and is  current on its rental
payments.

Leases: The Partnership  generally leases apartment units for twelve-month terms
or less. The Partnership recognizes income as earned on its leases. In addition,
the General Partner's policy is to offer rental concessions during  particularly
slow months or in response to heavy  competition from other similar complexes in
the area. Concessions are charged against rental income as incurred.

Segment Reporting: Statement of Financial Standards ("SFAS") No. 131, Disclosure
about  Segments of an  Enterprise  and  Related  Information  ("Statement  131")
established  standards  for the way  that  public  business  enterprises  report
information about operating segments in annual financial statements and requires
that those enterprises  report selected  information about operating segments in
interim financial reports. It also establishes standards for related disclosures
about products and services, geographic areas, and major customers. See "Note I"
for required disclosure.

Advertising:  The  Partnership  expenses the costs of  advertising  as incurred.
Advertising  costs of  approximately  $57,000  and  $53,000  for the years ended
December 31, 1999 and 1998,  respectively  were charged to operating  expense as
incurred.

Reclassification:   Certain  reclassifications  have  been  made  to  the  1998
information to conform to the 1999 presentation.

Note B - Transfer of Control

Pursuant  to a series  of  transactions  which  closed  on  October  1, 1998 and
February 26, 1999,  Insignia Financial Group, Inc. and Insignia Properties Trust
merged into AIMCO, a publicly traded real estate  investment  trust,  with AIMCO
being the surviving  corporation  (the "Insignia  Merger").  As a result,  AIMCO
acquired 100% ownership  interest in the General  Partner.  The General  Partner
does not believe that this transaction has had or will have a material effect on
the affairs and operations of the Partnership.

Note C - Discontinued Segment

On July 8, 1999,  Professional Plaza,  located in Salt Lake City, Utah, was sold
to an  unaffiliated  third  party  for  $3,600,000.  After  payment  of  closing
expenses,  the net  proceeds  received  by the  Partnership  were  approximately
$3,397,000.  The sale of the property resulted in a gain on sale of discontinued
operations of approximately $2,132,000.

Professional Plaza was the only commercial property owned by the Partnership and
represented one segment of the Partnership's operations. Due to the sale of this
property,  the results of the commercial  segment have been shown as income from
discontinued operations and gain on sale of discontinued operations. Revenues of
this  property  were  approximately  $412,000  and  $940,000  for 1999 and 1998,
respectively.  Income from discontinued  operations were approximately  $167,000
and $432,000 for 1999 and 1998, respectively.


<PAGE>


Note D - Transactions with Affiliated Parties

The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all Partnership  activities.
The  Limited  Partnership  Agreement  ("Partnership   Agreement")  provides  for
payments to affiliates of the General Partner for property  management  services
based on a percentage of revenue;  for a partnership  management fee equal to 9%
of the  total  distributions  made to  limited  partners  from  cash  flow  from
operations; and for reimbursements of certain expenses incurred by affiliates of
the General Partner on behalf of the Partnership.

The following  amounts were paid or accrued to the General Partner or affiliates
during each of the years ended December 31, 1999 and 1998, respectively:

                                                                   1999     1998
                                                                  (in thousands)
Property management fees (included in operating expenses
  and income from discounted operations)                          $ 153    $ 180
Reimbursement for services of affiliates (included in
  investment properties and general and administrative
  expenses)                                                         129      147
Partnership management fees (included in general and
  administrative expenses)                                           88       --
Real estate brokerage commission (included in gain on sale
  of discontinued operations)                                       108       --
Loan costs (included in other assets)                                12       --

During the years ended  December  31, 1999 and 1998,  affiliates  of the General
Partner were entitled to receive 5% of gross  receipts from all of  Registrant's
residential   properties  as  compensation  for  providing  property  management
services.  The Registrant  paid to such  affiliates  approximately  $153,000 and
$146,000 for the years ended  December 31, 1999 and 1998,  respectively.  During
the nine months ended September 30, 1998, affiliates of the General Partner were
entitled  to  varying  percentages  of  gross  receipts  from  the  Registrant's
commercial property as compensation for providing property management  services.
These  services were  performed by affiliates of the General  Partner during the
nine months ended September 30, 1998 and were approximately  $34,000.  Effective
October 1, 1998 (the  effective  date of the  Insignia  Merger  (See "Note B")),
these services for the commercial property were provided by an unrelated party.

An  affiliate  of the General  Partner  received  reimbursement  of  accountable
administrative expenses amounting to approximately $129,000 and $147,000 for the
years ended December 31, 1999 and 1998, respectively.

The Limited  Partnership  Agreement  ("Partnership  Agreement")  provides  for a
special  management  fee  equal  to 9% of the  total  distributions  made to the
limited  partners  from  cash  flow from  operations  to be paid to the  General
Partner  for  executive  and  administrative  management  services.  Under  this
provision of the Partnership  Agreement, a fee of approximately $88,000 was paid
to the General  Partner  during the year ended  December  31,  1999.  No similar
management fee was paid to the General Partner during the  corresponding  period
in 1998.

Pursuant  to the  Partnership  Agreement,  the  General  Partner is  entitled to
receive a  commission  equal to 3% of the  aggregate  disposition  price of sold
properties. The Partnership paid a commission of $108,000 to the General Partner
related to the sale of Professional Plaza in 1999. This amount is subordinate to
the limited  partners  receiving  their original  capital  contributions  plus a
cumulative   preferred  return  of  6%  per  annum  of  their  adjusted  capital
investment,  as defined in the Partnership  Agreement.  If the limited  partners
have not received  these returns when the  Partnership  terminates,  the General
Partner will return this amount to the Partnership.

In connection with the financing of West Chase  Apartments in December 1999, the
Partnership paid a brokerage fee of approximately  $12,000 to an affiliate.  The
brokerage  fee is  included  in  "Other  Assets"  and is  being  amortized  on a
straight-line basis over the life of the loan.

Additionally,  the Partnership paid approximately $18,000 during the nine months
ended  September  30, 1998,  to an  affiliate  of the General  Partner for lease
commissions at the Partnership's  commercial  property.  These lease commissions
were  included  in  other  assets  and  were  amortized  over  the  terms of the
respective leases.  Effective October 1, 1998, lease commissions were paid to an
unrelated party.

Several tender offers were made by various parties,  including affiliates of the
General Partner,  during the fiscal years ended December 31, 1999 and 1998. As a
result of these tender offers,  AIMCO and its affiliates  currently own 72,484.5
units of limited  partnership units in the Partnership  representing  45.708% of
the outstanding units. It is possible that AIMCO or its affiliates will make one
or more additional offers to acquire additional limited partnership interests in
the Partnership  for cash or in exchange for units in the operating  partnership
of AIMCO.  Consequently,  AIMCO is in a position to significantly  influence all
voting  decisions  with  respect  to  the  Registrant.   Under  the  Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with respect to a variety of matters. When voting on matters, AIMCO would
in all  likelihood  vote the  Units it  acquired  in a manner  favorable  to the
interest of the General  Partner because of their  affiliation  with the General
Partner.

Note E - Distributions

During  the  year  ended   December  31,  1999,  the   Partnership   distributed
approximately  $6,252,000  (approximately  $6,215,000 to the limited partners or
$39.19  per  limited   partnership  unit),  of  which   approximately   $928,000
(approximately $891,000 to the limited partners or $5.62 per limited partnership
unit) was  attributable to cash flow from operations.  Approximately  $1,826,000
($11.51  per  limited  partnership  unit)  represented  a return of capital  and
approximately  $3,498,000 ($22.06 per limited partnership unit) represented sale
proceeds  from the sale of  Professional  Plaza both of which  were  distributed
entirely to the Limited  Partners.  No  distributions  were paid during the year
ended  December 31, 1998.  Subsequent  to the  Partnership's  fiscal year end, a
distribution of approximately  $650,000 ($4.10 per limited partnership unit) was
paid to the limited partners from financing proceeds on West Chase Apartments.


<PAGE>


Note F - Mortgage Notes Payable

The principle terms of mortgage notes payable are as follows:
<TABLE>
<CAPTION>

                            Principal    Monthly                          Principal
                           Balance At    Payment     Stated                Balance
                           December 31  Including   Interest  Maturity      Due At
         Property              1999      Interest     Rate      Date       Maturity
                                (in thousands)                          (in thousands)

<S>                           <C>          <C>       <C>        <C>         <C>
Ventura Landing Apartments    $2,200       $  13     7.33%      11/03       $2,200

Village Green Apartments       2,000          12     7.33%      11/03        2,000

West Chase Apartments          1,150          10     7.87%      12/19           --

      Total                   $5,350       $  35                             $4,200
</TABLE>

On December 1, 1999, the Partnership obtained financing on West Chase Apartments
in the amount of  $1,150,000.  The loan carries a stated  interest rate of 7.87%
and matures on December 1, 2019. The Partnership  received net proceeds from the
financing  in the amount of  approximately  $1,124,000.  The  Partnership  spent
approximately  $29,000 on loan costs  during the year ended  December  31, 1999.
These loan costs are included in other assets on the consolidated balance sheet.

