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

                                    FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934

                   For the Fiscal Year Ended December 31, 2006

                                       or

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

                    For the transition period from ___ to ___

                         Commission File Number 0-13331

              REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - III
              -----------------------------------------------------
             (Exact Name of Registrant as specified in its Charter)

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

                2350 North Forest Road Getzville, New York 14068
                ------------------------------------------------
                   (Address of Principal Executive Office)

Registrant's Telephone Number:                              (716) 636-9090
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Units of Limited
                                                            Partnership Interest

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.
         [ ] Yes                  [X] No

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.
         [ ] Yes                  [X] No

Indicate by a check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
         [X] Yes                  [ ] No

Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not 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-K or any
amendment to this Form 10-K.
         [X]

Indicate by a check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
<PAGE>
filer" in Rule 12b-2 of the Exchange Act. (Check one):
[ ] Large accelerated filer   [ ] Accelerated filer  [X] Non-accelerated filer

Indicate by a check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Act).
         [ ] Yes                  [X] No


                       DOCUMENTS INCORPORATED BY REFERENCE
        See Item 15 for a list of all documents incorporated by reference




















<PAGE>
                                     PART I
                                     ------

ITEM 1:   BUSINESS
-------   --------

         The Registrant, Realmark Property Investors Limited Partnership-III
(the "Partnership"), is a Delaware Limited Partnership organized in 1983,
pursuant to a Second Amended and Restated Agreement and Certificate of Limited
Partnership (the "Partnership Agreement"), under the Delaware Revised Uniform
Limited Partnership Act. The Partnership's general partners are Realmark
Properties, Inc. (the "Corporate General Partner"), a Delaware corporation, and
Joseph M. Jayson (the "Individual General Partner").

         The Registrant commenced the public offering of its limited partnership
units, registered with the Securities and Exchange Commission under the
Securities Act of 1933 as amended on February 1, 1984, and concluded the
offering on January 31, 1985, having raised a total of $15,551,000 before
deducting sales commissions and expenses of the offering.

         The Partnership's primary business and its only industry segment is to
own and operate income-producing real property for the benefit of its partners.
At December 31, 2005, the Partnership had disposed of all its properties. On
April 5, 2004, the Partnership sold Inducon Amherst for $2,045,000 resulting in
a net gain of approximately $20,000. On May 20, 2004, the partnership disposed
of its last property, Perrymont, for $2,450,000, less a $600,000 credit for work
which the buyer determined was necessary on the property, resulting in a gain of
approximately $145,000. Accordingly, the Partnership is in the process of
liquidating.

         The business of the Partnership is not seasonal. As of December 31,
2006, the Partnership did not directly employ any persons in a full-time
position. All persons who regularly rendered services on behalf of the
Partnership through December 31, 2006 were employees of the Corporate General
Partner or its affiliates.

         This annual report contains certain forward-looking statements
concerning the Partnership's current expectations as to future results. Words
such as "believes", "forecasts", "intends", "possible", "expects", "estimates",
"anticipates" or "plans" and similar expressions are intended to identify
forward-looking statements. Such statements may not ultimately turn out to be
accurate due to, among other things, economic or market conditions or the
failure of the Partnership to sell an investment which is under contract.

ITEM 1A:  RISK FACTORS
--------  ------------

         Investors or potential investors in Realmark Property Investors Limited
Partnership - III should carefully consider the risks described below. These
risks are not the only ones we face. Additional risks of which we are presently
unaware or that we currently consider immaterial may also impair our business
operations and hinder our financial performance, including our ability to make
distributions to our investors. We have organized our summary of these risks
into three subsections:

        o        tax risks;
        o        environmental and other legal risks; and
        o        risks for investors.

         This section includes forward-looking statements.

                                       2
<PAGE>
                                    Tax Risks

Our operating partnership may fail to be treated as a partnership for federal
income tax purposes

         Management believes that our operating partnership qualifies, and has
qualified since its formation as a partnership for federal income tax purposes
and not as a publicly traded partnership taxable as a corporation. We can
provide no assurance, however, that the IRS will not challenge the treatment of
the operating partnership as a partnership for federal income tax purposes or
that a court would not sustain such a challenge. If the IRS were successful in
treating the operating partnership as a corporation for federal income tax
purposes, then the taxable income of the operating partnership would be taxable
at regular corporate income tax rates.

