UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

 (Mark One)
[X]   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934


                 For the fiscal year ended December 31, 2004

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934


             For the transition period from _________to _________

                         Commission file number 0-10273

                       CONSOLIDATED CAPITAL 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.  [X]

State issuer's revenues for its most recent fiscal year.  $2,436,000

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, 2004. 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

The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government  regulations.  Actual results may differ materially
from those described in the forward-looking statements and will be affected by a
variety of risks and factors including,  without limitation:  national and local
economic  conditions;  the terms of  governmental  regulations  that  affect the
Registrant and interpretations of those regulations; the competitive environment
in which the Registrant operates;  financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest;  real estate risks, including variations of real estate values and
the general  economic  climate in local markets and  competition  for tenants in
such markets;  litigation,  including  costs  associated  with  prosecuting  and
defending  claims  and  any  adverse   outcomes,   and  possible   environmental
liabilities.   Readers  should  carefully  review  the  Registrant's   financial
statements and the notes thereto,  as well as the risk factors  described in the
documents  the  Registrant  files  from  time to time  with the  Securities  and
Exchange Commission.

                                     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,  120,000 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" or "General
Partner") 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"), a publicly traded real estate investment trust.

The  Partnership is engaged in the business of operating and holding real estate
properties  for  investment.  At December 31, 2004,  the  Partnership  owned two
apartment  complexes.  On September 29, 2003,  the  Partnership  sold one of its
investment  properties,  West Chase  Apartments.  Prior to 2003, the Partnership
disposed  of  twenty-seven  properties,  two of which  were  reacquired  through
foreclosure.  See "Item 2. Description of Properties" below for a description of
the Partnership's remaining properties.

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.

Risk Factors

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.

Laws benefiting  disabled persons may result in the Partnership's  incurrence of
unanticipated  expenses.  Under the Americans with  Disabilities Act of 1990, or
ADA,  all places  intended to be used by the public are required to meet certain
Federal  requirements  related to access and use by disabled persons.  Likewise,
the Fair Housing Amendments Act of 1988, or FHAA, requires apartment  properties
first occupied after March 13, 1990 to be accessible to the  handicapped.  These
and other  Federal,  state  and  local  laws may  require  modifications  to the
Partnership's   properties,   or  restrict   renovations   of  the   properties.
Noncompliance  with  these laws could  result in the  imposition  of fines or an
award of  damages  to private  litigants  and also  could  result in an order to
correct any  non-complying  feature,  which could result in substantial  capital
expenditures.  Although  the General  Partner  believes  that the  Partnership's
properties  are  substantially  in  compliance  with present  requirements,  the
Partnership  may incur  unanticipated  expenses  to comply  with the ADA and the
FHAA.

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.

From time to time, the Federal Bureau of  Investigation,  or FBI, and the United
States  Department  of  Homeland  Security  issue  alerts  regarding   potential
terrorist threats  involving  apartment  buildings.  Threats of future terrorist
attacks,  such as those  announced  by the FBI and the  Department  of  Homeland
Security,  could  have a  negative  effect on rent and  occupancy  levels at the
Partnership's properties. The effect that future terrorist activities or threats
of such activities could have on the  Partnership's  operations is uncertain and
unpredictable. If the Partnership were to incur a loss at a property as a result
of an act of  terrorism,  the  Partnership  could  lose all or a portion  of the
capital  invested  in the  property,  as well as the  future  revenue  from  the
property.  In this regard, the Partnership has purchased insurance to cover acts
of terrorism. The General Partner does not anticipate that these costs will have
a negative  effect on the  Partnership's  consolidated  financial  condition  or
results of operations.

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 "Item 6 -
Management's Discussion and Analysis or Plan of Operation" included in this Form
10-KSB.

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

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

Sale of Property

On September 29, 2003,  the  Partnership  sold West Chase  Apartments to a third
party for a gross  sale  price of  approximately  $2,124,000.  The net  proceeds
realized by the  Partnership  were  approximately  $1,651,000  after  payment of
closing   costs  of   approximately   $174,000  and  a  prepayment   penalty  of
approximately  $299,000  owed by the  Partnership  and  paid by the  buyer.  The
Partnership  used  approximately  $1,047,000  of the net  proceeds  to repay the
mortgage  encumbering  the property.  As a result of the sale,  the  Partnership
realized a gain of  approximately  $1,058,000  for the year ended  December  31,
2003. In addition,  the Partnership  recorded a loss on early  extinguishment of
debt of  approximately  $332,000 due to the write off of unamortized  loan costs
and a prepayment penalty.

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  Depreciable               Federal
Property                   Value    Depreciation      Life      Method     Tax Basis
                              (in thousands)                            (in thousands)

Ventura Landing
<S>                       <C>          <C>          <C>                     <C>
 Apartments               $ 6,471      $ 5,300      5-30 yrs     S/L        $ 1,270
Village Green
 Apartments                 3,827        2,822      3-30 yrs     S/L          3,208
         Total            $10,298      $ 8,122                              $ 4,478
</TABLE>

See "Note A - Organization  and Summary of Significant  Accounting  Policies" to
the consolidated financial statements included in "Item 7. Financial Statements"
for a description of the Partnership's capitalization and depreciation policies.

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           2004 (1)        Rate     Amortized(2)     Date     Maturity (2)
                     (in thousands)                                       (in thousands)

Ventura Landing
<S>                     <C>            <C>          <C>           <C>          <C>
 Apartments             $ 3,871        7.54%        20 yrs        07/21        $ --
Village Green
 Apartments               3,284        7.54%        20 yrs        08/21            --

      Totals            $ 7,155                                                $ --
</TABLE>

(1)   See  "Note D -  Mortgage  Notes  Payable"  to the  consolidated  financial
      statements included in "Item 7. Financial Statements" for information with
      respect to the  Registrant's  ability to prepay these fixed rate loans and
      other specific details about the loans.

(2)   The mortgage is scheduled to be fully amortized at maturity.

Rental Rates and Occupancy

Average  annual  rental rates and  occupancy for 2004 and 2003 for each property
are as follows:
<TABLE>
<CAPTION>

                                         Average Annual            Average Annual
                                          Rental Rates               Occupancy
                                           (per unit)
 Property                             2004           2003          2004      2003

<S>                                  <C>            <C>            <C>        <C>
 Ventura Landing Apartments          $7,176         $7,103         94%        95%
 Village Green Apartments             6,964          7,000         94%        94%
</TABLE>

As noted under "Item 1.  Description of Business",  the real estate  industry is
highly competitive. Both 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. Both of the
properties are in good physical  condition,  subject to normal  depreciation and
deterioration as is typical for assets of this type and age.

Real Estate Taxes and Rates

Real estate taxes and rates in 2004 for each property are as follows:

                                             2004           2004
                                           Billing          Rate
                                        (in thousands)

Ventura Landing Apartments                   $98           2.22%
Village Green Apartments                      82           1.97%

Capital Improvements

Village Green Apartments

The  Partnership  completed  approximately  $147,000 in capital  expenditures at
Village  Green  Apartments  for the year ended  December  31,  2004,  consisting
primarily of structural  improvements,  parking area upgrades,  air conditioning
upgrades,  and floor covering  replacement.  These improvements were funded from
operations  and an  advance  from  an  affiliate  of the  General  Partner.  The
Partnership  regularly  evaluates the capital improvement needs of the property.
While the Partnership has no material commitments for property  improvements and
replacements,  certain routine capital expenditures are anticipated during 2005.
Such capital  expenditures will depend on the physical condition of the property
as well as anticipated cash flow generated by the property.

Ventura Landing Apartments

The  Partnership  completed  approximately  $340,000 in capital  expenditures at
Ventura  Landing  Apartments  for the year ended  December 31, 2004,  consisting
primarily of structural  improvements,  exterior  painting,  major  landscaping,
fencing  upgrades,  parking area  resurfacing,  and floor covering  replacement.
These  improvements were funded from operations and an advance from an affiliate
of  the  General  Partner.  The  Partnership  regularly  evaluates  the  capital
improvement  needs  of the  property.  While  the  Partnership  has no  material
commitments for property improvements and replacements,  certain routine capital
expenditures are anticipated during 2005. Such capital  expenditures will depend
on the  physical  condition  of the  property as well as  anticipated  cash flow
generated by the property.

Capital  improvements  will be made only to the  extent of cash  available  from
operations and Partnership reserves. To the extent that capital improvements are
completed,  the Partnership'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. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the Partnership,  its General Partner and several of
their affiliated  partnerships and corporate  entities.  The action purported to
assert  claims on behalf of a class of  limited  partners  and  derivatively  on
behalf of a number of limited partnerships  (including the Partnership) that are
named as nominal defendants, challenging, among other things, the acquisition of
interests in certain General Partner entities by Insignia  Financial Group, Inc.
("Insignia") and entities that were, at one time,  affiliates of Insignia;  past
tender offers by the Insignia  affiliates to acquire limited  partnership units;
management of the  partnerships  by the Insignia  affiliates;  and the series of
transactions  which  closed on October 1, 1998 and  February  26,  1999  whereby
Insignia and Insignia  Properties Trust,  respectively,  were merged into AIMCO.
The plaintiffs sought monetary damages and equitable relief,  including judicial
dissolution of the Partnership. In addition, during the third quarter of 2001, a
complaint captioned Heller v. Insignia Financial Group (the "Heller action") was
filed against the same  defendants  that are named in the Nuanes  action.  On or
about August 6, 2001, the plaintiffs filed a first amended complaint. The Heller
action was brought as a purported  derivative  action,  and asserted claims for,
among other things,  breach of fiduciary duty, unfair  competition,  conversion,
unjust enrichment, and judicial dissolution.

