UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC  20549
                                
                            FORM 10-Q
                                
        Quarterly Report Under Section 13 or 15(d) of the
                 Securities Exchange Act of 1934
                                
                                
              For Quarter Ended September 30, 1996
                                
                Commission File Number:  0-13559
                                
                                
                             LDP-III
     (Exact name of registrant as specified in its governing
                          instruments)
                                

     California                                94-2911983
(State or other jurisdiction of             (I.R.S. Employer
incorporation or organization)           Identification Number)


               P. O. Box 130, Carbondale, CO 81623
            (Address of principal executive offices)
                                
                                
                         (970) 963-8007
      (Registrant's telephone number, including area code)
                                
                                
Indicate  by check mark whether the registrant (1) has filed  all
reports  required  to be filed by Sections 13  or  15(d)  of  the
Securities  Exchange Act of 1934 during the preceding  12  months
(or  for such shorter period that the registrant was required  to
file  such  reports),  and (2) has been subject  to  such  filing
requirements for the past 90 days.

                           Yes  [ X ]   No  [   ]
<PAGE>
<TABLE>
                 PART I.    FINANCIAL INFORMATION

                 ITEM 1.    FINANCIAL STATEMENTS

                             LDP-III
                                
     BALANCE SHEET, SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
                           (Unaudited)
                          (In thousands)

<CAPTION>
                                          September 30, December 31,
                                                1996      1995
<S>                                           <C>       <C>
INVESTMENTS IN REAL ESTATE:
Rental properties                             $10,505    $12,306
Accumulated depreciation                       (4,040)    (4,264)
Rental properties - net                         6,465      8,042

CASH AND CASH EQUIVALENTS (including interest bearing
 deposits of $545 in 1996 and $104 in 1995)       550        212

OTHER ASSETS:
Short term investment                          $  397        198
Accounts receivable                                51         24
Prepaid expenses and deposits                       9          8
Deferred loan costs and leasing commissions
 (net of accumulated amortization of $542
 in 1996 and $536 in 1995)                        128        152
Total other assets                                585        382

TOTAL                                          $7,600    $ 8,636

LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Notes payable                                  $6,902    $ 7,871
Accounts payable                                    5          5
Other liabilities                                  93         81
Total liabilities                               7,000      7,957

PARTNERS' EQUITY                                  600        679

TOTAL                                          $7,600    $ 8,636

<FN>
See Financial Notes.

</TABLE>
<PAGE>
<TABLE>
                               LDP-III
                                  
                      STATEMENTS OF OPERATIONS
                             (Unaudited)
               (In thousands except per share amounts)

<CAPTION>
                                 Three Months Ended    Nine Months Ended
                                    September 30          September 30
                                   1996      1995        1996      1995
<S>                               <C>       <C>         <C>      <C>
REVENUE:
Rental                            $ 317     $ 242       $ 970    $  880
Interest                              6         7          15        25
Total revenue                       323       249         985       905


EXPENSE:
Interest                            167       185         518       555
Operating                           104        49         340       282
Depreciation and amortization        75        96         276       307
General and administrative           60        41         153       144
Total expense                       406       371       1,287     1,288

LOSS BEFORE GAIN FROM SALE
 OF REAL PROPERTY                   (83)     (122)       (302)     (383)

GAIN FROM SALE OF
 REAL PROPERTY                      223         0         223         0

NET INCOME (LOSS)                   140      (122)        (79)     (383)

NET GAIN (LOSS) PER
 PARTNERSHIP UNIT                 $   4     $  (3)      $  (2)   $  (10)

<FN>
See Financial Notes.

</TABLE>
<PAGE>
<TABLE>
                                 LDP-III
                                    
                STATEMENTS OF CHANGES IN PARTNERS' EQUITY
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
                  AND THE YEAR ENDED DECEMBER 31, 1995
                               (Unaudited)
                   (In thousands except unit amounts)
<CAPTION>
                              LIMITED PARTNERS
                                 NUMBER OF              GENERAL   TOTAL
                                PARTNERSHIP             PARTNER   PARTNERS'
                                   UNITS      AMOUNT    AMOUNT    AMOUNT
EQUITY
<S>                                <C>        <C>        <C>      <C>
BALANCE,  JANUARY  1,  1995        37,141     $1,013       0      $ 1,013
Net Loss - 1995                                 (334)                (334)
Abandonments - 1995                    (5)

BALANCE,   DECEMBER  31,  1995     37,136        679       0          679
Net loss                                         (79)                 (79)

BALANCE, SEPTEMBER 30, 1996        37,136     $  600     $ 0      $   600

<FN>
See Financial Notes.