                       Environmental and Other Legal Risks

We may have liability under environmental laws

         Under federal, state and local environmental laws, ordinances and
regulations, we may be required to investigate and clean up the effects of
releases of hazardous or toxic substances or petroleum products at our former
properties, regardless of our knowledge or responsibility, simply because of our
past ownership or operation of the real estate. Therefore, we may have liability
with respect to properties we have already sold. If environmental problems
arise, we may have to take extensive measures to remedy the problems, which
could adversely affect our remaining cash position because:

         o  we may have to pay for property damage and for investigation and
            clean-up costs incurred in connection with the contamination;
         o  the law typically imposes clean-up responsibility and liability
            regardless of whether the owner or operator knew of or caused the
            contamination;
         o  even if more than one person may be responsible for the
            contamination, each person who shares legal liability under the
            environmental laws may be held responsible for all of the clean-up
            costs; and
         o  governmental entities or other third parties may sue the owner,
            former owner or operator of a contaminated site for damages and
            costs.

         These costs could be substantial and in extreme cases could exceed the
value of the contaminated property. In addition, applicable environmental laws
create liens on contaminated sites in favor of the government for damages and
costs it incurs in connection with a contamination.

We may face risks related to mold and asbestos

         Recently, there has been an increasing number of lawsuits against
owners and managers of properties alleging personal injury and property damage
caused by the presence of mold in real estate.

         Some of these lawsuits have resulted in substantial monetary judgments
or settlements. The presence of significant mold could expose us to liability to
tenants and others if allegations regarding property damage, health concerns or
similar claims arise.

         Environmental laws also govern the presence, maintenance and removal of
asbestos. Those laws require that owners or operators of buildings containing
asbestos:
                                       3
<PAGE>
         o  properly manage and maintain the asbestos;
         o  notify and train those who may come into contact with asbestos; and
         o  undertake special precautions, including removal or other abatement,
            if asbestos would be disturbed during renovation or demolition of a
            building.

         Those laws may impose fines and penalties on building owners or
operators who fail to comply with these requirements and may allow others to
seek recovery from owners or operators for personal injury associated with
exposure to asbestos fibers.

                               Risks for Investors

We do not pay regular distributions, and we do not anticipate making any future
distributions to investors

         Unlike other Partnerships that pay regular distributions, we have not
paid regular distributions, and we presently have no plans to pay regular
distributions. Since 2001, we have paid distributions only out of the proceeds
of property sales as a result of the winding down of the Partnership.

ITEM 1B:    UNRESOLVED STAFF COMMENTS
--------    -------------------------

            None.

ITEM 2:     PROPERTIES
-------     ----------

             As of December 31, 2006, the Partnership did not own any property
investments.

ITEM 3:     LEGAL PROCEEDINGS
-------     -----------------

         As previously reported, the Partnership, as a nominal defendant, the
general partners of the Partnership and of affiliated public partnerships, (the
"Realmark Partnerships") and the officers and directors of the Corporate General
Partner, as defendants, had been involved in a class action litigation at the
state court level regarding the payment of fees and other management issues.

         On August 29, 2001, the parties entered into a Stipulation of
Settlement (the "Settlement"). On October 4, 2001, the Court issued an "Order
Preliminary Approving Settlement" (the "Hearing Order") and on November 29,
2001, the Court issued an "Order and Final Judgment Approving Settlement and
Awarding Fees and Expenses" and dismissing the complaints with prejudice. The
Settlement provided, among other things, that all of the Realmark Partnerships'
properties be disposed of. The general partners will continue to have primary
authority to dispose of the Partnerships' properties. If either (i) the general
partners have not sold or contracted to sell 50% of the Partnerships' properties
(by value) by April 2, 2002 or (ii) the general partners have not sold or
contracted to sell 100% of the Partnerships' properties by September 29, 2002,
then the primary authority to dispose of the Partnerships' properties will pass
to a sales agent designated by plaintiffs' counsel and approved by the Court. On
October 4, 2002, the Court appointed a sales agent to work with the general
partners to continue to sell the Partnership's remaining properties.

         The settlement also provided for the payment by the Partnerships of
fees to the plaintiffs' attorneys. These payments are payable out of the
proceeds from the sale of all of the properties owned by all of the Realmark
Partnerships, following the sale of the last of these properties in each
                                       4
<PAGE>
partnership. Plaintiffs' counsel will receive 15% of the amount by which the
sales proceeds distributable to limited partners in each partnership exceeds the
value of the limited partnership units in each partnership (based on the
weighted average of the units' trading prices on the secondary market as
reported by Partnership Spectrum for the period May through June 2001). In no
event may the increase on which the fees are calculated exceed 100% of the
market value of the units as calculated above. On May 20, 2004 the Partnership
sold its remaining property, and in December 2004, a payment of $404,501 was
made to the plaintiffs' attorneys.