The  mortgage  notes  payable are  nonrecourse  and are secured by pledge of the
Partnership's  properties and by pledge of revenues from the  respective  rental
properties.  Also,  the loans  require  prepayment  penalties if repaid prior to
maturity and prohibit resale of the properties subject to existing indebtedness.

Scheduled  principal  payments  of the  mortgage  notes  payable  subsequent  to
December 31, 1999 are as follows (in thousands):

                               2000             $  23
                               2001                27
                               2002                29
                               2003             4,231
                               2004                34
                            Thereafter          1,006

                                               $5,350

Note G - Income Taxes

The Partnership has received a ruling from the Internal  Revenue Service that it
will  be  classified  as  a  partnership   for  Federal   income  tax  purposes.
Accordingly, no provision for income taxes is made in the consolidated financial
statements of the  Partnership.  Taxable  income or loss of the  Partnership  is
reported in the income tax returns of its partners.

The  following is a  reconciliation  of reported net income and Federal  taxable
income (in thousands, except per unit data):

                                          1999          1998

Net income as reported                   $2,563        $ 760
Add (deduct):
     Deferred revenue and other
       liabilities                           17             1
     Depreciation differences                21            52
     Accrued expenses                        20            22
     Gain on sale of discontinued
       operations                          (355)           --
     Other                                  (17)           (1)
Federal taxable income                   $2,249        $ 834
Federal taxable income per
     limited partnership unit            $13.61        $ 5.05


The following is a reconciliation between the Partnership's reported amounts and
Federal  tax  basis  of net  (liabilities)  assets  at  December  31,  1999  (in
thousands):

Net liabilities as reported                            $ (290)

Differences in basis of assets and liabilities
   Investment properties at cost                        3,414
   Accumulated depreciation                              (210)
   Other assets and liabilities                           341
   Syndication costs                                    8,691

Net assets - tax basis                                $11,946

<PAGE>


Note H - Real Estate and Accumulated Depreciation
<TABLE>
<CAPTION>

                                             Initial Cost
                                            To Partnership
                                            (in thousands)
                                                                          Cost
                                                     Buildings        Capitalized
                                                    and Related        (Removed)
                                                      Personal       Subsequent to
    Description        Encumbrances       Land        Property        Acquisition
                      (in thousands)                                 (in thousands)

<S>                      <C>             <C>          <C>               <C>
Ventura Landing          $ 2,200         $ 282        $ 3,754           $ 1,470
Village Green              2,000            125         2,375               637
West Chase                 1,150            100         1,702               682

       Totals            $ 5,350         $ 507        $ 7,831           $ 2,789
</TABLE>


<TABLE>
<CAPTION>

                    Gross Amount At Which Carried
                         At December 31, 1999
                            (in thousands)
                              Buildings
                             And Related
                              Personal                Accumulated      Date    Depreciable
   Description       Land     Property      Total    Depreciation    Acquired   Life-Years
                                                    (in thousands)

<S>                 <C>        <C>         <C>          <C>          <C>   <C>     <C>
Ventura Landing     $ 282      $ 5,223     $ 5,505      $ 4,506      10/07/81      5-19
Village Green          125       3,012       3,137        1,502      12/20/91      3-15
West Chase             100       2,385       2,485        1,390      09/17/90      5-15

      Totals        $ 507      $10,620     $11,127      $ 7,398
</TABLE>

<PAGE>

Reconciliation of "Real Estate and Accumulated Depreciation":

                                                Years Ended December 31,
                                                  1999            1998
                                                     (in thousands)
Real Estate
Balance at beginning of year                    $14,589          $14,209
    Property improvements                           936              380
    Sale of discontinued operations              (4,398)              --
Balance at end of year                          $11,127          $14,589

Accumulated Depreciation
Balance at beginning of year                    $10,089          $ 9,624
    Additions charged to expense                    468              465
    Sale of discontinued operations              (3,159)              --
Balance at end of year                          $ 7,398          $10,089


The  aggregate  cost of the real  estate  for  Federal  income tax  purposes  at
December  31,  1999 and 1998,  is  approximately  $14,502,000  and  $18,481,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at December 31, 1999 and 1998,  is  approximately  $7,608,000  and  $10,166,000,
respectively.

Note I - Segment Reporting

Description  of the types of products  and  services  from which the  reportable
segment derives its revenues:

The  Partnership  had  two  reportable  segments:   residential  properties  and
commercial properties.  The Partnership's  residential property segment consists
of three apartment complexes, one each in Orlando,  Florida;  Altamonte Springs,
Florida;  and Lexington,  Kentucky.  The  Partnership  rents  apartment units to
tenants for terms that are typically twelve months or less. On July 8, 1999, the
commercial  property was sold to an unrelated party.  Therefore,  the commercial
segment is  reflected  as  discontinued  operations  (see  "Note C" for  further
discussion regarding the sale).

Measurement of segment profit or loss:

The  Partnership  evaluates  performance  based on segment  profit (loss) before
depreciation.  The accounting policies of the reportable segment are the same as
those described in the summary of significant accounting policies.

Factors management used to identify the enterprise's reportable segment:

The  Partnership's  reportable  segments are  investment  properties  that offer
different  products  and  services.  The  reportable  segments  are each managed
separately  because they  provide  distinct  services  with  different  types of
products and customers.

Segment information for the years 1999 and 1998 is shown in the tables below (in
thousands). The "Other" Column includes Partnership administration related items
and income and expense not allocated to the reportable segment.
<TABLE>
<CAPTION>

1999                                Residential     Commercial      Other     Totals
                                                  (discontinued)
<S>                                    <C>             <C>            <C>     <C>
Rental income                          $2,865          $  --          $ --    $2,865
Other income                              184             --            60       244
Interest expense                          339             --            --       339
Depreciation                              468             --            --       468
General and administrative
  expenses                                 --             --           360       360
Income from discontinued
  operations                               --            167            --       167
Gain on sale of discontinued
  operations                               --          2,132            --     2,132
Segment profit (loss)                     564          2,299          (300)    2,563
Total assets                            4,475             21         1,224     5,720
Capital expenditures for
  investment properties                   894             42            --       936
</TABLE>


<TABLE>
<CAPTION>

1998                                Residential     Commercial      Other     Totals
                                                  (discontinued)
<S>                                    <C>             <C>            <C>     <C>
Rental income                          $2,733          $  --          $ --    $2,733
Other income                              158             --            92       250
Interest expense                          338             --            --       338
Depreciation                              417             --            --       417
General and administrative
  expense                                  --             --           263       263
Income from discontinued
  operations                               --            432            --       432
Segment profit (loss)                     499            432          (171)      760
Total assets                            3,978          1,484         2,503     7,965
Capital expenditures for
  investment properties                   323             57            --       380
</TABLE>


Note J - Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial  Group,  Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs  named as defendants,  among others,
the   Partnership,   the  General  Partner  and  several  of  their   affiliated
partnerships  and corporate  entities.  The action  purports to assert claims on
behalf of a class of limited  partners and derivatively on behalf of a number of
limited  partnerships  (including  the  Partnership)  which are named as nominal
defendants,  challenging  the  acquisition  by Insignia  Financial  Group,  Inc.
("Insignia")  and  entities  which  were,  at one time,  affiliates  of Insignia
("Insignia  Affiliates") of interests in certain general partner entities,  past
tender offers by Insignia  Affiliates to acquire limited  partnership units, the
management of partnerships  by Insignia  Affiliates and the Insignia Merger (see
"Item 7. Financial  Statements,  Note B - Transfer of Control").  The plaintiffs
seek monetary damages and equitable relief,  including  judicial  dissolution of
the  Partnership.  On June 25, 1998, the General  Partner filed a motion seeking
dismissal of the action.  In lieu of  responding to the motion,  the  plaintiffs
have filed an amended  complaint.  The General  Partner  filed  demurrers to the
amended  complaint  which were heard February  1999.  Pending the ruling on such
demurrers,  settlement  negotiations commenced. On November 2, 1999, the parties
executed and filed a Stipulation  of  Settlement,  settling  claims,  subject to
final court approval,  on behalf of the Partnership and all limited partners who
own units as of November 3, 1999.  Preliminary  approval of the  settlement  was
obtained on November 3, 1999 from the Superior Court of the State of California,
County of San Mateo,  at which time the Court set a final  approval  hearing for
December  10, 1999.  Prior to the  December 10, 1999 hearing the Court  received
various  objections  to the  settlement,  including a  challenge  to the Court's
preliminary  approval  based  upon  the  alleged  lack  of  authority  of  class
plaintiffs'  counsel to enter the settlement.  On December 14, 1999, the General
Partner  and  its  affiliates   terminated  the  proposed  settlement.   Certain
plaintiffs have filed a motion to disqualify some of the plaintiffs'  counsel in
the action.  The General Partner does not anticipate that costs  associated with
this case will be material to the Partnership's overall operations.