On January 8, 2003,  the parties filed a  Stipulation  of Settlement in proposed
settlement of the Nuanes action and the Heller action.

In general  terms,  the  proposed  settlement  provides  for  certification  for
settlement  purposes of a settlement class consisting of all limited partners in
this  Partnership and others (the  "Partnerships")  as of December 20, 2002, the
dismissal  with  prejudice  and  release  of claims  in the  Nuanes  and  Heller
litigation,  payment by AIMCO of $9.9  million  (which shall be  distributed  to
settlement  class  members  after  deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent  appraisals of the  Partnerships'  properties  by a court  appointed
appraiser.  An affiliate of the General Partner has also agreed to make at least
one round of tender offers to purchase all of the  partnership  interests in the
Partnerships within one year of final approval, if it is granted, and to provide
partners  with the  independent  appraisals  at the time of these  tenders.  The
proposed  settlement  also provided for the  limitation  of the allowable  costs
which the General  Partner or its  affiliates  will charge the  Partnerships  in
connection with this litigation and imposes limits on the class counsel fees and
costs in this litigation.  On April 11, 2003,  notice was distributed to limited
partners providing the details of the proposed settlement.

On June 13, 2003, the court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.  On August 12, 2003, an objector
("Objector") filed an appeal (the "Appeal") seeking to vacate and/or reverse the
order approving the settlement and entering  judgment  thereto.  On November 24,
2003,  the Objector  filed an  application  requesting  the court order AIMCO to
withdraw settlement tender offers it had commenced,  refrain from making further
offers  pending  the appeal and auction  any units  tendered  to third  parties,
contending  that the offers did not  conform  with the terms of the  settlement.
Counsel  for the  Objector  (on behalf of another  investor)  had  alternatively
requested the court take certain action  purportedly to enforce the terms of the
settlement agreement. On December 18, 2003, the court heard oral argument on the
motions  and denied them both in their  entirety.  The  Objector  filed a second
appeal challenging the court's use of a referee and its order requiring Objector
to pay those fees.

On January 28, 2004,  the  Objector  filed his opening  brief in the Appeal.  On
April 23, 2004, the General Partner and its affiliates filed a response brief in
support of the settlement  and the judgment  thereto.  The plaintiffs  have also
filed a brief in support of the  settlement.  On June 4, 2004,  Objector filed a
reply to the briefs submitted by the General Partner and Plaintiffs. In addition
both the Objector and  plaintiffs  filed  briefs in  connection  with the second
appeal.  On March 21, 2005, the Court of Appeals issued opinions in both pending
appeals.  With regard to the settlement and judgment entered thereto,  the Court
of Appeals  vacated the trial  court's order and remanded to the trial court for
further  findings on the basis that the "state of the record is  insufficient to
permit meaningful appellate review". With regard to the second appeal, the Court
of Appeals reversed the order requiring the Objector to pay referee fees.

The  General  Partner  does not  anticipate  that any costs to the  Partnership,
whether legal or settlement costs,  associated with these cases will be material
to the Partnership's overall operations.

As previously disclosed,  AIMCO Properties L.P. and NHP Management Company, both
affiliates  of the General  Partner,  are  defendants in an action in the United
States  District Court,  District of Columbia.  The plaintiffs have styled their
complaint as a collective action under the Fair Labor Standards Act ("FLSA") and
seek to certify state  subclasses in California,  Maryland,  and the District of
Columbia. Specifically, the plaintiffs contend that AIMCO Properties L.P. failed
to  compensate  maintenance  workers  for time  that they  were  required  to be
"on-call."  Additionally,  plaintiffs  allege AIMCO  Properties  L.P.  failed to
comply  with the FLSA in  compensating  maintenance  workers  for time that they
worked in responding to a call while  "on-call."  The  defendants  have filed an
answer to the amended complaint denying the substantive  allegations.  Discovery
relating  to the  certification  of the  collective  action  has  concluded  and
briefing on the matter is underway.  Although the outcome of any  litigation  is
uncertain,  AIMCO  Properties,  L.P. does not believe that the ultimate  outcome
will have a material  adverse  effect on its  financial  condition or results of
operations.  Similarly,  the General  Partner does not believe that the ultimate
outcome will have a material  adverse effect on the  Partnership's  consolidated
financial condition or results of operations.

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

The  unit  holders  of the  Partnership  did  not  vote  on any  matter  through
solicitation of proxies or otherwise during the quarter ended December 31, 2004.

                                     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 (the  "Units")  aggregating  $79,473,000.  In  addition,  the
General  Partner  contributed  a  total  of  $1,000  to  the  Partnership.   The
Partnership currently has 4,534 holders of record owning an aggregate of 158,582
Units.  Affiliates  of the General  Partner owned  83,941.50  Units or 52.93% at
December 31, 2004.

The  Partnership  distributed  the  following  amounts  during  the years  ended
December 31, 2004 and 2003 (in thousands, except per unit data):
<TABLE>
<CAPTION>

                                       Per Limited                        Per Limited
                      Year Ended       Partnership        Year Ended      Partnership
                  December 31, 2004        Unit       December 31, 2003       Unit
Sale
<S>       <C>          <C>                <C>              <C>                 <C>
 proceeds (1)          $   --             $   --           $  303              $ 1.91
</TABLE>

(1) From proceeds from the sale of West Chase Apartments.

Future cash  distributions  will depend on the levels of net cash generated from
operations, property sales and/or refinancings. The Partnership's cash available
for distribution is reviewed on a monthly basis.  There can be no assurance that
the Partnership  will generate  sufficient  funds from operations after required
capital  expenditures  to permit any  distributions  to its partners in the year
2005 or subsequent periods.

In addition to its indirect  ownership of the general  partner  interests in the
Partnership,  AIMCO and its affiliates  owned 83,941.50 Units in the Partnership
representing  52.93% of the outstanding  Units at December 31, 2004. A number of
these  Units  were  acquired  pursuant  to  tender  offers  made by AIMCO or its
affiliates.  It is possible that AIMCO or its affiliates will acquire additional
Units  in  exchange  for  cash or a  combination  of cash  and  units  in  AIMCO
Properties,  L.P., the operating  partnership of AIMCO,  either through  private
purchases or tender offers.  Pursuant to the Partnership Agreement,  unitholders
holding a majority of the Units are  entitled  to take action with  respect to a
variety of matters  that  include,  but are not  limited  to,  voting on certain
amendments  to the  Partnership  Agreement  and  voting  to remove  the  General
Partner.  As a result of its ownership of 52.93% of the outstanding Units, AIMCO
and its  affiliates  are in a position  to control  all  voting  decisions  with
respect to the  Partnership.  Although the General Partner owes fiduciary duties
to the  limited  partners of the  Partnership,  the  General  Partner  also owes
fiduciary duties to AIMCO as its sole  stockholder.  As a result,  the duties of
the General  Partner,  as general  partner,  to the  Partnership and its limited
partners may come into conflict with the duties of the General  Partner to AIMCO
as its sole stockholder.

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

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

The  Partnership's  financial  results depend upon a number of factors including
the  ability to attract  and  maintain  tenants  at the  investment  properties,
interest  rates on mortgage  loans,  costs  incurred  to operate the  investment
properties,  general  economic  conditions  and weather.  As part of the ongoing
business plan of the Partnership, the General Partner monitors the rental market
environment of its investment properties to assess the feasibility of increasing
rents, maintaining or increasing occupancy levels and protecting the Partnership
from increases in expenses.  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,  the  General  Partner  may use  rental  concessions  and  rental  rate
reductions  to offset  softening  market  conditions;  accordingly,  there is no
guarantee that the General Partner will be able to sustain such a plan. Further,
a number of factors that are outside the control of the Partnership, such as the
local  economic  climate and weather,  can  adversely or  positively  affect the
Partnership's financial results.

Results of Operations

The   Partnership's   net  loss  for  the  year  ended  December  31,  2004  was
approximately  $421,000, as compared to net income of approximately $214,000 for
the year ended  December 31, 2003. On September 29, 2003, the  Partnership  sold
West Chase  Apartments to a third party for a gross sales price of approximately
$2,124,000.  The net proceeds  realized by the  Partnership  were  approximately
$1,651,000  after  payment  of closing  costs of  approximately  $174,000  and a
prepayment penalty of approximately $299,000 owed by the Partnership and paid by
the buyer. The Partnership used approximately  $1,047,000 of the net proceeds to
repay the  mortgage  encumbering  the  property.  As a result  of the sale,  the
Partnership  realized a gain of approximately  $1,058,000,  which is included in
gain from sale of  discontinued  operations  on the  consolidated  statements of
operations   included  in  "Item  7.  Financial   Statements".   The  property's
operations,  loss of approximately $506,000 for the year ended December 31, 2003
are included in loss from  discontinued  operations.  Also included in loss from
discontinued  operations  are  revenues of  approximately  $474,000 for the year
ended December 31, 2003. In addition,  the Partnership  recorded a loss on early
extinguishment of debt of approximately $332,000 for the year ended December 31,
2003, due to the write off of unamortized  loan costs and a prepayment  penalty,
which is also included in loss from discontinued  operations on the accompanying
consolidated statements of operations.