ITEM 4:  SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
-------  ----------------------------------------------------

         None.

                                     PART II
                                     -------

ITEM 5:  MARKET FOR REGISTRANT'S UNITS OF LIMITED PARTNERSHIP INTEREST
-------  -------------------------------------------------------------

         There is currently no active trading market for the units of limited
partnership interest of the Partnership and it is not anticipated that any will
develop in the future. Accordingly, information as to the market value of a unit
at any given date is not available. As of December 31, 2005, there were 1,736
record holders of units of limited partnership interest. In December 2004, the
Partnership made distributions of its previously undistributed net cash from
sales proceeds. These distributions were made in accordance with the settlement
of the lawsuit (Item 3). A total of $1,525,136 was distributed on behalf of the
limited partners. Of this amount, $404,501 was paid to legal counsel in
accordance with the settlement of the lawsuit and $1,120,635 was distributed
directly to record holders of units of limited partnership interest. There were
no distributions to partners made in 2006 or 2005.




























                                       5
<PAGE>
<TABLE>
<CAPTION>
ITEM 6:  SELECTED FINANCIAL DATA
-------  -----------------------

                                                         At or for the years ended December 31,
                                  -------------------------------------------------------------------------------------
                                       2006 (1)        2005 (1)        2004 (1)           2003             2002
                                  -------------------------------------------------------------------------------------
<S>                               <C>                  <C>            <C>                  <C>              <C>
Balance sheet data
Net rental
property                          $             -                -               -         3,505,259        3,469,684
Total assets                               47,514          114,266         192,941         3,751,314        3,891,673
Mortgage loans payable                          -                -               -         1,703,787        1,736,328
Partners' equity                                -                -               -         1,801,045        2,013,598
                                  =====================================================================================
Operating data
Rental income                                   -                -         186,495           601,259          570,246
Other income                                    -                -          50,990           187,936          179,631
                                  -------------------------------------------------------------------------------------
Total revenue                                   -                -         237,485           789,195          749,877
                                  -------------------------------------------------------------------------------------
Property operating costs                        -                -         265,108           598,898          622,956
Interest expense                                -                -          26,848           166,442          168,155
Administrative expenses                         -                -         267,337           236,408          258,731
                                  -------------------------------------------------------------------------------------
Total expenses                                  -                -         559,293         1,001,748        1,049,842
                                  -------------------------------------------------------------------------------------
Operating loss                                  -                -        (321,808)         (212,553)        (299,965)
Gain on property sales                          -                -         164,286                 -                -
Extraordinary loss                              -                -        (404,501)                -                -
                                  -------------------------------------------------------------------------------------
Net income (loss)                               -                -        (562,023)         (212,553)        (299,965)
                                  =====================================================================================
Cash flow data
Net cash provided (used) by:
Operating activities                            -                -        (201,677)          (29,409)          (9,619)
Investing activities                            -                -       3,593,248           (50,768)        (116,458)
Financing activities                            -                -      (3,228,923)          (32,541)         (29,828)
                                  -------------------------------------------------------------------------------------
Net increase (decrease) in
cash and equivalents              $             -                -         162,648          (112,718)        (155,905)
                                  =====================================================================================
Per limited partnership unit:
Net income (loss)                 $             -                -           (9.51)           (13.26)          (18.71)
Distributions                     $             -                -           98.07                 -                -
                                  =====================================================================================
</TABLE>
(1) The Partnership began reporting on the liquidation basis of accounting
effective May 21, 2004. Therefore, operations for the years ended December 31,
2005 and 2004 are reported on the consolidated statement of changes in net
assets in liquidation for the year ended December 31, 2005 and for the period
from May 21, 2004 to December 31, 2004, while operations from the period from
January 1, 2004 to May 20, 2004 and for the years ended December 31, 2003, 2002,
and 2001 are reported on the going concern basis in the consolidated statements
of operations. Balance sheet data at December 31, 2006, 2005 and 2004 represents
the total assets and net assets in liquidation as reported in the consolidated
statement of net assets in liquidation (liquidation basis) at December 31, 2006,
2005 and 2004 (page F-3).
                                       6
<PAGE>
ITEM 7:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
-------  -----------------------------------------------------------------------
         OF OPERATIONS
         -------------