The  Partnership is unaware of any other pending or outstanding  litigation that
is not of a routine nature arising in the ordinary course of business.

Note K - Change in Accounting Principle

Effective  January 1, 1999, the Partnership  changed its method of accounting to
capitalize the cost of exterior  painting and major landscaping on a prospective
basis.  The  Partnership  believes  that  this  accounting  principle  change is
preferable  because it provides a better  matching of expenses  with the related
benefit of the expenditures and it is consistent with industry  practice and the
policies  of the  General  Partner.  The  effect  of the  change  in 1999 was to
increase  net income by  approximately  $29,000  ($0.18 per limited  partnership
unit). The cumulative effect, had this change been applied to prior periods,  is
not material.  The accounting  principle  change will not have an effect on cash
flow,  funds  available for  distribution or fees payable to the General Partner
and affiliates.

Item 8.     Changes in and  Disagreements  with  Accountants on Accounting and
            Financial Disclosure

            None.


<PAGE>


                                    PART III

Item 9.     Directors,  Executive  Officers,  Promoters  and Control  Persons;
            Compliance with Section 16(a) of the Exchange Act

The  Registrant  has  no  officers  or  director.  The  General  Partner  of the
Registrant  is  ConCap  Equities,  Inc.  The  names  and ages of, as well as the
positions  and offices  held by, the  executive  officers  and  directors of the
General Partner are set forth below. There are no family  relationships  between
or among any officers or directors.

Name                        Age    Position

Patrick J. Foye              42    Executive Vice President and Director

Martha L. Long               40    Senior Vice President and Controller

Patrick J. Foye has been  Executive Vice President and Director of the General
Partner  since  October  1,  1998.  Mr.  Foye has  served  as  Executive  Vice
President  of AIMCO  since May 1998.  Prior to joining  AIMCO,  Mr. Foye was a
partner in the law firm of Skadden,  Arps, Slate, Meagher & Flom LLP from 1989
to 1998 and was Managing Partner of the firm's  Brussels,  Budapest and Moscow
offices from 1992 through 1994.  Mr. Foye is also Deputy  Chairman of the Long
Island  Power  Authority  and  serves  as a  member  of  the  New  York  State
Privatization  Council.  He received a B.A.  from  Fordham  College and a J.D.
from Fordham University Law School.

Martha L. Long has been  Senior Vice  President  and  Controller  of the General
Partner and AIMCO since October 1998, as a result of the acquisition of Insignia
Financial Group,  Inc. From June 1994 until January 1997, she was the Controller
for Insignia, and was promoted to Senior Vice President - Finance and Controller
in January 1997,  retaining  that title until  October  1998.  From 1988 to June
1994,  Ms. Long was Senior Vice  President and  Controller for The First Savings
Bank, FSB in Greenville, South Carolina.

Based solely upon a review of Forms 3 and 4 and amendments  thereto furnished to
the Registrant  under Rule 16a-3(e) during the  Registrant's  most recent fiscal
year and Form 5 and amendments  thereto furnished to the Registrant with respect
to its most recent  fiscal year,  the  Registrant  is not aware of any director,
officer,  beneficial  owner of more than ten  percent  of the  units of  limited
partnership interest in the Registrant that failed to file on a timely basis, as
disclosed in the above Forms,  reports required by Section 16(a) of the Exchange
Act during the most recent  fiscal year or prior fiscal years except as follows:
AIMCO and its joint  filers  failed to timely file a Form 4 with  respect to its
acquisition of Units.

Item 10.    Executive Compensation

None  of  the  directors  and  officers  of the  General  Partner  received  any
remuneration from the Registrant.


<PAGE>


Item 11.    Security Ownership of Certain Beneficial Owners and Management

Except as noted below, no person or entity was known by the Registrant to be the
beneficial  owner  of  more  than 5% of the  Limited  Partnership  Units  of the
Registrant as of December 31, 1999.

              Entity                      Number of Units             Percentage

Cooper River Properties, LLC
  (an affiliate of AIMCO)                    17,056.00                  10.76%
Insignia Properties LP
  (an affiliate of AIMCO)                    39,831.50                  25.12%
AIMCO Properties LP
  (an affiliate of AIMCO)                    15,597.00                   9.83%

Cooper River Properties LLC and Insignia Properties LP are indirectly ultimately
owned by AIMCO.  Their business address is 55 Beattie Place,  Greenville,  South
Carolina 29602.  AIMCO Properties is indirectly  ultimately  controlled by AIMCO
and its business  address is 2000 South  Colorado  Boulevard,  Denver,  Colorado
80222.

No director or officer of the General Partner owns any Units.

Item 12.    Certain Relationships and Related Transactions

The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all Partnership  activities.
The  Limited  Partnership  Agreement  ("Partnership   Agreement")  provides  for
payments to affiliates of the General Partner for property  management  services
based on a percentage of revenue;  for a partnership  management fee equal to 9%
of the  total  distributions  made to  limited  partners  from  cash  flow  from
operations; and for reimbursements of certain expenses incurred by affiliates of
the General Partner on behalf of the Partnership.

The following  amounts were paid or accrued to the General Partner or affiliates
during each of the years ended December 31, 1999 and 1998, respectively:

                                                                   1999     1998
                                                                  (in thousands)

 Property management fees                                         $ 153    $ 180
 Reimbursement for services of affiliates                           129      147
 Partnership management fees                                         88       --
 Real estate brokerage commission                                   108       --
 Loan costs                                                          12       --

During the years ended  December  31, 1999 and 1998,  affiliates  of the General
Partner were entitled to receive 5% of gross  receipts from all of  Registrant's
residential   properties  as  compensation  for  providing  property  management
services.  The Registrant  paid to such  affiliates  approximately  $153,000 and
$146,000 for the years ended  December 31, 1999 and 1998,  respectively.  During
the nine months ended September 30, 1998, affiliates of the General Partner were
entitled  to  varying  percentages  of  gross  receipts  from  the  Registrant's
commercial property as compensation for providing property management  services.
These  services were  performed by affiliates of the General  Partner during the
nine months ended September 30, 1998 and were approximately  $34,000.  Effective
October 1, 1998 (the effective date of the Insignia Merger, see "Note B"), these
services for the commercial property were provided by an unrelated party.

An  affiliate  of the General  Partner  received  reimbursement  of  accountable
administrative expenses amounting to approximately $129,000 and $147,000 for the
year ended December 31, 1999 and 1998, respectively.

The Limited  Partnership  Agreement  ("Partnership  Agreement")  provides  for a
special  management  fee  equal  to 9% of the  total  distributions  made to the
limited  partners  from  cash  flow from  operations  to be paid to the  General
Partner  for  executive  and  administrative  management  services.  Under  this
provision of the Partnership  Agreement, a fee of approximately $88,000 was paid
to the General  Partner  during the year ended  December  31,  1999.  No similar
management fee was paid to the General Partner during the  corresponding  period
in 1998.

Pursuant  to the  Partnership  Agreement,  the  General  Partner is  entitled to
receive a  commission  equal to 3% of the  aggregate  disposition  price of sold
properties. The Partnership paid a commission of $108,000 to the General Partner
related to the sale of Professional Plaza in 1999. This amount is subordinate to
the limited  partners  receiving  their original  capital  contributions  plus a
cumulative   preferred  return  of  6%  per  annum  of  their  adjusted  capital
investment,  as defined in the Partnership  Agreement.  If the limited  partners
have not received  these returns when the  Partnership  terminates,  the General
Partner will return this amount to the Partnership.

In connection with the financing of West Chase  Apartments in December 1999, the
Partnership paid a brokerage fee of approximately  $12,000 to an affiliate.  The
brokerage  fee is  included  in  "Other  Assets"  and is  being  amortized  on a
straight-line basis over the life of the loan.

Additionally,  the Partnership paid approximately $18,000 during the nine months
ended  September  30, 1998,  to an  affiliate  of the General  Partner for lease
commissions at the Partnership's  commercial  property.  These lease commissions
were  included  in  other  assets  and  were  amortized  over  the  terms of the
respective leases.  Effective October 1, 1998, lease commissions were paid to an
unrelated party.

Several tender offers were made by various parties,  including affiliates of the
General Partner,  during the fiscal years ended December 31, 1999 and 1998. As a
result of these tender offers,  AIMCO and its affiliates  currently own 72,484.5
units of limited  partnership units in the Partnership  representing  45.708% of
the outstanding units. It is possible that AIMCO or its affiliates will make one
or more additional offers to acquire additional limited partnership interests in
the Partnership  for cash or in exchange for units in the operating  partnership
of AIMCO.  Consequently,  AIMCO is in a position to significantly  influence all
voting  decisions  with  respect  to  the  Registrant.   Under  the  Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with respect to a variety of matters. When voting on matters, AIMCO would
in all  likelihood  vote the  Units it  acquired  in a manner  favorable  to the
interest of the General  Partner because of their  affiliation  with the General
Partner.