The  Partnership's  loss from continuing  operations for the year ended December
31,  2004 was  approximately  $421,000,  as  compared  to loss  from  continuing
operations of  approximately  $338,000 for the year ended December 31, 2003. The
increase  in loss from  continuing  operations  is due to an  increase  in total
expenses.  The  increase in total  expenses  is due to an increase in  operating
expenses,   partially   offset  by   decreases   in  interest  and  general  and
administrative  expenses.  Both  depreciation  and property tax expense remained
relatively  constant  for the  comparable  periods.  The  increase in  operating
expenses is primarily due to increases in advertising, payroll related expenses,
and cleanup  expenses  related to damage  sustained from Hurricanes  Charley and
Frances at Ventura  Landing  Apartments  (as discussed  below).  The decrease in
interest  expense  is a  result  of  scheduled  principal  payments  made on the
mortgages encumbering the Partnership's investment properties, which reduced the
carrying balance of the loans,  partially offset by interest expense on advances
from an affiliate of the General Partner.  General and  administrative  expenses
decreased  primarily  due to decreases in the costs of services  included in the
management   reimbursements   to  the  General  Partner  as  allowed  under  the
Partnership  Agreement and audit fees.  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 in general and
administrative expenses for the years ended December 31, 2004 and 2003.

Total revenues remained  relatively  constant for the comparable  periods, as an
increase in rental income was offset by a decrease in other income. The increase
in rental income is primarily  due to an increase in the average  rental rate at
Ventura  Landing  Apartments and reduced bad debt expense,  partially  offset by
decreases in occupancy at Ventura Landing Apartments and the average rental rate
at Village Green  Apartments.  Other income  decreased  primarily as a result of
decreases in laundry  income and resident  move-out  charges at Ventura  Landing
Apartments.

In August 2004,  Ventura Landing  Apartments  experienced  damage from Hurricane
Charley.  As  of  December  31,  2004,  the  Partnership   estimates  damage  of
approximately  $210,000.  The  Partnership  does not expect a  casualty  loss to
result from the damage as the damaged assets were fully depreciated.

In September 2004, Ventura Landing Apartments  experienced damage from Hurricane
Frances.  As  of  December  31,  2004,  the  Partnership   estimates  damage  of
approximately $37,000. The Partnership does not expect a casualty loss to result
from the damage as the damaged assets were fully depreciated.

Liquidity and Capital Resources

At  December  31,  2004,  the  Partnership  had  cash and  cash  equivalents  of
approximately  $83,000,  compared to approximately $52,000 at December 31, 2003.
The increase in cash and cash  equivalents  of  approximately  $31,000 is due to
approximately   $345,000  of  cash   provided  by   financing   activities   and
approximately  $173,000 of cash  provided  by  operating  activities,  partially
offset by  approximately  $487,000 of cash used in  investing  activities.  Cash
provided by financing  activities consisted of advances from an affiliate of the
General Partner, partially offset by payments of principal made on the mortgages
encumbering  the  Partnership's  investment  properties.  Cash used in investing
activities consisted of property improvements and replacements.  The Partnership
invests its working capital reserves in interest bearing accounts.

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 Partnership and to comply with Federal,
state, and local legal and regulatory requirements. The General Partner monitors
developments in the area of legal and regulatory  compliance.  For example,  the
Sarbanes-Oxley Act of 2002 mandates or suggests  additional  compliance measures
with regard to governance,  disclosure, audit and other areas. In light of these
changes,  the Partnership  expects that it will incur higher expenses related to
compliance. The Partnership regularly evaluates the capital improvement needs of
the properties.  While the Partnership has no material  commitments for property
improvements  and  replacements,   certain  routine  capital   expenditures  are
anticipated  during 2005. Such capital  expenditures will depend on the physical
condition of the  properties as well as  anticipated  cash flow generated by the
properties.

Capital  expenditures will be incurred only if cash is available from operations
or from  Partnership  reserves.  To the extent  that  capital  improvements  are
completed,  the Partnership's  distributable cash flow, if any, may be adversely
affected at least in the short term.

The  Partnership's  assets are thought to be sufficient for any near-term  needs
(exclusive  of  capital   improvements)   of  the   Partnership.   The  mortgage
indebtedness    encumbering   the   Partnership's   investment   properties   of
approximately  $7,155,000  requires  monthly  payments of principal and interest
until the loans mature between July and August 2021, at which time the loans are
scheduled to be fully amortized.

The  Partnership  distributed  the  following  amounts  during  the years  ended
December 31, 2004 and 2003 (in thousands, except per unit data):
<TABLE>
<CAPTION>

                                       Per Limited                        Per Limited
                      Year Ended       Partnership        Year Ended      Partnership
                  December 31, 2004        Unit       December 31, 2003       Unit
Sale
<S>       <C>          <C>                <C>              <C>                 <C>
 proceeds (1)          $   --             $   --           $  303              $ 1.91
</TABLE>

(1) From proceeds from the sale of West Chase Apartments.

Future cash  distributions  will depend on the levels of net cash generated from
operations, property sales and/or refinancings. The Partnership's cash available
for distribution is reviewed on a monthly basis.  There can be no assurance that
the Partnership  will generate  sufficient  funds from operations after required
capital  expenditures  to permit any  distributions  to its partners in the year
2005 or subsequent periods.

Other

In addition to its indirect  ownership of the general  partner  interests in the
Partnership,  AIMCO and its affiliates  owned 83,941.50 Units in the Partnership
representing  52.93% of the outstanding  Units at December 31, 2004. A number of
these  Units  were  acquired  pursuant  to  tender  offers  made by AIMCO or its
affiliates.  It is possible that AIMCO or its affiliates will acquire additional
Units  in  exchange  for  cash or a  combination  of cash  and  units  in  AIMCO
Properties,  L.P., the operating  partnership of AIMCO,  either through  private
purchases or tender offers.  Pursuant to the Partnership Agreement,  unitholders
holding a majority of the Units are  entitled  to take action with  respect to a
variety of matters  that  include,  but are not  limited  to,  voting on certain
amendments  to the  Partnership  Agreement  and  voting  to remove  the  General
Partner.  As a result of its ownership of 52.93% of the outstanding Units, AIMCO
and its  affiliates  are in a position  to control  all  voting  decisions  with
respect to the  Partnership.  Although the General Partner owes fiduciary duties
to the  limited  partners of the  Partnership,  the  General  Partner  also owes
fiduciary duties to AIMCO as its sole  stockholder.  As a result,  the duties of
the General  Partner,  as general  partner,  to the  Partnership and its limited
partners may come into conflict with the duties of the General  Partner to AIMCO
as its sole stockholder.

Critical Accounting Policies and Estimates

A summary of the Partnership's  significant  accounting  policies is included in
"Note A - Organization and Summary of Significant  Accounting Policies" which is
included  in  the  consolidated  financial  statements  in  "Item  7.  Financial
Statements".  Management  believes  that  the  consistent  application  of these
policies enables the Partnership to provide readers of the financial  statements
with useful and reliable  information about the Partnership's  operating results
and financial condition. The preparation of consolidated financial statements in
conformity with accounting  principles  generally  accepted in the United States
requires the Partnership to make estimates and assumptions.  These estimates and
assumptions affect the reported amounts of assets and liabilities at the date of
the financial  statements  as well as reported  amounts of revenues and expenses
during the reporting  period.  Actual results could differ from these estimates.
Judgments  and  assessments  of  uncertainties  are  required  in  applying  the
Partnership's  accounting  policies in many areas.  The  following may involve a
higher degree of judgment and complexity.

Impairment of Long-Lived Assets

Investment  properties  are  recorded at cost,  less  accumulated  depreciation,
unless  considered  impaired.  If  events  or  circumstances  indicate  that the
carrying  amount of a property may be  impaired,  the  Partnership  will make an
assessment of its  recoverability  by estimating  the  undiscounted  future cash
flows,  excluding  interest  charges,  of the property.  If the carrying  amount
exceeds the aggregate  future cash flows,  the  Partnership  would  recognize an
impairment  loss to the extent the carrying amount exceeds the fair value of the
property.

Real  property  investments  are  subject  to varying  degrees of risk.  Several
factors  may  adversely  affect  the  economic  performance  and  value  of  the
Partnership's investment properties.  These factors include, but are not limited
to,  changes  in the  national,  regional  and  local  economic  climate;  local
conditions,  such as an oversupply of multifamily  properties;  competition from
other available  multifamily property owners and changes in market rental rates.
Any adverse changes in these factors could cause impairment of the Partnership's
assets.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less.
The Partnership will offer rental concessions during particularly slow months or
in response  to heavy  competition  from other  similar  complexes  in the area.
Rental income attributable to leases, net of any concessions, is recognized on a
straight-line  basis over the term of the lease.  The Partnership  evaluates all
accounts  receivable  from  residents and  establishes  an allowance,  after the
application of security deposits,  for accounts greater than 30 days past due on
current tenants and all receivables due from former tenants.

Item 7.     Financial Statements


CONSOLIDATED CAPITAL PROPERTIES III

LIST OF FINANCIAL STATEMENTS


      Report of Independent Registered Public Accounting Firm

      Consolidated Balance Sheet - December 31, 2004

      Consolidated  Statements of  Operations - Years ended  December 31, 2004
      and 2003

      Consolidated  Statements  of Changes in Partners'  Deficit - Years ended
      December 31, 2004 and 2003

      Consolidated Statements of Cash Flows - Years ended December 31, 2004
      and 2003

      Notes to Consolidated Financial Statements


<PAGE>


           Report of Independent Registered Public Accounting Firm


The Partners
Consolidated Capital Properties III


We have audited the  accompanying  consolidated  balance  sheet of  Consolidated
Capital  Properties  III as of December 31, 2004,  and the related  consolidated
statements of operations,  changes in partners' deficit, and cash flows for each
of the two  years  in the  period  ended  December  31,  2004.  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 the standards of the Public  Company
Accounting Oversight Board (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.  We were not engaged to perform an
audit of the Partnership's internal control over financial reporting.  Our audit
included  consideration of internal control over financial  reporting as a basis
for designing audit  procedures that are appropriate in the  circumstances,  but
not for the  purpose  of  expressing  an  opinion  on the  effectiveness  of the
Partnership's internal control over financial reporting. Accordingly, we express
no such opinion.  An audit also includes  examining,  on a test basis,  evidence
supporting the amounts and  disclosures in the financial  statements,  assessing
the accounting principles used and significant estimates made by management, and
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, 2004, and the consolidated results of its
operations  and its cash  flows  for each of the two years in the  period  ended
December 31, 2004, in conformity with accounting  principles  generally accepted
in the United States.