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

         Effective January 1, 2001, management began formally marketing all
properties in the Partnership for sale. On April 5, 2004, the Partnership sold
Inducon Amherst to an unaffiliated entity for cash of $2,045,000. After
satisfaction of the $1,704,000 mortgage loan on the property and payment of
closing costs, the net cash proceeds available amounted to $425,000, before
satisfaction of any remaining obligations related to the property. Additionally,
on May 20, 2004, the Partnership's only remaining property, Perrymont, was sold
to an unaffiliated entity for cash of $2,450,000, less a $600,000 credit for
work which the buyer determined was necessary on the property. After
satisfaction of closing costs, the net cash proceeds available amounted to
approximately $1,658,000, before satisfaction of any remaining obligations
related to the property. These proceeds enabled the partnership to make a
distribution in December 2004 of $1,120,635 after a payment of $404,501 to the
plaintiff's counsel in accordance with the settlement of the lawsuit (Item 3).
The Partnership made no distributions to limited partners in 2005 and 2003. The
Partnership does not anticipate any remaining proceeds, net of those amounts
that are required to pay the estimated payables and costs of operating the
partnership during liquidation, will be available for distribution to the
limited partners.

         Except as described above and in the consolidated financial statements,
the general partner is not aware of any trends or events, commitments or
uncertainties that may impact liquidity in a material way.

Results of Operations:

         As a result of the sale of the remaining property, Perrymont, and the
establishment of a plan of liquidation, the Partnership began operating on the
liquidation basis of accounting effective May 21, 2004. Therefore, operations
for the year ended December 31, 2006 and for the period May 21, 2004 to December
31, 2004 are reported in the consolidated statement of changes in net assets in
liquidation while the operations for the period January 1, 2004 to May 20, 2004
and for the years ended December 31, 2003 are reported on the going concern
basis in the consolidated statements of operations.

         Inflation has been consistently low during the periods presented in the
consolidated financial statements and, as a result, has not had a significant
effect on the operations of the Partnership or its properties.

2006 as compared to 2005

         As discussed above, the Partnership began reporting on a liquidation
basis of accounting on May 20, 2004. Operating activity for 2006 consisted of
the repayment of receivables from affiliates amounting to $114,266 at December
31, 2005.

2005 as compared to 2004

         As discussed above, the Partnership began reporting on a liquidation
basis of accounting on May 21, 2004. Operating activity for 2005 consisted of
the payment of liabilities recorded at December 31, 2004.
                                       7
<PAGE>
ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------  ----------------------------------------------------------

         Not applicable.


ITEM 8:  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------  -------------------------------------------

         Listed under Item 15 of this report.

ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
------- ---------------------------------------------------------------
        FINANCIAL DISCLOSURE
        --------------------

         None.

ITEM 9A: CONTROLS AND PROCEDURES
-------- -----------------------

         The Partnership maintains a set of disclosure controls and procedures
designed to ensure that information required to be disclosed by the Partnership
in reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in
Securities and Exchange Commission rules and forms. Within the 90-day period
prior to the filing of this report, an evaluation was carried out under the
supervision and with the participation of the Partnership's management,
including the Partnership's Individual General Partner and Principal Financial
Officer, of the effectiveness of the Partnership's disclosure controls and
procedures. Based on that evaluation, the Partnership's Individual General
Partner and Principal Financial Officer concluded that the Partnership's
disclosure controls and procedures are effective.

         Subsequent to the date of their most recent evaluation, there have been
no significant changes in the Partnership's internal control over financial
reporting or in other factors that could significantly affect the internal
control over financial reporting.

                                    PART III
                                    --------

ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
-------- --------------------------------------------------

         The Partnership, as an entity, does not have any directors or officers.
The Individual General Partner of the Partnership is Joseph M. Jayson. The
directors and executive officers of Realmark Properties, Inc., the Partnership's
Corporate General Partner, as of December 31, 2006, are listed below. Each
director is subject to election on an annual basis.
<TABLE>
<CAPTION>
                          Title of All Positions Held with
Name                      the Corporate General Partner                Year First Elected to Position
----                      -----------------------------                ------------------------------
<S>                       <C>                                                        <C>
Joseph M. Jayson          Chairman of the Board, President                           1979
                            and Treasurer

Judith P. Jayson          Vice President and Director                                1979
</TABLE>
                                       8
<PAGE>
         Joseph M. Jayson and Judith P. Jayson are married to each other.