<PAGE>


Item 13.    Exhibits and Reports on Form 8-K

      (a)   Exhibits:

            Exhibit 18, Independent Accountants' Preferability Letter for Change
            in Accounting Principle, is filed as an exhibit to this report.

            Exhibit 27, Financial Data Schedule,  is filed as an exhibit to this
            report.

      (b)   Reports on Form 8-K:

            No reports on Form 8-K were filed during the fourth quarter of 1999.


<PAGE>


                                   SIGNATURES

In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                    CONSOLIDATED CAPITAL PROPERTIES III

                                    By:   CONCAP EQUITIES, INC.
                                          Its General Partner

                                    By:   /s/Patrick J. Foye
                                          Patrick J. Foye
                                          Executive Vice President

                                    By:   /s/Martha L. Long
                                          Martha L. Long
                                          Senior Vice President
                                          and Controller

                                    Date:

In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  Registrant and in the capacities and on the
date indicated.

/s/Patrick J. Foye            Executive Vice President            Date:
Patrick J. Foye               and Director

/s/Martha L. Long             Senior Vice President               Date:
Martha L. Long                and Controller

<PAGE>


                                  EXHIBIT INDEX

Exhibit Number

      2.1         Agreement  and Plan of Merger,  dated as of October 1, 1998 by
                  and  between  AIMCO  and IPT;  incorporated  by  reference  to
                  Exhibit 2.1 filed with Registrant's Current Report on Form 8-K
                  dated October 1, 1998.

      3           Certificate  of  Limited  Partnership,  as  amended  to  date.
                  (Incorporated  by reference to the Annual  Report on Form 10-K
                  for the year ended December 31, 1991).

      10.1        Property  Management  Agreement  No. 104 dated  October  23,
                  1990, by and between the Partnership and CCEC  (Incorporated
                  by  reference to the  Quarterly  Report on Form 10-Q for the
                  quarter ended September 30, 1990).

      10.2        Property  Management  Agreement  No. 204 dated  October  23,
                  1990, by and between the Partnership and CCEC  (Incorporated
                  by  reference to the  Quarterly  Report on Form 10-Q for the
                  quarter ended September 30, 1990).

      10.3        Property  Management  Agreement  No. 305 dated  October  23,
                  1990, by and between the Partnership and CCEC  (Incorporated
                  by  reference to the  Quarterly  Report on Form 10-Q for the
                  quarter ended September 30, 1990).

      10.4        Property  Management  Agreement  No., 402 dated  October 23,
                  1990, by and between the Partnership and CCEC  (Incorporated
                  by  reference to the  Quarterly  Report on Form 10-Q for the
                  quarter ended September 30, 1990).

      10.5        Bill of Sale and  Assignment  dated  October 23, 1990,  by and
                  between  CCEC and ConCap  Services  Company  (Incorporated  by
                  reference to the Quarterly Report on Form 10-Q for the quarter
                  ended September 30, 1990).

      10.6        Assignment and Assumption Agreement dated October 23, 1990, by
                  and between  CCEC and ConCap  Management  Limited  Partnership
                  ("CCMLP")  (Incorporated  by reference to the Quarterly Report
                  on Form 10-Q for the quarter ended September 30, 1990).

      10.7        Assignment  and  Agreement as to Certain  Property  Management
                  Services  dated  October 23,  1990,  by and between  CCMLP and
                  ConCap  Capital  Company  (Incorporated  by  reference  to the
                  Quarterly  Report on Form 10-Q for the quarter ended September
                  30, 1990).

      10.8        Assignment and Assumption Agreement dated October 23, 1990, by
                  and between CCMLP and The Hayman Group (100 Series of Property
                  Management  Contracts),  (Incorporated  by  reference  to  the
                  Quarterly  Report on Form 10-Q for the quarter ended September
                  30, 1990).

      10.9        Assignment and Assumption Agreement dated October 23, 1990, by
                  and between  CCMLP and  Horn-Barlow  Companies  (200 Series of
                  Property Management  Contracts)  (Incorporated by reference to
                  the Annual Report on Form 10-K for the year ended December 31,
                  1991).

      10.10       Assignment and Assumption  Agreement dated October 23, 1990,
                  by and between CCMLP and Metro  ConCap,  Inc. (300 Series of
                  Property Management  Contracts).  (Incorporated by reference
                  to the  Annual  Report  on  Form  10-K  for the  year  ended
                  December 31, 1991).

      10.11       Assignment and Assumption Agreement dated October 23, 1990, by
                  and  between   R&B  Realty   Group  (400  Series  of  Property
                  Management  Contracts).  (Incorporated  by  reference  to  the
                  Annual  Report on Form 10-K for the year  ended  December  31,
                  1991).

      10.12       Assignment  and Assumption  Agreement  dated August 1, 1991,
                  by and between R & B Arizona Management Company,  Inc. and R
                  & B Apartment  Management  Company,  Inc.  (Incorporated  by
                  reference  to the  Annual  Report  on Form 10-K for the year
                  ended December 31, 1991).

      10.13       Assignment  and  Assumption  Agreement  dated  September  1,
                  1991,   by  and   between  the   Partnership   and  CCP  III
                  Associates,    Ltd.    (Property    Agreement    No.   305).
                  (Incorporated  by  reference  to the  Annual  Report on Form
                  10-K for the year ended December 31, 1991).

      10.14       Assignment  and  Assumption  Agreement  dated  September  1,
                  1991,   by  and   between  the   Partnership   and  CCP  III
                  Associates,    Ltd.    (Property    Agreement    No.   104).
                  (Incorporated  by  reference  to the  Annual  Report on Form
                  10-K for the year ended December 31, 1991).

      10.15       Assignment  and  Assumption  Agreement  dated  September  1,
                  1991,   by  and   between  the   Partnership   and  CCP  III
                  Associates,    Ltd.    (Property    Agreement    No.   204).
                  (Incorporated  by  reference  to the  Annual  Report on Form
                  10-K for the year ended December 31, 1991).

      10.16       Construction  Management  Cost  Reimbursement  Agreement dated
                  January  1,  1991,   by  and  between  the   Partnership   and
                  Horn-Barlow    Companies   (the   "Horn-Barlow    Construction
                  Management Agreement").

      10.17       Assignment  and  Assumption  Agreement  dated  September  1,
                  1991, by and between CCP III Associates,  Ltd.  (Horn-Barlow
                  Construction   Management   Agreement).   (Incorporated   by
                  reference  to the  Annual  Report  on Form 10-K for the year
                  ended December 31, 1991).

      10.18       Construction  Management Cost Reimbursement  Agreement dated
                  January 1, 1991,  by and between the  Partnership  and Metro
                  ConCap,   Inc.   (the   "Metro    Construction    Management
                  Agreement").   (Incorporated  by  reference  to  the  Annual
                  Report on Form 10-K for the year ended December 31, 1991).

      10.19       Assignment  and  Assumption  Agreement  dated  September  1,
                  1991,   by  and   between  the   Partnership   and  CCP  III
                  Associates,  Ltd. (Metro Construction Management Agreement).
                  (Incorporated  by  reference  to the  Annual  Report on Form
                  10-K for the year ended December 31, 1991).

      10.20       Construction  Management  Cost  Reimbursement  Agreement dated
                  January 1, 1991, by and between the Partnership and The Hayman
                  Company  (the  "Hayman  Construction  Management  Agreement").
                  (Incorporated  by reference to the Annual  Report on Form 10-K
                  for the year ended December 31, 1991).

      10.21       Assignment  and  Assumption  Agreement  dated  September  1,
                  1991,   by  and   between  the   Partnership   and  CCP  III
                  Associates,    Ltd.    (Hayman    Construction    Management
                  Agreement).  (Incorporated by reference to the Annual Report
                  on Form 10-K for the year ended December 31, 1991).

      10.22       Construction  Management  Cost  Reimbursement  Agreement dated
                  January 1, 1991,  by and  between  the  Partnership  and R & B
                  Apartment Management Company (Incorporated by reference to the
                  Annual  Report on Form 10-K for the year  ended  December  31,
                  1991).

      10.23       Investor  Services  Agreement  dated  October 23, 1990, by and
                  between the Partnership and CCEC (Incorporated by reference to
                  the  Quarterly  Report  on Form  10-Q  for the  quarter  ended
                  September 30, 1990).

      10.24       Assignment  and  Assumption   Agreement   (Investor   Services
                  Agreement)  dated  October 23,  1990,  by and between CCEC and
                  ConCap  Services  Company.  (Incorporated  by reference to the
                  Annual  Report on Form 10-K for the year  ended  December  31,
                  1990).