                                                          /s/ERNST & YOUNG LLP



Greenville, South Carolina
March 21, 2005


<PAGE>



                       CONSOLIDATED CAPITAL PROPERTIES III

                           CONSOLIDATED BALANCE SHEET
                        (in thousands, except unit data)

                                December 31, 2004
<TABLE>
<CAPTION>


Assets
<S>                                                                           <C>
   Cash and cash equivalents                                                  $ 83
   Receivables and deposits                                                     103
   Other assets                                                                 320
   Investment properties (Notes D and F):
      Land                                                     $ 407
      Buildings and related personal property                   9,891
                                                               10,298
      Less accumulated depreciation                            (8,122)        2,176
                                                                            $ 2,682

Liabilities and Partners' Deficit
Liabilities
   Accounts payable                                                           $ 94
   Tenant security deposit liabilities                                           65
   Other liabilities                                                            234
   Due to affiliates (Note B)                                                   791
   Mortgage notes payable (Note D)                                            7,155

Partners' Deficit
   General partners                                            $(1,895)
   Limited partners (158,582 units issued and
      outstanding)                                             (3,762)       (5,657)
                                                                            $ 2,682

        See Accompanying Notes to Consolidated Financial Statements
</TABLE>

<PAGE>


                       CONSOLIDATED CAPITAL PROPERTIES III

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per unit data)

<TABLE>
<CAPTION>

                                                                Years Ended December 31,
                                                                  2004           2003
Revenues:
<S>                                                             <C>             <C>
  Rental income                                                 $ 2,234         $ 2,214
  Other income                                                      201             217
     Total revenues                                               2,435           2,431

Expenses:
  Operating                                                       1,419           1,241
  General and administrative                                        217             307
  Depreciation                                                      456             454
  Interest                                                          587             593
  Property taxes                                                    177             174
     Total expenses                                               2,856           2,769

Loss from continuing operations                                    (421)           (338)
Loss from discontinued operations                                    --            (506)
Gain from sale of discontinued operations                            --           1,058
Net (loss) income (Note E)                                       $ (421)         $ 214

Net (loss) income allocated to general partners (4%)             $ (17)           $ 9
Net (loss) income allocated to limited partners (96%)              (404)            205
                                                                 $ (421)         $ 214
Per limited partnership unit:
Loss from continuing operations                                 $ (2.55)        $ (2.05)
Loss from discontinued operations                                    --           (3.07)
Gain from sale of discontinued operations                            --            6.41
Net (loss) income                                               $ (2.55)        $ 1.29

Distributions per limited partnership unit                        $ --          $ 1.91

        See Accompanying Notes to Consolidated Financial Statements
</TABLE>

<PAGE>


                       CONSOLIDATED CAPITAL PROPERTIES III

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

<TABLE>
<CAPTION>


                                         Limited
                                       Partnership    General     Limited
                                          Units      Partners    Partners     Total

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

Partners' deficit at
   December 31, 2002                     158,582      $(1,887)    $(3,260)  $ (5,147)

Distributions to partners                     --           --        (303)      (303)

Net income for the year ended
   December 31, 2003                          --            9         205        214

Partners' deficit at
   December 31, 2003                     158,582       (1,878)     (3,358)    (5,236)

Net loss for the year ended
   December 31, 2004                          --          (17)       (404)      (421)

Partners' deficit at
   December 31, 2004                     158,582      $(1,895)    $(3,762)   $(5,657)

        See Accompanying Notes to Consolidated Financial Statements
</TABLE>



<PAGE>


                       CONSOLIDATED CAPITAL PROPERTIES III

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
<TABLE>
<CAPTION>

                                                              Years Ended December 31,
                                                                  2004         2003
Cash flows from operating activities:
<S>                                                              <C>           <C>
  Net (loss) income                                              $ (421)       $ 214
  Adjustments to reconcile net (loss) income to net cash
   provided by operating activities:
   Gain from sale of discontinued operations                          --       (1,058)
   Casualty loss                                                       5           --
   Depreciation                                                      456          590
   Loss on early extinguishment of debt                               --          332
   Amortization of loan costs                                         25           27
   Bad debt expense                                                   84          143
   Change in accounts:
      Receivables and deposits                                      (138)         (73)
      Other assets                                                    (1)         (38)
      Accounts payable                                               (55)          27
      Tenant security deposit liabilities                              4           (8)
      Due to affiliates                                              167           71
      Other liabilities                                               47          (56)
       Net cash provided by operating activities                     173          171

Cash flows from investing activities:
  Proceeds from sale of discontinued operations                       --        1,651
  Property improvements and replacements                            (487)        (258)
       Net cash (used in) provided by investing activities          (487)       1,393

Cash flows from financing activities:
  Repayment of mortgage note payable                                  --       (1,047)
  Payments on mortgage notes payable                                (208)        (216)
  Distributions to partners                                           --         (303)
  Advances from affiliate                                            553           70
  Payments on advances from affiliate                                 --         (104)
       Net cash provided by (used in) financing activities           345       (1,600)

Net increase (decrease) in cash and cash equivalents                  31          (36)
Cash and cash equivalents at beginning of period                      52           88

Cash and cash equivalents at end of period                        $ 83         $ 52
Supplemental disclosure of cash flow information:
  Cash paid for interest                                          $ 549        $ 637

        See Accompanying Notes to Consolidated Financial Statements
</TABLE>



<PAGE>

                       CONSOLIDATED CAPITAL PROPERTIES III

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2004

Note A - Organization and Summary of 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"),  a publicly traded real
estate investment trust. The Partnership Agreement provides that the Partnership
is to terminate on December 31, 2010 unless terminated prior to such date. As of
December 31, 2004, the Partnership owned two residential properties in Florida.

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.

Use of Estimates:  The  preparation of financial  statements in conformity  with
accounting   principles   generally  accepted  in  the  United  States  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  partners
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 partners.

Investment Properties:  Investment properties consist of two apartment complexes
and are  stated  at cost.  Acquisition  fees are  capitalized  as a cost of real
estate.  The  Partnership  capitalizes  all  expenditures in excess of $250 that
clearly relate to the acquisition and installation of real and personal property
components.  These  expenditures  include  costs  incurred  to replace  existing
property components, costs incurred to add a material new feature to a property,
and costs that  increase  the useful  life or  service  potential  of a property
component.  These  capitalized costs are depreciated over the useful life of the
asset.  Expenditures for ordinary  repairs,  maintenance and apartment  turnover
costs are  expensed as  incurred.  In  accordance  with  Statement  of Financial
Accounting  Standards  ("SFAS")  No.  144,  "Accounting  for the  Impairment  or
Disposal of Long-Lived  Assets," 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. No
adjustments  for  impairment of value were recorded in the years ended  December
31, 2004 or 2003.

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 for
real property over 19 years for additions  after May 8, 1985, and before 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 27.5 years and (2) personal property  additions over 5
years.

Cash and Cash Equivalents: Includes cash on hand and in banks. At certain times,
the amount of cash deposited at a bank may exceed the limit on insured deposits.
Cash  balances  include  approximately  $62,000 at  December  31,  2004 that are
maintained by an affiliated  management company on behalf of affiliated entities
in cash concentration accounts.

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  amounts of its  financial  instruments  (except for long term
debt)  approximate  their fair  values due to the short term  maturity  of these
instruments.  The Partnership  estimates the fair value of its long term debt by
discounting  future  cash flows  using a discount  rate  commensurate  with that
currently  believed to be available to the Partnership for similar terms,  fully
amortizing long-term debt. The fair value of the Partnership's long term debt at
the Partnership's incremental borrowing rate is approximately $7,807,000.

Deferred  Costs:  Loan  costs  of  approximately   $338,000,   less  accumulated
amortization  of  approximately  $90,000,  are  included in other assets and are
being  amortized  over the terms of the related  loan  agreements.  Amortization
expense,  which is included in interest expense, is expected to be approximately
$24,000 for both of the years 2005 and 2006,  $23,000 in 2007,  $22,000 in 2008,
and $21,000 in 2009.

Leasing   commissions  and  other  direct  costs  incurred  in  connection  with
successful  leasing  efforts are  deferred and  amortized  over the terms of the
related leases. Amortization of these costs is included in operating expenses.

Tenant  Security  Deposits:  The  Partnership  requires  security  deposits from
lessees for the duration of the lease.  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 will offer rental concessions during  particularly slow
months or in response to heavy  competition from other similar  complexes in the
area.  Rental  income  attributable  to  leases,  net  of  any  concessions,  is
recognized on a straight-line  basis over the term of the lease. The Partnership
evaluates all accounts  receivable  from residents and establishes an allowance,
after the application of security  deposits,  for accounts  greater than 30 days
past due on current tenants and all receivables due from former tenants.

Segment Reporting: SFAS No. 131, "Disclosure about Segments of an Enterprise and
Related  Information"  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.  SFAS No. 131 also established
standards for related disclosures about products and services, geographic areas,
and major  customers.  As defined in SFAS No. 131, the  Partnership has only one
reportable segment.

Advertising:  The  Partnership  expenses the costs of  advertising  as incurred.
Advertising  costs of  approximately  $124,000  and  $92,000 for the years ended
December 31, 2004 and 2003, respectively,  were charged to operating expense and
loss from discontinued operations as incurred.