</TABLE>
<PAGE>
<TABLE>
                             LDP-III
                                
                    STATEMENTS OF CASH FLOWS
      FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                           (Unaudited)
                         (In thousands)
<CAPTION>
                                                  1996        1995
<S>                                             <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss)                               $ (280)     $ (383)
Adjustments to reconcile net loss to net cash
 provided (used) by operating activities:
Depreciation and amortization                      276         265

Change in operating assets and liabilities:
Increase (decrease) in other liabilities            12          52
Decrease (increase) in accounts receivable         (27)         39
Decrease (increase) in prepaid expenses 
 and deposit                                        (1)         (2)
Decrease in accounts payable                         0         (35)
 Net cash used by operating activities             (20)        (64)

CASH FLOWS FROM INVESTING ACTIVITIES:
Net proceeds from sale of rental property          660           0
Capital expenditures                               (46)       (109)
Increase in deferred expenses                      (38)        (22)
 Net cash provided (used) in investing activities  576        (131)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on notes payable                          (19)       (266)
 Net cash provided (used) by financing activities  (19)       (266)

Increase (decrease) in cash and cash equivalents   537        (461)

Cash and cash equivalents at beginning of period   410         859

Cash and cash equivalents at end of period       $ 947     $   398

<FN>
See Financial Notes.

</TABLE>
<PAGE>

                             LDP-III
                         FINANCIAL NOTES
                         (In Thousands)

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
     The   accompanying   unaudited  financial   statements   should   be
     read   in   conjunction   with   the   Partnership's   1995   Annual
     Report.    These   statements  have  been  prepared  in   accordance
     with    the    instructions   to   the   Securities   and   Exchange
     Commission   Form   10-Q   and   do   not   include   all   of   the
     information   and   footnotes   required   by   generally   accepted
     accounting principles for complete financial statements.

     In   the   opinion   of   the  general  partner,   all   adjustments
     (consisting    of    normal    recurring    accruals)     considered
     necessary   for  a  fair  presentation  have  been  included.    The
     results   of   operations  for  the  nine  months  ended   September
     30,   1996  and  1995,  are  not  necessarily  indicative   of   the
     results   that  may  be  expected  for  the  year  ending   December
     31, 1996.

     For  purposes  of  the  statement of  cash  flows,  the  Partnership
     considers   all  highly  liquid  investments  with  a  maturity   of
     three  months  or  less  from  the  date  of  purchase  to  be  cash
     equivalents.   The  Partnership  paid  interest  of  $518  and  $555
     for   the   nine  months  ended  September  30,  1996,   and   1995,
     respectively.

<PAGE>

ITEM 2.   MANAGEMENT'S    DISCUSSION   AND    ANALYSIS    OF    FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

LDP-III   is   a   California  limited  partnership  formed   in   August
1983.   The  Partnership's  business consists  of  a  single  segment  --
equity investments in leveraged income-producing real estate.

At   September  30,  1996,  the  Partnership's  portfolio  consisted   of
fee   title  ownership  of  two  properties  located  in  two  geographic
areas.    The   Partnership's   property  investments   are:    Jefferson
Place   Office   Building,   Boise,  Idaho  and   1201   Cadillac   Court
Building, Milpitas, California.

LIQUIDITY AND CAPITAL RESOURCES

As   of   September  30,  1996,  the  Partnership  had  a  cash   balance
totaling   approximately  $550,000.   Cash  reserves   not   needed   for
current   operations  are  placed  in  temporary  high-grade  investments
which can be readily liquidated.

The   Partnership   has   invested  $397,000  in   short-term   federally
insured  certificates  of  deposit which  mature  on  a  date  in  excess
of    90    days   from   the   date   of   purchase.    Due   to    this
characteristic,   these   deposits   are   classified   as    "short-term
investments" rather than as "cash and cash equivalents."