      10.25       Letter of Notice dated  December 20,  1991,  from  Partnership
                  Services, Inc. ("RSI") to the Partnership regarding the change
                  in  ownership  and  dissolution  of  ConCap  Services  Company
                  whereby   PSI  assumed  the   Investor   Services   Agreement.
                  (Incorporated  by reference to the Annual  Report on Form 10-K
                  for the year ended December 31, 1991).

      10.26       Financial  Services  Agreement  dated October 23, 1990, by and
                  between the Partnership and CCEC (Incorporated by reference to
                  the  Quarterly  Report  on Form  10-Q  for the  quarter  ended
                  September 30, 1990).

      10.27       Assignment  and  Assumption   Agreement   (Financial  Services
                  Agreement)  dated  October 23,  1990,  by and between CCEC and
                  ConCap  Capital  Company  (Incorporated  by  reference  to the
                  Quarterly  Report on Form 10-Q for the quarter ended September
                  30, 1990).

      10.28       Letter of Notice  dated  December  20,  1991,  from PSI to the
                  Partnership  regarding the change in ownership and dissolution
                  of ConCap  Capital  Company  whereby PSI assumed the Financial
                  Services  Agreement.  (Incorporated by reference to the Annual
                  Report on Form 10-K for the year ended December 31, 1991).

      10.29       Property  Management  Agreement  No. 416 dated May 13, 1993,
                  by and  between the  Partnership  and  Coventry  Properties,
                  Inc.  (Incorporated  by reference to the Quarterly Report on
                  Form 10-Q for the quarter ended September 30, 1993).

      10.30       Assignment and  Assumption  Agreement  (Property  Management
                  Agreement  No.  416)  dated  May 13,  1993,  by and  between
                  Coventry   Properties,   Inc.,   R&B  Apartment   Management
                  Company, Inc. and Partnership Services,  Inc.  (Incorporated
                  by  reference to the  Quarterly  Report on Form 10-Q for the
                  quarter ended September 30, 1993).

      10.31       Assignment and Agreement as to Certain  Property  Management
                  Services  dated  May  13,  1993,  by  and  between  Coventry
                  Properties,    Inc.   and   Partnership    Services,    Inc.
                  (Incorporated  by reference to the Quarterly  Report on Form
                  10-Q for the quarter ended September 30, 1993).

      10.32       Property  Management  Agreement No, 418 dated May 13, 1993, by
                  and between the  Partnership  and  Coventry  Properties,  Inc.
                  (Incorporated  by  reference to the  Quarterly  Report on Form
                  10-Q for the quarter ended September 30, 1993).

      10.33       Assignment and  Assumption  Agreement  (Property  Management
                  Agreement  No.  418)  dated  May 13,  1993,  by and  between
                  Coventry   Properties,   Inc.,   R&B  Apartment   Management
                  Company, Inc. and Partnership Services,  Inc.  (Incorporated
                  by  reference to the  Quarterly  Report on Form 10-Q for the
                  quarter ended September 30, 1993).

      10.34       Assignment and Agreement as to Certain  Property  Management
                  Services  dated  May  13,  1993,  by  and  between  Coventry
                  Properties,    Inc.   and   Partnership    Services,    Inc.
                  (Incorporated  by reference to the Quarterly  Report on Form
                  10-Q for the quarter ended September 30, 1993).

      10.35       Property Management  Agreement No, 426 dated June 30, 1993, by
                  and between the  Partnership  and  Coventry  Properties,  Inc.
                  (Incorporated  by  reference to the  Quarterly  Report on Form
                  10-Q for the quarter ended September 30, 1993).

      10.36       Assignment and  Assumption  Agreement  (Property  Management
                  Agreement  No.  426) dated  June 30,  1993,  by and  between
                  Coventry   Properties,   Inc.,   R&B  Apartment   Management
                  Company, Inc. and Partnership Services,  Inc.  (Incorporated
                  by  reference to the  Quarterly  Report on Form 10-Q for the
                  quarter ended September 30, 1993).

      10.37       Assignment and Agreement as to Certain  Property  Management
                  Services  dated  June  30,  1993,  by and  between  Coventry
                  Properties,    Inc.   and   Partnership    Services,    Inc.
                  (Incorporated  by reference to the Quarterly  Report on Form
                  10-Q for the quarter ended September 30, 1993).

      10.38       Property  Management  Agreement  No. 510 dated June 1, 1993,
                  by and  between the  Partnership  and  Coventry  Properties,
                  Inc.

      10.39       Property  Management  Agreement  No.  510A dated  August 18,
                  1993,   by  and  between  the   Partnership   and   Coventry
                  Properties, Inc.

      10.40       Assignment and Agreement as to Certain  Property  Management
                  Services  dated  November 17, 1993, by and between  Coventry
                  Properties, Inc. and Partnership Services, Inc.

      10.41       Property  Management  Agreement  No. 511 dated June 1, 1993,
                  by and between the Partnership and Coventry Properties, Inc.

      10.42       Assignment and Agreement as to Certain  Property  Management
                  Services  dated  November 17, 1993, by and between  Coventry
                  Properties, Inc. and Partnership Services, Inc.

      10.43       Property  Management  Agreement  No. 512 dated June 1, 1993,
                  by and between the Partnership and Coventry Properties, Inc.

      10.44       Assignment and Agreement as to Certain  Property  Management
                  Services  dated  November 17, 1993, by and between  Coventry
                  Properties, Inc. and Partnership Services, Inc.

      10.45       Stock and Asset Purchase  Agreement,  dated December 8, 1994
                  (the "Gordon Agreement"),  among MAE-ICC,  Inc. ("MAE-ICC"),
                  Gordon  Realty  Inc.  ("Gordon"),  GII  Realty,  Inc.  ("GII
                  Realty"),  and  certain  other  parties.   (Incorporated  by
                  reference to Form 8-K dated December 8, 1994).

      10.46       Exercise of the Option (as  defined in the Gordon  Agreement),
                  dated   December   8,  1994,   between   MAE-ICC  and  Gordon.
                  (Incorporated  by  reference  to Form 8-K  dated  December  8,
                  1994).

      10.47       Multifamily  Noted dated  November 14, 1996 between CCP III,
                  a  California  limited  partnership,   and  Lehman  Brothers
                  Holding,  Inc.  d/b/a Lehman  Capital,  A Division of Lehman
                  Brothers Holdings Inc.

      10.48       Multifamily  Noted dated  November 14, 1996 between CCP III,
                  a  California  limited  partnership,   and  Lehman  Brothers
                  Holding,  Inc.  d/b/a Lehman  Capital,  A Division of Lehman
                  Brothers Holdings Inc.

      10.49       Purchase and Sale Contract  between  Registrant  and Goodman
                  Financial Services,  Inc., a Washington  Corporation,  dated
                  May 5, 1999 (sale of  Professional  Plaza - incorporated  by
                  reference to Form 8-K dated July 8, 1999).

      10.50       Multifamily  Note dated  December  1, 1999  between CCP III, a
                  California limited  partnership,  and GMAC Commercial Mortgage
                  Corporation  (West Chase  Apartments note is filed with 10-KSB
                  dated December 31, 1999).

      11          Statement  regarding  computation  of Net Income per Limited
                  Partnership  Unit  (Incorporated  by  reference to Note 1 of
                  Item 8 - Financial Statements of this Form 10-K).

      16.1        Letter,  dated  August  12,  1992,  from  Ernst & Young to the
                  Securities  and  Exchange   Commission   regarding  change  in
                  certifying accountant.  (Incorporated by reference to Form 8-K
                  dated August 6, 1992).

      16.2        Letter  dated  May  9,  1995  from  the  Registrant's   former
                  independent  accountant  regarding  its  concurrence  with the
                  statements  made by the  Registrant  regarding a change in the
                  certifying accountant.  (Incorporated by reference to Form 8-K
                  dated May 3, 1995).

      19.1        Modified  First  Amended  Plan of  Reorganization  for CCP/III
                  Associates,  Ltd.,  dated and filed  March  24,  1992,  in the
                  United States  Bankruptcy  Court for the Northern  District of
                  Texas,  Dallas  Division.  (Incorporated  by  reference to the
                  Annual  Report on Form 10-K for the year  ended  December  31,
                  1992).

      19.2        Modified   First  Amended   Disclosure   Statement  for  the
                  Modified  First Amended Plan of  Reorganization  for CCP/III
                  Associates,  Ltd.,  dated and filed March 24,  1992,  in the
                  United States  Bankruptcy Court for the Northern District of
                  Texas,  Dallas  Division.  (Incorporated by reference to the
                  Annual  Report on Form 10-K for the year ended  December 31,
                  1992).



<PAGE>


      19.3        First   Modification   to  Modified   First  Amended  Plan  of
                  Reorganization for CCP/III  Associates,  Inc., dated and filed
                  April 22, 1992, in the United States  Bankruptcy Court for the
                  Northern District of Texas, Dallas Division.  (Incorporated by
                  reference to the Annual Report on Form 10-K for the year ended
                  December 31, 1992).