Note B - Transactions with Affiliated Parties

The  Partnership  has no  employees  and depends on the General  Partner and its
affiliates for the management and administration of all Partnership  activities.
The Partnership  Agreement  provides for payments to affiliates for services and
reimbursement of certain expenses  incurred by affiliates of the General Partner
on behalf of the Partnership.

Affiliates of the General  Partner  receive 5% of gross receipts from all of the
Partnership's  properties  as  compensation  for providing  property  management
services.  The Partnership  paid to such affiliates  approximately  $122,000 and
$146,000 for the years ended December 31, 2004 and 2003, respectively, which are
included in operating expenses and loss from discontinued operations.

Affiliates of the General Partner charged the Partnership for  reimbursement  of
accountable  administrative  expenses  amounting to  approximately  $195,000 and
$237,000  for the years ended  December 31, 2004 and 2003,  respectively.  These
amounts  are  included  in  general  and  administrative  expenses,   investment
properties,  and gain from sale of discontinued operations. The portion of these
reimbursements   included  in  investment  properties  and  gain  from  sale  of
discontinued  operations for the years ended December 31, 2004 and 2003 are fees
related to  construction  management  services  provided by an  affiliate of the
General  Partner  of  approximately  $32,000  and  $18,000,   respectively.  The
construction  management  service fees are  calculated  based on a percentage of
current additions to investment properties.  At December 31, 2004, approximately
$228,000 of such fees were owed and are included in due to affiliates.

The 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.  During the years ended  December  31,  2004 and 2003,  no
special  management  fees  were  paid as no  distributions  from  cash flow from
operations were made.

During the year ended  December  31, 2004,  an affiliate of the General  Partner
advanced the Partnership  approximately  $553,000 to fund operations and capital
improvements at both of the  Partnership's  investment  properties.  Interest is
accrued at the prime rate plus 2% (7.25% at December 31, 2004). Interest expense
was approximately  $10,000 for the year ended December 31, 2004. During the year
ended  December 31,  2003,  an  affiliate  of the General  Partner  advanced the
Partnership   approximately  $70,000  to  fund  operations  at  Ventura  Landing
Apartments.  Interest  on the  advance  was  charged  at the prime rate plus 2%.
Interest expense for the year ended December 31, 2003 was approximately  $3,000.
During the year ended  December 31, 2003,  the  Partnership  repaid  advances of
approximately  $104,000 and the  associated  accrued  interest of  approximately
$3,000 from  proceeds  from the sale of West Chase  Apartments.  At December 31,
2004,  the  total  amount of  advances  and  accrued  interest  outstanding  was
approximately  $563,000  and is included  in due to  affiliates.  Subsequent  to
December 31, 2004, an affiliate of the General Partner  advanced the Partnership
approximately $112,000 to fund operating expenses at Ventura Landing Apartments.

The  Partnership  insures its properties up to certain  limits through  coverage
provided by AIMCO which is  generally  self-insured  for a portion of losses and
liabilities  related to workers  compensation,  property  casualty  and  vehicle
liability. The Partnership insures its properties above the AIMCO limits through
insurance policies obtained by AIMCO from insurers unaffiliated with the General
Partner.  During the years ended December 31, 2004 and 2003, the Partnership was
charged  by  AIMCO  and  its  affiliates   approximately  $32,000  and  $29,000,
respectively,  for  insurance  coverage and fees  associated  with policy claims
administration.

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 be required to return  this amount to the  Partnership.  It is not
presently expected that the limited partners will receive these returns when the
Partnership terminates.  Accordingly, no such commission was paid to the General
Partner related to the 2003 sale of West Chase Apartments.

In addition to its indirect  ownership of the general  partner  interests in the
Partnership,  AIMCO and its affiliates owned 83,941.50 limited partnership units
(the "Units") in the Partnership representing 52.93% of the outstanding Units at
December  31,  2004.  A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove  the  General  Partner.  As a result  of its  ownership  of 52.93% of the
outstanding  Units,  AIMCO and its  affiliates  are in a position to control all
voting decisions with respect to the  Partnership.  Although the General Partner
owes fiduciary duties to the limited  partners of the  Partnership,  the General
Partner  also  owes  fiduciary  duties  to AIMCO as its sole  stockholder.  As a
result,  the  duties  of  the  General  Partner,  as  general  partner,  to  the
Partnership  and its limited  partners may come into conflict with the duties of
the General Partner to AIMCO as its sole stockholder.

Note C - Disposition of Investment Property

On September 29, 2003,  the  Partnership  sold West Chase  Apartments to a third
party for a gross  sale  price of  approximately  $2,124,000.  The net  proceeds
realized by the  Partnership  were  approximately  $1,651,000  after  payment of
closing   costs  of   approximately   $174,000  and  a  prepayment   penalty  of
approximately  $299,000  owed by the  Partnership  and  paid by the  buyer.  The
Partnership  used  approximately  $1,047,000  of the net  proceeds  to repay the
mortgage  encumbering  the property.  As a result of the sale,  the  Partnership
realized a gain of approximately $1,058,000, which is included in gain from sale
of  discontinued  operations  on the  accompanying  consolidated  statements  of
operations.  The property's operations, a loss of approximately $506,000 for the
year ended December 31, 2003 is included in loss from  discontinued  operations.
Also included in loss from discontinued operations are revenues of approximately
$474,000  for the year ended  December 31, 2003.  In addition,  the  Partnership
recorded a loss on early extinguishment of debt of approximately $332,000 due to
the write off of unamortized loan costs and a prepayment penalty,  which is also
included in loss from discontinued  operations on the accompanying  consolidated
statements of operations.


<PAGE>




Note D - Mortgage Notes Payable

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

                             Principal   Monthly                          Principal
                            Balance At   Payment     Stated                Balance
                             December   Including   Interest  Maturity      Due At
                                31,
         Property              2004      Interest     Rate      Date       Maturity
                                (in thousands)                          (in thousands)

<S>                           <C>          <C>       <C>        <C>          <C>
Ventura Landing Apartments    $3,871       $ 34      7.54%      07/21        $ --
Village Green Apartments       3,284          29     7.54%      08/21           --
      Total                   $7,155       $ 63                              $ --
</TABLE>

The fixed rate 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, 2004 are as follows (in thousands):

                               2005               225
                               2006               242
                               2007               261
                               2008               281
                               2009               303
                            Thereafter          5,843
                                               $7,155

Note E - 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 (loss)  income and Federal
taxable loss (in thousands, except per unit data):

                                          2004          2003

Net (loss) income as reported          $  (421)      $   214
(Deduct) add: Deferred revenue and other
    liabilities                            (14)          (37)
Depreciation differences                   (21)           58
Prepayment penalty                          --          (299)
Gain on sale of property                    --          (592)
Other                                      (64)           99
Federal taxable loss                   $  (520)      $  (557)
Federal taxable loss per limited
  partnership unit                     $ (3.09)      $ (3.37)

The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets at December 31, 2004 (in thousands):

Net liabilities as reported                          $(5,657)
Differences in basis of assets and liabilities
   Investment properties at cost                       3,108
   Accumulated depreciation                             (806)
   Other assets and liabilities                          276
   Syndication costs                                   8,597

Net assets - Federal tax basis                       $ 5,518


<PAGE>




Note F - Investment Properties and Accumulated Depreciation



                                                   Initial Cost
                                                  To Partnership
                                                  (in thousands)
<TABLE>
<CAPTION>

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

<S>                              <C>           <C>         <C>             <C>
Ventura Landing Apartments       $ 3,871       $ 282       $ 3,754         $ 2,435
Village Green Apartments           3,284          125        2,375           1,327
           Totals                $ 7,155       $ 407       $ 6,129         $ 3,762
</TABLE>

<TABLE>
<CAPTION>

                          Gross Amount At Which Carried
                              At December 31, 2004
                                 (in thousands)
                                    Buildings
                                   And Related
                                    Personal              Accumulated    Date    Depreciable
      Description          Land     Property     Total    Depreciation Acquired     Life
                                                         (in thousands)
<S>                        <C>       <C>         <C>         <C>        <C>   <C>  <C>
Ventura Landing            $ 282     $ 6,189     $ 6,471     $ 5,300    10/07/81   5-30 yrs
Apartments
Village Green Apartments     125      3,702       3,827       2,822    12/20/91   3-30 yrs
         Totals           $ 407     $ 9,891     $10,298     $ 8,122
</TABLE>

Reconciliation of "investment properties and accumulated depreciation":

                                                Years Ended December 31,
                                                  2004            2003
                                                     (in thousands)
Investment Properties
Balance at beginning of year                    $ 9,844          $12,394
    Property improvements                           487              258
    Disposal of property                            (33)              --
    Sale of investment property                      --           (2,808)
Balance at end of year                          $10,298          $ 9,844

Accumulated Depreciation
Balance at beginning of year                    $ 7,694          $ 9,074
    Additions charged to expense                    456              590
    Disposal of property                            (28)              --
    Sale of investment property                      --           (1,970)
Balance at end of year                          $ 8,122          $ 7,694

The  aggregate  cost of the real  estate  for  Federal  income tax  purposes  at
December  31,  2004  and  2003 is  approximately  $13,406,000  and  $12,942,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at  December  31,  2004 and 2003 is  approximately  $8,928,000  and  $8,451,000,
respectively.

Note G - Casualty Events

In August 2004,  Ventura Landing  Apartments  experienced  damage from Hurricane
Charley.  As  of  December  31,  2004,  the  Partnership   estimates  damage  of
approximately  $210,000.  The  Partnership  does not expect a  casualty  loss to
result from the damage as the damaged assets were fully depreciated.