During  the  first  nine  months  of 1996,  the  Partnership  experienced
an   increase   in   cash  and  short  term  investments   of   $537,000.
Primary   uses   of   cash   were:  $84,000  for  capital   expenditures,
leasing    commissions   and   loan   costs,   $19,000   for    principal
payments   on   notes   payable,   and   $20,000   for   operations.   In
addition  to  rental  revenues,  a  primary  source  of  cash   was   the
sale  of  the  391  Forbes  Building which  resulted  in  increased  cash
of  $660,000.   As  of  September 30, 1996,  cash  and  cash  equivalents
totaled   $550,000  versus  a  balance  of  $212,000  at   December   31,
1995,  while  short  term  investments  at  September  30,  1996  totaled
$397,000 versus a balance of $198,000 on December 31, 1995.

RESULTS OF OPERATIONS

The   results  of  operations  for  1996  are  not  comparable  to  1995.
Variables  between  years  such  as number  of  properties  operated  and
number  of  properties  sold  cause  comparisons  of  operations  overall
to   be   misleading.    It  is  meaningful  however   to   compare   the
operations   of  those  properties  operated  continuously   during   the
first nine months of 1996 and 1995.

<PAGE>

<TABLE>

The   following  represents  the  operations  of  those  properties  held
continuously during the first nine months of 1996 and 1995:

<CAPTION>
                                    1996     1995      % Change
     <S>                           <C>       <C>        <C>
     Rental Revenue                $  970    $  880     + 10%
     Operating Expense                340       282     + 20%
     Net Operating Income             630       598     +  5%

     Interest Expense              $  518    $  555     -  7%

</TABLE>

Overall,   revenues   increased   10%   for   the   nine   months   ended
September   30,  1996  relative  to  the  same  period  in   1995.    The
revenue for the commercial properties remained stable.

Market  Conditions  in  Boise  and  the  San  Francisco  Bay  Area   have
stabilized.

Property   operating  expenses  increased  20%  for   the   nine   months
ended   September  30,  1996  relative  to  the  same  period  in   1995.
This was primarily due to increased operating costs.

On   August   16,   1996,  the  Partnership  sold   its   real   property
investment   in   the   391  Forbes  Building  located   in   South   San
Francisco,  California.   The  property  consisted  of  a  30,400  square
foot   commercial   building.    The   sale   price   received   by   the
Partnership  was  $1,730,000  which  resulted  in  a  gain  of   $223,000
and cash proceeds of $660,000.

Leased   occupancy   remained  stable  during  the  nine   months   ended
September   30,   1996.    The  Jefferson  Place   Office   Building   is
currently   93%   leased,  while  the  1201  Cadillac  property   remains
fully leased.

The  Partnership  declared  a cash dividend  of  $15  per  unit,  payable
to unit holders as of November 1, 1996.

INFLATION

In  past  years,  the  Partnership's  rental  revenues  in  certain  over
built  real  estate  markets,  including  Boise  and  the  San  Francisco
Bay   Area,  have  not  followed  the  overall  inflationary  trends   of
the  economy.   In  the  future,  the  General  Partner  believes  market
rate   rents  in  those  areas  will  more  closely  follow   or   exceed
inflation.    Operating   costs   for   properties   in   most   of   the
Partnership's    markets   have   continued   to   follow    inflationary
trends.    It   is   not   expected  that   the   Partnership   will   be
materially impacted by inflationary forces in the near term.

<PAGE>
                                
                   PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings
               None.

Item 2.   Changes in Securities
               None.

Item 3.   Defaults Upon Senior Securities
               None.

Item 4.   Submission of Matters to a Vote of Security Holders
               None.

Item 5.   Other Information
               None.

Item 6.   Exhibits and Reports on Form 8-K
          (a)  None
          (b)  The Partnership filed  a  report  on  Form   8-K   on
          August  16,  1996,  to  report the  disposition  of  its  asset
          known as the 391 Forbes Commercial Building.

<PAGE>
                               SIGNATURES


Pursuant  to  the  requirements  of  the  Securities  and  Exchange   Act
of  1934,  the  registrant  has duly caused  this  report  to  be  signed
on its behalf by the undersigned thereunto duly authorized.

                              LDP-III

Date: November 15, 1996       /s/ Gary K. Barr
                              Gary K. Barr, President
                              Landsing Equities Corporation
                              Managing General Partner