      19.4        Second   Modification   to  Modified  First  Amended  Plan  of
                  Reorganization for CCP/III  Associates,  Inc., dated and filed
                  April 29, 1992, in the United States  Bankruptcy Court for the
                  Northern District of Texas, Dallas Division.  (Incorporated by
                  reference to the Annual Report on Form 10-K for the year ended
                  December 31, 1992).

      19.5        Third   Modification   to  Modified   First  Amended  Plan  of
                  Reorganization for CCP/III  Associates,  Inc., dated and filed
                  April 29, 1992, in the United States  Bankruptcy Court for the
                  Northern District of Texas, Dallas Division.  (Incorporated by
                  reference to the Annual Report on Form 10-K for the year ended
                  December 31, 1992).

      18          Independent Accountants'  Preferability Letter for Change in
                  Accounting Principle.

      27          Financial Data Schedule.


<PAGE>


                                                                    Exhibit 18



February 7, 2000



Mr. Patrick J. Foye
Executive Vice President
ConCap Equities, Inc.
General Partner of Consolidated Capital Properties III
55 Beattie Place
P.O. Box 1089
Greenville, South Carolina 29602

Dear Mr. Foye:

Note K of Notes to the Consolidated Financial Statements of Consolidated Capital
Properties  III included in its Form 10-KSB for the year ended December 31, 1999
describes a change in the method of accounting to capitalize  exterior  painting
and major landscaping,  which would have been expensed under the old policy. You
have advised us that you believe  that the change is to a  preferable  method in
your  circumstances  because it provides a better  matching of expenses with the
related benefit of the  expenditures  and is consistent with policies  currently
being used by your industry and conforms to the policies of the General Partner.

There are no authoritative criteria for determining a preferable method based on
the particular circumstances; however, we conclude that the change in the method
of accounting  for exterior  painting and major  landscaping is to an acceptable
alternative  method,  which based on your business  judgment to make this change
for the reasons cited above, is preferable in your circumstances.

                                                             Very truly yours,
                                                          /s/Ernst & Young LLP

<PAGE>
                                                                   Exhibit 10.50
                                                        FHLMC Loan No. 002724642

                                MULTIFAMILY NOTE

                                  (MULTISTATE)

US $1,150,000.00                                       As of December 31, 1999


      FOR VALUE RECEIVED, the undersigned ("Borrower") jointly and severally (if
more  than  one)  promises  to pay to the  order  of  GMAC  COMMERCIAL  MORTGAGE
CORPORATION,  a California  corporation,  the  principal  sum of One Million One
Hundred Fifty Thousand and 00/100 Dollars (US  $1,150,000.00),  with interest on
the  unpaid  principal  balance at the  annual  rate of Seven and Eight  Hundred
Seventy Thousandths percent (7.870%).

1. Defined  Terms.  As used in this Note, (i) the term "Lender" means the holder
of this Note, and (ii) the term "Indebtedness"  means the principal of, interest
on,  or any  other  amounts  due at any time  under,  this  Note,  the  Security
Instrument  or any other Loan  Document,  including  prepayment  premiums,  late
charges,  default interest, and advances to protect the security of the Security
Instrument under Section 12 of the Security  Instrument.  "Event of Default" and
other  capitalized  terms  used but not  defined  in this  Note  shall  have the
meanings given to such terms in the Security Instrument.

2. Address for Payment. All payments due under this Note shall be payable at 650
Dresher Road, P.O. Box 1015, Horsham, Pennsylvania 19044-8015, Attn: Servicing -
Account  Manager,  or such other place as may be designated by written notice to
Borrower from or on behalf of Lender.

3. Payment of Principal  and Interest.  Principal and interest  shall be paid as
follows:

(a) Unless  disbursement of principal is made by Lender to Borrower on the first
day of the month,  interest for the period beginning on the date of disbursement
and ending on and including the last day of the month in which such disbursement
is made  shall be  payable  simultaneously  with  the  execution  of this  Note.
Interest  under  this Note  shall be  computed  on the  basis of a 360-day  year
consisting of twelve 30-day months.

(b)  Consecutive  monthly  installments  of principal and interest,  each in the
amount  of  Nine  Thousand  Five  Hundred  Twenty-Six  and  23/100  Dollars  (US
$9,526.23), shall be payable on the first day of each month beginning on January
1, 2000,  until the entire unpaid  principal  balance  evidenced by this Note is
fully paid. Any accrued interest remaining past due for 30 days or more shall be
added to and become part of the unpaid principal balance and shall bear interest
at the rate or rates specified in this Note, and any reference below to "accrued
interest"  shall  refer to accrued  interest  which has not  become  part of the
unpaid principal balance.  Any remaining principal and interest shall be due and
payable on December 1, 2019 or on any earlier date on which the unpaid principal
balance of this Note becomes due and payable,  by acceleration or otherwise (the
"Maturity  Date").  The unpaid principal balance shall continue to bear interest
after the  Maturity  Date at the  Default  Rate set forth in this Note until and
including the date on which it is paid in full.

(c) Any regularly  scheduled monthly  installment of principal and interest that
is  received  by Lender  before  the date it is due shall be deemed to have been
received on the due date solely for the purpose of calculating interest due.

4.  Application of Payments.  If at any time Lender  receives,  from Borrower or
otherwise,  any amount  applicable  to the  Indebtedness  which is less than all
amounts due and payable at such time,  Lender may apply that  payment to amounts
then due and  payable in any manner and in any order  determined  by Lender,  in
Lender's  discretion.  Borrower  agrees that neither  Lender's  acceptance  of a
payment  from  Borrower in an amount that is less than all amounts  then due and
payable nor Lender's  application of such payment shall  constitute or be deemed
to  constitute  either  a  waiver  of  the  unpaid  amounts  or  an  accord  and
satisfaction.

5. Security.  The Indebtedness is secured,  among other things, by a multifamily
mortgage, deed to secure debt or deed of trust dated as of the date of this Note
(the "Security  Instrument"),  and reference is made to the Security  Instrument
for other rights of Lender as to collateral for the Indebtedness.

6.  Acceleration.  If an Event of Default has  occurred and is  continuing,  the
entire unpaid principal  balance,  any accrued interest,  the prepayment premium
payable under  Paragraph  10, if any, and all other  amounts  payable under this
Note and any other Loan  Document  shall at once become due and payable,  at the
option of Lender, without any prior notice to Borrower. Lender may exercise this
option to accelerate regardless of any prior forbearance.

7. Late  Charge.  If any  monthly  amount  payable  under this Note or under the
Security  Instrument or any other Loan Document is not received by Lender within
ten (10) days after the amount is due, Borrower shall pay to Lender, immediately
and without  demand by Lender,  a late charge equal to five percent (5%) of such
amount.  Borrower  acknowledges  that its failure to make timely  payments  will
cause Lender to incur  additional  expenses in servicing and processing the loan
evidenced  by this Note (the  "Loan"),  and that it is extremely  difficult  and
impractical to determine  those  additional  expenses.  Borrower agrees that the
late charge payable pursuant to this Paragraph  represents a fair and reasonable
estimate,  taking into  account all  circumstances  existing on the date of this
Note,  of the  additional  expenses  Lender  will  incur by  reason of such late
payment.  The late  charge is  payable in  addition  to, and not in lieu of, any
interest payable at the Default Rate pursuant to Paragraph 8.

8. Default Rate. So long as (a) any monthly  installment under this Note remains
past due for 30 days or more, or (b) any other Event of Default has occurred and
is  continuing,  interest  under this Note shall accrue on the unpaid  principal
balance from the earlier of the due date of the first unpaid monthly installment
or the occurrence of such other Event of Default, as applicable,  at a rate (the
"Default Rate") equal to the lesser of 4 percentage points above the rate stated
in the first  paragraph of this Note or the maximum  interest  rate which may be
collected from Borrower under  applicable law. If the unpaid  principal  balance
and all accrued  interest are not paid in full on the Maturity  Date, the unpaid
principal balance and all accrued interest shall bear interest from the Maturity
Date at the Default Rate.  Borrower also  acknowledges  that its failure to make
timely payments will cause Lender to incur additional  expenses in servicing and
processing the Loan, that,  during the time that any monthly  installment  under
this Note is  delinquent  for more than 30 days,  Lender  will incur  additional
costs and  expenses  arising  from its loss of the use of the money due and from
the adverse impact on Lender's ability to meet its other obligations and to take
advantage of other investment opportunities,  and that it is extremely difficult
and impractical to determine those additional costs and expenses.  Borrower also
acknowledges that, during the time that any monthly  installment under this Note
is  delinquent  for more than 30 days or any other Event of Default has occurred
and is  continuing,  Lender's risk of nonpayment of this Note will be materially
increased  and Lender is entitled to be  compensated  for such  increased  risk.
Borrower  agrees that the  increase in the rate of interest  payable  under this
Note to the Default Rate represents a fair and reasonable estimate,  taking into
account all  circumstances  existing on the date of this Note, of the additional
costs and  expenses  Lender  will incur by reason of the  Borrower's  delinquent
payment and the  additional  compensation  Lender is entitled to receive for the
increased risks of nonpayment associated with a delinquent loan.