In September 2004, Ventura Landing Apartments  experienced damage from Hurricane
Frances.  As  of  December  31,  2004,  the  Partnership   estimates  damage  of
approximately $37,000. The Partnership does not expect a casualty loss to result
from the damage as the damaged assets were fully depreciated.

Note H - Contingencies

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. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the Partnership,  its General Partner and several of
their affiliated  partnerships and corporate  entities.  The action purported to
assert  claims on behalf of a class of  limited  partners  and  derivatively  on
behalf of a number of limited partnerships  (including the Partnership) that are
named as nominal defendants, challenging, among other things, the acquisition of
interests in certain General Partner entities by Insignia  Financial Group, Inc.
("Insignia") and entities that were, at one time,  affiliates of Insignia;  past
tender offers by the Insignia  affiliates to acquire limited  partnership units;
management of the  partnerships  by the Insignia  affiliates;  and the series of
transactions  which  closed on October 1, 1998 and  February  26,  1999  whereby
Insignia and Insignia  Properties Trust,  respectively,  were merged into AIMCO.
The plaintiffs sought monetary damages and equitable relief,  including judicial
dissolution of the Partnership. In addition, during the third quarter of 2001, a
complaint captioned Heller v. Insignia Financial Group (the "Heller action") was
filed against the same  defendants  that are named in the Nuanes  action.  On or
about August 6, 2001, the plaintiffs filed a first amended complaint. The Heller
action was brought as a purported  derivative  action,  and asserted claims for,
among other things,  breach of fiduciary duty, unfair  competition,  conversion,
unjust enrichment, and judicial dissolution.

On January 8, 2003,  the parties filed a  Stipulation  of Settlement in proposed
settlement of the Nuanes action and the Heller action.

In general  terms,  the  proposed  settlement  provides  for  certification  for
settlement  purposes of a settlement class consisting of all limited partners in
this  Partnership and others (the  "Partnerships")  as of December 20, 2002, the
dismissal  with  prejudice  and  release  of claims  in the  Nuanes  and  Heller
litigation,  payment by AIMCO of $9.9  million  (which shall be  distributed  to
settlement  class  members  after  deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent  appraisals of the  Partnerships'  properties  by a court  appointed
appraiser.  An affiliate of the General Partner has also agreed to make at least
one round of tender offers to purchase all of the  partnership  interests in the
Partnerships within one year of final approval, if it is granted, and to provide
partners  with the  independent  appraisals  at the time of these  tenders.  The
proposed  settlement  also provided for the  limitation  of the allowable  costs
which the General  Partner or its  affiliates  will charge the  Partnerships  in
connection with this litigation and imposes limits on the class counsel fees and
costs in this litigation.  On April 11, 2003,  notice was distributed to limited
partners providing the details of the proposed settlement.

On June 13, 2003, the court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.  On August 12, 2003, an objector
("Objector") filed an appeal (the "Appeal") seeking to vacate and/or reverse the
order approving the settlement and entering  judgment  thereto.  On November 24,
2003,  the Objector  filed an  application  requesting  the court order AIMCO to
withdraw settlement tender offers it had commenced,  refrain from making further
offers  pending  the appeal and auction  any units  tendered  to third  parties,
contending  that the offers did not  conform  with the terms of the  settlement.
Counsel  for the  Objector  (on behalf of another  investor)  had  alternatively
requested the court take certain action  purportedly to enforce the terms of the
settlement agreement. On December 18, 2003, the court heard oral argument on the
motions  and denied them both in their  entirety.  The  Objector  filed a second
appeal challenging the court's use of a referee and its order requiring Objector
to pay those fees.

On January 28, 2004,  the  Objector  filed his opening  brief in the Appeal.  On
April 23, 2004, the General Partner and its affiliates filed a response brief in
support of the settlement  and the judgment  thereto.  The plaintiffs  have also
filed a brief in support of the  settlement.  On June 4, 2004,  Objector filed a
reply to the briefs submitted by the General Partner and Plaintiffs. In addition
both the Objector and  plaintiffs  filed  briefs in  connection  with the second
appeal.  On March 21, 2005, the Court of Appeals issued opinions in both pending
appeals.  With regard to the settlement and judgment entered thereto,  the Court
of Appeals  vacated the trial  court's order and remanded to the trial court for
further  findings on the basis that the "state of the record is  insufficient to
permit meaningful appellate review". With regard to the second appeal, the Court
of Appeals reversed the order requiring the Objector to pay referee fees.

The  General  Partner  does not  anticipate  that any costs to the  Partnership,
whether legal or settlement costs,  associated with these cases will be material
to the Partnership's overall operations.

As previously disclosed,  AIMCO Properties L.P. and NHP Management Company, both
affiliates  of the General  Partner,  are  defendants in an action in the United
States  District Court,  District of Columbia.  The plaintiffs have styled their
complaint as a collective action under the Fair Labor Standards Act ("FLSA") and
seek to certify state  subclasses in California,  Maryland,  and the District of
Columbia. Specifically, the plaintiffs contend that AIMCO Properties L.P. failed
to  compensate  maintenance  workers  for time  that they  were  required  to be
"on-call."  Additionally,  plaintiffs  allege AIMCO  Properties  L.P.  failed to
comply  with the FLSA in  compensating  maintenance  workers  for time that they
worked in responding to a call while  "on-call."  The  defendants  have filed an
answer to the amended complaint denying the substantive  allegations.  Discovery
relating  to the  certification  of the  collective  action  has  concluded  and
briefing on the matter is underway.  Although the outcome of any  litigation  is
uncertain,  AIMCO  Properties,  L.P. does not believe that the ultimate  outcome
will have a material  adverse  effect on its  financial  condition or results of
operations.  Similarly,  the General  Partner does not believe that the ultimate
outcome will have a material  adverse effect on the  Partnership's  consolidated
financial condition or results of operations.

The  Partnership  is unaware  of any other  pending  or  outstanding  litigation
matters  involving  it or its  investment  properties  that are not of a routine
nature arising in the ordinary course of business.

Environmental

Various  Federal,  state and local laws subject  property owners or operators to
liability for management,  and the costs of removal or  remediation,  of certain
hazardous  substances  present on a property.  Such laws often impose  liability
without regard to whether the owner or operator knew of, or was responsible for,
the release or presence of the  hazardous  substances.  The  presence of, or the
failure to manage or remedy properly,  hazardous substances may adversely affect
occupancy at affected  apartment  communities and the ability to sell or finance
affected properties.  In addition to the costs associated with investigation and
remediation  actions brought by government  agencies,  the presence of hazardous
substances  on a  property  could  result in claims by  private  plaintiffs  for
personal injury,  disease,  disability or other  infirmities.  Various laws also
impose  liability for the cost of removal,  remediation or disposal of hazardous
substances  through a  licensed  disposal  or  treatment  facility.  Anyone  who
arranges for the disposal or treatment of hazardous  substances  is  potentially
liable  under such laws.  These laws often impose  liability  whether or not the
person arranging for the disposal ever owned or operated the disposal  facility.
In  connection  with  the  ownership  and  operation  of  its  properties,   the
Partnership could  potentially be liable for environmental  liabilities or costs
associated with its properties.

Mold

The Partnership is aware of lawsuits  against owners and managers of multifamily
properties asserting claims of personal injury and property damage caused by the
presence of mold, some of which have resulted in substantial  monetary judgments
or settlements. The Partnership has only limited insurance coverage for property
damage loss claims  arising from the  presence of mold and for  personal  injury
claims  related  to  mold  exposure.  Affiliates  of the  General  Partner  have
implemented a national  policy and  procedures to prevent or eliminate mold from
its  properties  and the  General  Partner  believes  that these  measures  will
eliminate,  or at least minimize, the effects that mold could have on residents.
To date,  the  Partnership  has not incurred any material  costs or  liabilities
relating to claims of mold exposure or to abate mold conditions. Because the law
regarding  mold is unsettled and subject to change the General  Partner can make
no assurance that liabilities resulting from the presence of or exposure to mold
will  not have a  material  adverse  effect  on the  Partnership's  consolidated
financial condition or results of operations.

SEC Investigation

As  previously  disclosed,  the  Central  Regional  Office of the United  States
Securities  and  Exchange   Commission   (the  "SEC")  is  conducting  a  formal
investigation relating to certain matters.  Although the staff of the SEC is not
limited  in the  areas  that it may  investigate,  AIMCO  believes  the areas of
investigation include AIMCO's miscalculated monthly net rental income figures in
third quarter 2003,  forecasted  guidance,  accounts payable,  rent concessions,
vendor  rebates,  capitalization  of payroll and certain  other  costs,  and tax
credit  transactions.  AIMCO is cooperating  fully. AIMCO is not able to predict
when the matter  will be  resolved.  AIMCO does not  believe  that the  ultimate
outcome  will  have a  material  adverse  effect on its  consolidated  financial
condition  or results of  operations.  Similarly,  the General  Partner does not
believe that the ultimate  outcome  will have a material  adverse  effect on the
Partnership's consolidated financial condition or results of operations.


<PAGE>




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

            None.

Item 8A.    Controls and Procedures

(a) Disclosure Controls and Procedures.  The Partnership's management,  with the
participation of the principal executive officer and principal financial officer
of the General Partner,  who are the equivalent of the  Partnership's  principal
executive officer and principal financial officer,  respectively,  has evaluated
the  effectiveness of the Partnership's  disclosure  controls and procedures (as
such term is defined  in Rules  13a-15(e)  and  15d-15(e)  under the  Securities
Exchange  Act of 1934,  as amended  (the  "Exchange  Act")) as of the end of the
period covered by this report. Based on such evaluation, the principal executive
officer and  principal  financial  officer of the General  Partner,  who are the
equivalent  of the  Partnership's  principal  executive  officer  and  principal
financial  officer,  respectively,  have  concluded  that, as of the end of such
period, the Partnership's disclosure controls and procedures are effective.

(b) Internal Control Over Financial  Reporting.  There have not been any changes
in the Partnership's  internal control over financial reporting (as such term is
defined in Rules  13a-15(f)  and  15d-15(f)  under the Exchange  Act) during the
fourth quarter of 2004 that have materially  affected,  or are reasonably likely
to  materially  affect,  the  Partnership's   internal  control  over  financial
reporting.

Item 8B.    Other Information

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

Martha L. Long                   45   Director and Senior Vice President
Harry G. Alcock                  42   Director and Executive Vice President
Miles Cortez                     61   Executive Vice President, General Counsel
                                      and Secretary
Patti K. Fielding                41   Executive Vice President
Paul J. McAuliffe                48   Executive Vice President and Chief
                                      Financial Officer
Thomas M. Herzog                 42   Senior Vice President and Chief Accounting
                                     Officer
Stephen B. Waters                43   Vice President

Martha L. Long has been a Director  and Senior  Vice  President  of the  General
Partner since February 2004. Ms. Long has been with AIMCO since October 1998 and
has served in various  capacities.  From 1998 to 2001, Ms. Long served as Senior
Vice President and Controller of AIMCO and the General Partner.  During 2002 and
2003,  Ms. Long served as Senior Vice  President of Continuous  Improvement  for
AIMCO.

Harry G. Alcock was  appointed  as a Director of the General  Partner in October
2004 and was  appointed  Executive  Vice  President  of the  General  Partner in
February 2004 and has been Executive Vice President and Chief Investment Officer
of AIMCO since October  1999.  Prior to October 1999 Mr. Alcock served as a Vice
President  of AIMCO  from July 1996 to October  1997,  when he was  promoted  to
Senior Vice  President-Acquisitions  where he served  until  October  1999.  Mr.
Alcock has had responsibility for acquisition and financing  activities of AIMCO
since July 1994.

Miles  Cortez was  appointed  Executive  Vice  President,  General  Counsel  and
Secretary of the General  Partner in February  2004 and of AIMCO in August 2001.
Prior to joining  AIMCO,  Mr. Cortez was the senior  partner of Cortez  Macaulay
Bernhardt  &  Schuetze  LLC,  a Denver  law firm,  from  December  1997  through
September 2001.

Patti K. Fielding was appointed  Executive  Vice President - Securities and Debt
of the General  Partner in  February  2004 and of AIMCO in  February  2003.  Ms.
Fielding was  appointed  Treasurer  of AIMCO in January  2005.  Ms.  Fielding is
responsible  for  debt  financing  and the  treasury  department.  Ms.  Fielding
previously  served as Senior Vice  President - Securities and Debt of AIMCO from
January 2000 to February 2003. Ms.  Fielding  joined AIMCO in February 1997 as a
Vice President.

Paul J. McAuliffe has been Executive Vice President and Chief Financial  Officer
of the General  Partner since April 2002. Mr.  McAuliffe has served as Executive
Vice  President of AIMCO since February 1999 and was appointed  Chief  Financial
Officer  of AIMCO in October  1999.  From May 1996  until he joined  AIMCO,  Mr.
McAuliffe was Senior Managing Director of Secured Capital Corp.

Thomas M.  Herzog was  appointed  Senior  Vice  President  and Chief  Accounting
Officer of the General  Partner in February  2004 and of AIMCO in January  2004.
Prior to  joining  AIMCO in January  2004,  Mr.  Herzog  was at GE Real  Estate,
serving  as Chief  Accounting  Officer & Global  Controller  from  April 2002 to
January 2004 and as Chief Technical Advisor from March 2000 to April 2002. Prior
to joining GE Real  Estate,  Mr.  Herzog was at  Deloitte & Touche LLP from 1990
until 2000.

Stephen B. Waters was appointed Vice  President of the General  Partner in April
2004. Mr. Waters previously served as a Director of Real Estate Accounting since
joining AIMCO in September 1999. Mr. Waters has responsibilities for real estate
and partnership accounting with AIMCO.

One or more of the above persons are also directors and/or officers of a general
partner (or general partner of a general partner) of limited  partnerships which
either have a class of  securities  registered  pursuant to Section 12(g) of the
Securities Exchange Act of 1934, or are subject to the reporting requirements of
Section  15(d) of such Act.  Further,  one or more of the above persons are also
directors and/or officers of Apartment Investment and Management Company and the
general  partner  of  AIMCO  Properties,  L.P.,  entities  that  have a class of
securities  registered  pursuant to Section 12(g) of the Securities Exchange Act
of 1934, or are subject to the reporting  requirements of Section 15 (d) of such
Act.

The board of  directors of the General  Partner  does not have a separate  audit
committee.  As such, the board of directors of the General Partner  fulfills the
functions of an audit  committee.  The board of directors  has  determined  that
Martha L. Long meets the requirement of an "audit committee financial expert".

The  directors  and  officers of the General  Partner  with  authority  over the
Partnership are all employees of subsidiaries of AIMCO. AIMCO has adopted a code
of ethics that applies to such  directors and officers that is posted on AIMCO's
website  (www.AIMCO.com).  AIMCO's  website is not  incorporated by reference to
this filing.

Item 10.    Executive Compensation

Neither the  directors  nor the  officers of the General  Partner  received  any
remuneration from the Registrant.

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, 2004.

              Entity                      Number of Units             Percentage

Cooper River Properties, LLC
  (an affiliate of AIMCO)                    17,056.00                  10.76%
AIMCO IPLP, L.P.
  (an affiliate of AIMCO)                    39,831.50                  25.12%
AIMCO Properties, L.P.
  (an affiliate of AIMCO)                    27,054.00                  17.05%

Cooper River  Properties LLC and AIMCO IPLP,  L.P. are  indirectly  ultimately
owned by AIMCO. Their business address is 55 Beattie Place, Greenville,  South
Carolina 29602.

AIMCO Properties,  L.P. is indirectly  ultimately  controlled by AIMCO and its
business address is 4582 S. Ulster St. Parkway,  Suite 1100, Denver,  Colorado
80237.

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

Item 12.    Certain Relationships and Related Transactions

The  Partnership  has no  employees  and depends on the General  Partner and its
affiliates for the management and administration of all Partnership  activities.
The Partnership  Agreement  provides for payments to affiliates for services and
reimbursement of certain expenses  incurred by affiliates of the General Partner
on behalf of the Partnership.

Affiliates of the General  Partner  receive 5% of gross receipts from all of the
Partnership's  properties  as  compensation  for providing  property  management
services.  The Partnership  paid to such affiliates  approximately  $122,000 and
$146,000 for the years ended December 31, 2004 and 2003, respectively, which are
included in operating expenses and loss from discontinued operations included in
"Item 7. Financial Statements".

Affiliates of the General Partner charged the Partnership for  reimbursement  of
accountable  administrative  expenses  amounting to  approximately  $195,000 and
$237,000  for the years ended  December 31, 2004 and 2003,  respectively.  These
amounts  are  included  in  general  and  administrative  expenses,   investment
properties,  and gain from sale of discontinued  operations on the  consolidated
financial statements included in "Item 7. Financial Statements".  The portion of
these  reimbursements  included in investment  properties  and gain from sale of
discontinued  operations for the years ended December 31, 2004 and 2003 are fees
related to  construction  management  services  provided by an  affiliate of the
General  Partner  of  approximately  $32,000  and  $18,000,   respectively.  The
construction  management  service fees are  calculated  based on a percentage of
current additions to investment properties.  At December 31, 2004, approximately
$228,000  of such fees were owed and are  included in due to  affiliates  on the
consolidated balance sheet included in "Item 7. Financial Statements".

The 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.  During the years ended  December  31,  2004 and 2003,  no
special  management  fees  were  paid as no  distributions  from  cash flow from
operations were made.

During the year ended  December  31, 2004,  an affiliate of the General  Partner
advanced the Partnership  approximately  $553,000 to fund operations and capital
improvements at both of the  Partnership's  investment  properties.  Interest is
accrued at the prime rate plus 2% (7.25% at December 31, 2004). Interest expense
was approximately  $10,000 for the year ended December 31, 2004. During the year
ended  December 31,  2003,  an  affiliate  of the General  Partner  advanced the
Partnership   approximately  $70,000  to  fund  operations  at  Ventura  Landing
Apartments.  Interest  on the  advance  was  charged  at the prime rate plus 2%.
Interest expense for the year ended December 31, 2003 was approximately  $3,000.
During the year ended  December 31, 2003,  the  Partnership  repaid  advances of
approximately  $104,000 and the  associated  accrued  interest of  approximately
$3,000 from  proceeds  from the sale of West Chase  Apartments.  At December 31,
2004,  the  total  amount of  advances  and  accrued  interest  outstanding  was
approximately  $563,000 and is included in due to affiliates on the consolidated
balance sheet included in "Item 7. Financial Statements". Subsequent to December
31,  2004,  an  affiliate  of  the  General  Partner  advanced  the  Partnership
approximately $112,000 to fund operating expenses at Ventura Landing Apartments.

The  Partnership  insures its properties up to certain  limits through  coverage
provided by AIMCO which is  generally  self-insured  for a portion of losses and
liabilities  related to workers  compensation,  property  casualty  and  vehicle
liability. The Partnership insures its properties above the AIMCO limits through
insurance policies obtained by AIMCO from insurers unaffiliated with the General
Partner.  During the years ended December 31, 2004 and 2003, the Partnership was
charged  by  AIMCO  and  its  affiliates   approximately  $32,000  and  $29,000,
respectively,  for  insurance  coverage and fees  associated  with policy claims
administration.