9.    Limits on Personal Liability.

(a) Except as otherwise  provided in this  Paragraph 9,  Borrower  shall have no
personal  liability  under this Note, the Security  Instrument or any other Loan
Document for the repayment of the  Indebtedness  or for the  performance  of any
other  obligations  of Borrower  under the Loan  Documents,  and  Lender's  only
recourse for the  satisfaction of the  Indebtedness  and the performance of such
obligations  shall be Lender's  exercise of its rights and remedies with respect
to the Mortgaged  Property and any other  collateral  held by Lender as security
for the Indebtedness. This limitation on Borrower's liability shall not limit or
impair  Lender's  enforcement  of  its  rights  against  any  guarantor  of  the
Indebtedness or any guarantor of any obligations of Borrower.

(b) Borrower shall be personally liable to Lender for the repayment of a portion
of the Indebtedness equal to zero percent (0%) of the original principal balance
of this Note,  plus any other amounts for which Borrower has personal  liability
under this Paragraph 9.

(c) In addition to Borrower's  personal liability under Paragraph 9(b), Borrower
shall be personally  liable to Lender for the repayment of a further  portion of
the  Indebtedness  equal to any loss or damage suffered by Lender as a result of
(1) failure of  Borrower to pay to Lender upon demand  after an Event of Default
all  Rents to which  Lender  is  entitled  under  Section  3(a) of the  Security
Instrument  and the amount of all security  deposits  collected by Borrower from
tenants  then in  residence;  (2)  failure of  Borrower  to apply all  insurance
proceeds and condemnation  proceeds as required by the Security  Instrument;  or
(3)  failure of Borrower to comply  with  Section  14(d) or (e) of the  Security
Instrument relating to the delivery of books and records, statements,  schedules
and reports.

(d) For purposes of determining  Borrower's  personal  liability under Paragraph
9(b) and Paragraph  9(c), all payments made by Borrower or any guarantor of this
Note with respect to the  Indebtedness  and all amounts  received by Lender from
the  enforcement  of its rights under the Security  Instrument  shall be applied
first to the  portion of the  Indebtedness  for which  Borrower  has no personal
liability.

(e) Borrower shall become  personally  liable to Lender for the repayment of all
of the  Indebtedness  upon the  occurrence  of any of the  following  Events  of
Default: (1) Borrower's acquisition of any property or operation of any business
not  permitted  by  Section  33 of  the  Security  Instrument;  (2)  a  Transfer
(including,  but not  limited  to,  a lien or  encumbrance)  that is an Event of
Default  under  Section  21 of the  Security  Instrument,  other than a Transfer
consisting  solely of the  involuntary  removal or  involuntary  withdrawal of a
general  partner in a limited  partnership  or a manager in a limited  liability
company; or (3) fraud or written material  misrepresentation  by Borrower or any
officer,  director,  partner,  member or employee of Borrower in connection with
the  application  for or  creation  of the  Indebtedness  or any request for any
action or consent by Lender.

(f) In addition to any personal  liability for the Indebtedness,  Borrower shall
be  personally  liable to Lender for (1) the  performance  of all of  Borrower's
obligations   under  Section  18  of  the  Security   Instrument   (relating  to
environmental  matters);  (2) the costs of any audit under  Section 14(d) of the
Security  Instrument;  and (3) any  costs  and  expenses  incurred  by Lender in
connection  with the  collection of any amount for which  Borrower is personally
liable under this  Paragraph  9,  including  fees and out of pocket  expenses of
attorneys and expert witnesses and the costs of conducting any independent audit
of Borrower's  books and records to determine the amount for which  Borrower has
personal liability.

(g) To the extent that Borrower has personal  liability  under this Paragraph 9,
Lender may exercise its rights  against  Borrower  personally  without regard to
whether  Lender has exercised any rights  against the Mortgaged  Property or any
other  security,  or pursued any rights  against any  guarantor,  or pursued any
other rights available to Lender under this Note, the Security  Instrument,  any
other Loan  Document or  applicable  law. For purposes of this  Paragraph 9, the
term "Mortgaged Property" shall not include any funds that (1) have been applied
by Borrower as required or  permitted by the  Security  Instrument  prior to the
occurrence  of an  Event of  Default  or (2)  Borrower  was  unable  to apply as
required  or  permitted  by the  Security  Instrument  because of a  bankruptcy,
receivership, or similar judicial proceeding.

10.   Voluntary and Involuntary Prepayments.

(a) A prepayment premium shall be payable in connection with any prepayment made
under this Note as provided below:

(1) Borrower may voluntarily  prepay all of the unpaid principal balance of this
Note on the last  Business Day of a calendar  month if Borrower has given Lender
at least 30 days prior  notice of its  intention to make such  prepayment.  Such
prepayment  shall be made by paying (A) the amount of principal  being  prepaid,
(B) all  accrued  interest,  (C) all other  sums due  Lender at the time of such
prepayment,  and (D) the prepayment premium  calculated  pursuant to Schedule A.
For all purposes including the accrual of interest,  any prepayment  received by
Lender on any day other than the last  calendar day of the month shall be deemed
to have been  received on the last  calendar day of such month.  For purposes of
this Note, a "Business  Day" means any day other than a Saturday,  Sunday or any
other day on which Lender is not open for business.  Borrower shall not have the
option to voluntarily prepay less than all of the unpaid principal balance.

(2) Upon  Lender's  exercise  of any  right of  acceleration  under  this  Note,
Borrower shall pay to Lender, in addition to the entire unpaid principal balance
of this  Note  outstanding  at the  time of the  acceleration,  (A) all  accrued
interest  and  all  other  sums  due  Lender,  and (B)  the  prepayment  premium
calculated pursuant to Schedule A.

(3) Any  application  by  Lender  of any  collateral  or other  security  to the
repayment of any portion of the unpaid  principal  balance of this Note prior to
the  Maturity  Date and in the absence of  acceleration  shall be deemed to be a
partial prepayment by Borrower, requiring the payment to Lender by Borrower of a
prepayment premium.  The amount of any such partial prepayment shall be computed
so as to provide to Lender a prepayment  premium computed pursuant to Schedule A
without Borrower having to pay out-of-pocket any additional amounts.

(b)  Notwithstanding  the provisions of Paragraph  10(a), no prepayment  premium
shall be payable with respect to (A) any  prepayment  made no more than 180 days
before the Maturity  Date,  or (B) any  prepayment  occurring as a result of the
application of any insurance  proceeds or condemnation  award under the Security
Instrument.

(c)   Schedule A is hereby incorporated by reference into this Note.

(d) Any  permitted  or  required  prepayment  of less than the unpaid  principal
balance of this Note shall not extend or postpone the due date of any subsequent
monthly  installments or change the amount of such  installments,  unless Lender
agrees otherwise in writing.

(e) Borrower  recognizes that any prepayment of the unpaid principal  balance of
this Note,  whether  voluntary or  involuntary  or  resulting  from a default by
Borrower,  will result in Lender's incurring loss, including  reinvestment loss,
additional expense and frustration or impairment of Lender's ability to meet its
commitments  to third  parties.  Borrower  agrees to pay to Lender  upon  demand
damages  for the  detriment  caused by any  prepayment,  and  agrees  that it is
extremely  difficult  and  impractical  to ascertain the extent of such damages.
Borrower  therefore  acknowledges  and agrees that the  formula for  calculating
prepayment  premiums set forth on Schedule A represents a reasonable estimate of
the damages Lender will incur because of a prepayment.

(f) Borrower further acknowledges that the prepayment premium provisions of this
Note are a material part of the  consideration  for the Loan,  and  acknowledges
that the terms of this Note are in other  respects more favorable to Borrower as
a  result  of the  Borrower's  voluntary  agreement  to the  prepayment  premium
provisions.

11. Costs and  Expenses.  Borrower  shall pay all expenses and costs,  including
fees and  out-of-pocket  expenses of attorneys and expert witnesses and costs of
investigation,  incurred by Lender as a result of any default under this Note or
in  connection  with  efforts to collect  any amount due under this Note,  or to
enforce  the  provisions  of any of the other Loan  Documents,  including  those
incurred in post-judgment  collection  efforts and in any bankruptcy  proceeding
(including  any action  for relief  from the  automatic  stay of any  bankruptcy
proceeding) or judicial or non-judicial foreclosure proceeding.

12.  Forbearance.  Any  forbearance  by Lender in exercising any right or remedy
under  this  Note,  the  Security  Instrument,  or any other  Loan  Document  or
otherwise  afforded by applicable  law, shall not be a waiver of or preclude the
exercise of that or any other right or remedy.  The  acceptance by Lender of any
payment after the due date of such  payment,  or in an amount which is less than
the required payment,  shall not be a waiver of Lender's right to require prompt
payment  when due of all other  payments or to exercise any right or remedy with
respect to any  failure to make  prompt  payment.  Enforcement  by Lender of any
security for  Borrower's  obligations  under this Note shall not  constitute  an
election by Lender of remedies so as to preclude the exercise of any other right
or remedy available to Lender.