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 be required to return  this amount to the  Partnership.  It is not
presently expected that the limited partners will receive these returns when the
Partnership terminates.  Accordingly, no such commission was paid to the General
Partner related to the 2003 sale of West Chase Apartments.

In addition to its indirect  ownership of the general  partner  interests in the
Partnership,  AIMCO and its affiliates owned 83,941.50 limited partnership units
(the "Units") in the Partnership representing 52.93% of the outstanding Units at
December  31,  2004.  A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove  the  General  Partner.  As a result  of its  ownership  of 52.93% of the
outstanding  Units,  AIMCO and its  affiliates  are in a position to control all
voting decisions with respect to the  Partnership.  Although the General Partner
owes fiduciary duties to the limited  partners of the  Partnership,  the General
Partner  also  owes  fiduciary  duties  to AIMCO as its sole  stockholder.  As a
result,  the  duties  of  the  General  Partner,  as  general  partner,  to  the
Partnership  and its limited  partners may come into conflict with the duties of
the General Partner to AIMCO as its sole stockholder.

Item 13.    Exhibits

            See Exhibit Index.

Item 14.    Principal Accountant Fees and Services

The General Partner has reappointed Ernst & Young LLP as independent auditors to
audit the financial  statements of the  Partnership for 2005. The aggregate fees
billed  for  services  rendered  by Ernst & Young LLP  during  the  years  ended
December 31, 2004 and 2003 are described below.

Audit Fees. Fees for audit services  totaled  approximately  $32,000 and $47,000
for 2004 and 2003,  respectively.  Fees for audit services also include fees for
the reviews of the Partnership's quarterly reports on Form 10-QSB.

Tax Fees. Fees for tax services  totaled  approximately  $13,000 and $16,000 for
2004 and 2003, respectively.


<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.
                                          General Partner


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


                                    By:   /s/Stephen B. Waters
                                          Stephen B. Waters
                                          Vice President


                                    Date: March 30, 2005


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/Harry G. Alcock            Director and Executive     Date:  March 30, 2005
Harry G. Alcock               Vice President

/s/Martha L. Long             Director and Senior Vice   Date:  March 30, 2005
Martha L. Long                President

/s/Stephen B. Waters          Vice President             Date:  March 30, 2005
Stephen B. Waters


<PAGE>



                        CONSOLIDATED CAPITAL PARTNERS III

                                  EXHIBIT INDEX

Exhibit Number

      3.1         Certificate  of  Limited  Partnership,   as  amended  to  date
                  (Exhibit 3 to the Registrant's  Annual Report on Form 10-K for
                  the year ended  December 31, 1991, is  incorporated  herein by
                  reference).

      3.2         Partnership  Agreement  dated May 22, 1980 is  incorporated by
                  reference to Exhibit A to the  Prospectus of the  Registration
                  dated August 17, 1981 as filed with the Commission pursuant to
                  Rule 424(b) under the Act.

      10.51       Multifamily  Note dated  June 27,  2001  between  Consolidated
                  Capital Properties III, a California limited partnership,  and
                  GMAC  Commercial   Mortgage   Corporation.   (Incorporated  by
                  reference  to the  Quarterly  Report  on Form  10-QSB  for the
                  quarter ended June 30, 2001).

      10.52       Multifamily  Note dated July 23, 2001 between  ConCap  Village
                  Green Associates,  Ltd., a Texas limited partnership, and GMAC
                  Commercial Mortgage Corporation. (Incorporated by reference to
                  the Quarterly Report on Form 10-QSB for the quarter ended June
                  30, 2001).

      10.53       Purchase  and  Sale  Contract  between   Consolidated  Capital
                  Properties  III and West Chase  Apartments,  LLC, dated August
                  13, 2003  (incorporated  by reference to the Current Report on
                  Form 8-K dated September 29, 2003).

      31.1        Certification  of  equivalent  of  Chief  Executive  Officer
                  pursuant     to     Securities     Exchange     Act    Rules
                  13a-14(a)/15d-14(a),  as Adopted  Pursuant to Section 302 of
                  the Sarbanes-Oxley Act of 2002.

      31.2        Certification  of  equivalent  of  Chief  Financial  Officer
                  pursuant     to     Securities     Exchange     Act    Rules
                  13a-14(a)/15d-14(a),  as Adopted  Pursuant to Section 302 of
                  the Sarbanes-Oxley Act of 2002.

      32.1        Certification   Pursuant  to  18  U.S.C.  Section  1350,  as
                  Adopted  Pursuant to Section 906 of the  Sarbanes-Oxley  Act
                  of 2002.



<PAGE>



Exhibit 31.1


                                  CERTIFICATION


I, Martha L. Long, certify that:


1.    I have reviewed this annual report on Form 10-KSB of Consolidated  Capital
      Properties III;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the small  business  issuer as of, and for, the periods  presented in this
      report;

4.    The  small  business  issuer's  other  certifying  officer(s)  and  I  are
      responsible  for  establishing  and  maintaining  disclosure  controls and
      procedures (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for
      the small business issuer and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            small business issuer, including its consolidated  subsidiaries,  is
            made  known to us by  others  within  those  entities,  particularly
            during the period in which this report is being prepared;

      (b)   Evaluated  the   effectiveness   of  the  small  business   issuer's
            disclosure  controls and procedures and presented in this report our
            conclusions about the  effectiveness of the disclosure  controls and
            procedures, as of the end of the period covered by this report based
            on such evaluation; and

      (c)   Disclosed in this report any change in the small  business  issuer's
            internal  control over financial  reporting that occurred during the
            small  business  issuer's  most  recent  fiscal  quarter  (the small
            business  issuer's  fourth  fiscal  quarter in the case of an annual
            report) that has  materially  affected,  or is reasonably  likely to
            materially affect, the small business issuer's internal control over
            financial reporting; and

 5.   The  small  business  issuer's  other  certifying  officer(s)  and I  have
      disclosed,  based on our most recent  evaluation of internal  control over
      financial reporting, to the small business issuer's auditors and the audit
      committee of the small  business  issuer's  board of directors (or persons
      performing the equivalent functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely  affect the small business  issuer's
            ability  to  record,   process,   summarize  and  report   financial
            information; and


      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees who have a significant  role in the small  business
            issuer's internal control over financial reporting.

Date: March 30, 2005
                                    /s/Martha L. Long
                                    Martha L. Long
                                    Senior Vice President of ConCap Equities,
                                    Inc., equivalent of the chief executive
                                    officer of the Partnership


<PAGE>



Exhibit 31.2


                                  CERTIFICATION


I, Stephen B. Waters, certify that:


1.    I have reviewed this annual report on Form 10-KSB of Consolidated  Capital
      Properties III;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the small  business  issuer as of, and for, the periods  presented in this
      report;

4.    The  small  business  issuer's  other  certifying  officer(s)  and  I  are
      responsible  for  establishing  and  maintaining  disclosure  controls and
      procedures (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for
      the small business issuer and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            small business issuer, including its consolidated  subsidiaries,  is
            made  known to us by  others  within  those  entities,  particularly
            during the period in which this report is being prepared;

      (b)   Evaluated  the   effectiveness   of  the  small  business   issuer's
            disclosure  controls and procedures and presented in this report our
            conclusions about the  effectiveness of the disclosure  controls and
            procedures, as of the end of the period covered by this report based
            on such evaluation; and

      (c)   Disclosed in this report any change in the small  business  issuer's
            internal  control over financial  reporting that occurred during the
            small  business  issuer's  most  recent  fiscal  quarter  (the small
            business  issuer's  fourth  fiscal  quarter in the case of an annual
            report) that has  materially  affected,  or is reasonably  likely to
            materially affect, the small business issuer's internal control over
            financial reporting; and

5.    The  small  business  issuer's  other  certifying  officer(s)  and I  have
      disclosed,  based on our most recent  evaluation of internal  control over
      financial reporting, to the small business issuer's auditors and the audit
      committee of the small  business  issuer's  board of directors (or persons
      performing the equivalent functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely  affect the small business  issuer's
            ability  to  record,   process,   summarize  and  report   financial
            information; and

(b)   Any fraud,  whether or not  material,  that  involves  management or other
      employees  who have a  significant  role in the  small  business  issuer's
      internal control over financial reporting.
Date: March 30, 2005
                                    /s/Stephen B. Waters
                                    Stephen B. Waters
                                    Vice     President    of    ConCap
                                    Equities,   Inc.,   equivalent  of
                                    the  chief  financial  officer  of
                                    the Partnership


<PAGE>


Exhibit 32.1


                          Certification of CEO and CFO
                       Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                Section 906 of the Sarbanes-Oxley Act of 2002



In  connection  with the Annual  Report on Form 10-KSB of  Consolidated  Capital
Properties  III (the  "Partnership"),  for the year ended  December  31, 2004 as
filed with the  Securities  and  Exchange  Commission  on the date  hereof  (the
"Report"),  Martha L. Long, as the equivalent of the chief executive  officer of
the Partnership, and Stephen B. Waters, as the equivalent of the chief financial
officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section
1350,  as adopted  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of 2002,
that, to the best of his knowledge:

      (1)   The Report fully complies with the  requirements of Section 13(a) or
            15(d) of the Securities Exchange Act of 1934; and

      (2)   The  information  contained in the Report  fairly  presents,  in all
            material respects, the financial condition and results of operations
            of the Partnership.


                                           /s/Martha L. Long
                                    Name:  Martha L. Long
                                    Date:  March 30, 2005


                                           /s/Stephen B. Waters
                                    Name:  Stephen B. Waters
                                    Date:  March 30, 2005


This  certification is furnished with this Report pursuant to Section 906 of the
Sarbanes-Oxley  Act of 2002 and shall not be deemed filed by the Partnership for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.