13.  Waivers.  Presentment,  demand,  notice  of  dishonor,  protest,  notice of
acceleration,  notice of intent to demand or  accelerate  payment  or  maturity,
presentment  for  payment,  notice  of  nonpayment,   grace,  and  diligence  in
collecting  the  Indebtedness  are  waived by  Borrower  and all  endorsers  and
guarantors of this Note and all other third party obligors.

14. Loan Charges. If any applicable law limiting the amount of interest or other
charges  permitted to be collected from Borrower in connection  with the Loan is
interpreted  so that any  interest  or  other  charge  provided  for in any Loan
Document,  whether considered separately or together with other charges provided
for in any other Loan  Document,  violates that law, and Borrower is entitled to
the benefit of that law, that interest or charge is hereby reduced to the extent
necessary to eliminate that violation.  The amounts,  if any, previously paid to
Lender in excess of the  permitted  amounts shall be applied by Lender to reduce
the  unpaid  principal  balance  of this Note.  For the  purpose of  determining
whether any  applicable  law  limiting  the amount of interest or other  charges
permitted to be collected from Borrower has been violated, all Indebtedness that
constitutes  interest,  as well as all other charges made in connection with the
Indebtedness  that  constitute  interest,  shall be deemed to be  allocated  and
spread ratably over the stated term of the Note.  Unless  otherwise  required by
applicable law, such allocation and spreading shall be effected in such a manner
that the rate of interest so computed is uniform  throughout  the stated term of
the Note.

15.  Commercial  Purpose.  Borrower  represents  that the  Indebtedness is being
incurred  by  Borrower  solely for the  purpose  of  carrying  on a business  or
commercial enterprise, and not for personal, family or household purposes.

16.  Counting  of  Days.  Except  where  otherwise  specifically  provided,  any
reference in this Note to a period of "days" means  calendar  days, not Business
Days.

17. Governing Law. This Note shall be governed by the law of the jurisdiction in
which the Land is located.

18.  Captions.  The captions of the paragraphs of this Note are for  convenience
only and shall be disregarded in construing this Note.

19. Notices. All notices, demands and other communications required or permitted
to be given by  Lender  to  Borrower  pursuant  to this  Note  shall be given in
accordance with Section 31 of the Security Instrument.

20. Consent to  Jurisdiction  and Venue.  Borrower  agrees that any  controversy
arising under or in relation to this Note shall be litigated  exclusively in the
jurisdiction  in which the Land is located (the  "Property  Jurisdiction").  The
state and federal  courts and  authorities  with  jurisdiction  in the  Property
Jurisdiction  shall have exclusive  jurisdiction  over all  controversies  which
shall arise under or in relation to this Note. Borrower  irrevocably consents to
service,  jurisdiction,  and venue of such  courts for any such  litigation  and
waives  any other  venue to which it might be  entitled  by virtue of  domicile,
habitual residence or otherwise.

21. WAIVER OF TRIAL BY JURY.  BORROWER AND LENDER EACH (A) AGREES NOT TO ELECT A
TRIAL  BY JURY  WITH  RESPECT  TO ANY  ISSUE  ARISING  OUT OF  THIS  NOTE OR THE
RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER THAT IS TRIABLE OF RIGHT
BY A JURY AND (B) WAIVES  ANY RIGHT TO TRIAL BY JURY WITH  RESPECT TO SUCH ISSUE
TO THE EXTENT THAT ANY SUCH RIGHT  EXISTS NOW OR IN THE  FUTURE.  THIS WAIVER OF
RIGHT  TO  TRIAL  BY JURY IS  SEPARATELY  GIVEN  BY EACH  PARTY,  KNOWINGLY  AND
VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

      ATTACHED SCHEDULES.  The following Schedules are attached to this Note:

             X       Schedule A    Prepayment Premium (required)

             X       Schedule B    Modifications to Multifamily Note

      IN WITNESS  WHEREOF,  Borrower has signed and  delivered  this Note or has
caused  this  Note  to  be  signed  and   delivered   by  its  duly   authorized
representative.

                                    CONSOLIDATED CAPITAL PROPERTIES III, a
                                    California limited partnership

                                    By:    ConCap Equities, Inc., a Delaware
                                           corporation, its general partner

                                    By:
                                    Name:  Patti K. Fielding
                                    Title: Vice President


                                   94-2653686
                                   Borrower's Social Security/Employer ID Number


<PAGE>


PAY TO THE ORDER OF FEDERAL HOME LOAN MORTGAGE  CORPORATION,  WITHOUT  RECOURSE,
THIS ____ DAY OF NOVEMBER, 1999.

GMAC COMMERCIAL MORTGAGE CORPORATION, a
   California corporation

By:
   Donald W. Marshall
   Vice President


<PAGE>




                                   SCHEDULE A

                               PREPAYMENT PREMIUM

      Any prepayment  premium  payable under  Paragraph 10 of this Note shall be
computed as follows:

(a) If the prepayment is made between the date of this Note and the date that is
180 months after the first day of the first calendar month following the date of
this Note (the "Yield Maintenance Period"),  the prepayment premium shall be the
greater of:

(i) 1.0% of the unpaid principal balance of this Note; or

(ii) the product obtained by multiplying:

(A) the amount of principal being prepaid,

                        by

(B) the excess (if any) of the Monthly  Note Rate over the Assumed  Reinvestment
Rate,

                        by

(C) the Present Value Factor.

For purposes of subparagraph (ii), the following definitions shall apply:

Monthly Note Rate:  one-twelfth  (1/12) of the annual interest rate of the Note,
expressed as a decimal calculated to five digits.

Prepayment  Date: in the case of a voluntary  prepayment,  the date on which the
prepayment is made; in any other case, the date on which Lender  accelerates the
unpaid principal balance of the Note.

Assumed Reinvestment Rate: one-twelfth (1/12) of the yield rate as of the date 5
Business Days before the Prepayment Date, on the 9.250% U.S.  Treasury  Security
due  February 1, 2016,  as reported in The Wall Street  Journal,  expressed as a
decimal  calculated  to five digits.  In the event that no yield is published on
the  applicable  date for the Treasury  Security  used to determine  the Assumed
Reinvestment  Rate,  Lender,  in its discretion,  shall select the  non-callable
Treasury Security  maturing in the same year as the Treasury Security  specified
above with the  lowest  yield  published  in The Wall  Street  Journal as of the
applicable  date.  If the  publication  of such yield  rates in The Wall  Street
Journal is  discontinued  for any reason,  Lender shall select a security with a
comparable rate and term to the Treasury  Security used to determine the Assumed
Reinvestment  Rate.  The  selection  of an alternate  security  pursuant to this
Paragraph shall be made in Lender's discretion.


<PAGE>


Present  Value  Factor:  the factor that  discounts  to present  value the costs
resulting  to Lender from the  difference  in interest  rates  during the months
remaining in the Yield Maintenance Period,  using the Assumed  Reinvestment Rate
as the  discount  rate,  with  monthly  compounding,  expressed  numerically  as
follows:

                                    [OBJECT OMITTED]

            n = number of months remaining in Yield Maintenance Period

            ARR = Assumed Reinvestment Rate

(b) If the  prepayment  is made after the  expiration  of the Yield  Maintenance
Period but more than 180 days before the Maturity Date,  the prepayment  premium
shall be 1.0% of the unpaid principal balance of this Note.


<PAGE>




                                   SCHEDULE B

                        MODIFICATIONS TO MULTIFAMILY NOTE

1. The first  sentence of 8 of the Note  ("Default  Rate") is hereby deleted and
replaced with the following:

            So long as (a) any monthly  installment under this Note remains past
            due for more than thirty (30) days or (b) any other event of Default
            has  occurred  and is  continuing,  interest  under  this Note shall
            accrue on the unpaid  principal  balance from the earlier of the due
            date of the first unpaid  monthly  installment  or the occurrence of
            such other Event of Default, as applicable,  at a rate (the "Default
            Rate")  equal to the lesser of (1) the maximum  interest  rate which
            may be  collected  from  Borrower  under  applicable  law or (2) the
            greater of (i) three  percent (3%) above the  Interest  Rate or (ii)
            four percent  (4.0%) above the  then-prevailing  Prime Rate. As used
            herein,  the term  "Prime  Rate"  shall  mean  the rate of  interest
            announced by The Wall Street Journal from time to time as the "Prime
            Rate".

2. Paragraph 9(c) of the Note is amended to add the following subparagraph (4):

(4)         failure  by  Borrower  to pay the  amount  of the  water  and  sewer
            charges,  taxes,  fire, hazard or other insurance  premiums,  ground
            rents in accordance with the terms of the Security Instrument.