         The Directors and Executive Officers of the Corporate General Partner
and their principal occupations and affiliations during the last five years or
more are as follows:

         Joseph M. Jayson, age 68, is Chairman, Director and sole stockholder of
J. M. Jayson and Company, Inc. and certain of its affiliated companies: U.S.
Apartments LLC, Westmoreland Capital Corporation, Oilmark Corporation and U.S.
Energy Development Corporation. In addition, Mr. Jayson is Chairman of Realmark
Corporation, Chairman, President and Treasurer of Realmark Properties, Inc.,
wholly-owned subsidiaries of J. M. Jayson and Company, Inc. and co-general
partner of Realmark Property Investors Limited Partnership, Realmark Property
Investors Limited Partnership-II, Realmark Property Investors Limited
Partnership-III, Realmark Property Investors Limited Partnership-IV, Realmark
Property Investors Limited Partnership-V, Realmark Property Investors Limited
Partnership-VI A, and Realmark Property Investors Limited Partnership-VI B. Mr.
Jayson has been in the real estate business for the last 44 years and is a
Certified Property Manager as designated by the Institute of Real Estate
Management ("I.R.E.M."). Mr. Jayson received a B.S. Degree in Education in 1961
from Indiana University, a Masters Degree from the University of Buffalo in
1963, and has served on the educational faculty of the Institute of Real Estate
Management. Mr. Jayson has for the last 44 years been engaged in various aspects
of real estate brokerage and investment. He brokered residential properties from
1962 to 1964, commercial investment properties from 1964 to 1967, and in 1967
left commercial real estate to form his own investment firm. Since that time,
Mr. Jayson and J. M. Jayson & Company, Inc. have formed or participated in
various ways with forming over 30 real estate related limited partnerships. For
the past 25 years, Mr. Jayson and an affiliate have also engaged in
developmental drilling for gas and oil.

         Judith P. Jayson, age 66, is currently Vice President and a Director of
Realmark Properties, Inc. She is also a Director of the property management
affiliate, Realmark Corporation. Mrs. Jayson has been involved in property
management for the last 35 years and has extensive experience in the hiring and
training of property management personnel and in directing, developing and
implementing property management systems and programs. Mrs. Jayson, prior to
joining the firm in 1973, taught business in the Buffalo, New York High School
System. Mrs. Jayson graduated from St. Mary of the Woods College in Terre Haute,
Indiana, with a degree in Business Administration.

Audit Committee
---------------

         The Partnership has a separately-designated standing audit committee
established in accordance with Section 3(a)(58)(A) of the Exchange Act. The
members of the audit committee are Joseph M. Jayson and Duane Neyman, CPA.

Audit Committee Financial Expert
--------------------------------

         The Directors and Executive Officers of the Corporate General Partner
have determined that Duane Neyman, CPA is an audit committee financial expert as
defined by Item 401(h) of Regulation S-K of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). Mr. Neyman is not independent within the
meaning of Item 7(d)(3)(iv) of Schedule 14A of the Exchange Act due to limited
circumstances - namely that the Partnership is small in size and there is
limited personnel. Mr. Neyman is not independent as a result of being an
employee of an affiliate of the Corporate General Partner.
                                       9
<PAGE>
Code of Ethics
--------------

         The Partnership has adopted a code of ethics for the partners,
principal financial officer, and employees of the Corporate General Partner or
its affiliates who render services on behalf of the Partnership. The Partnership
will provide to any person without charge, upon request, a copy of the code of
ethics which is available from:

         Realmark Property Investors Limited Partnership - III
         Attention:  Investor Relations
         2350 North Forest Road
         Getzville, New York 14068

ITEM 11: EXECUTIVE COMPENSATION
-------- ----------------------

         No direct remuneration was paid or payable by the Partnership to
directors and officers (since it has no directors or officers), nor was any
direct remuneration paid or payable by the Partnership to directors or officers
of Realmark Properties, Inc., the Corporate General Partner and sponsor, for the
year ended December 31, 2006. The Corporate General Partner and its affiliate,
Realmark Corporation, are entitled to fees and to certain expense reimbursements
with respect to Partnership operations, as set forth in Item 13 hereof and in
the notes to the consolidated financial statements.

ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
-------- --------------------------------------------------------------

         No person is known to the Partnership to own of record or beneficially,
more than 5% of the units of limited partnership interests of the Partnership,
except for affiliates of the general partners that own 1111.9 units of limited
partnership interest amounting to approximately 7.2% of the partnership interest
at December 31, 2006. The general partners and the executive officers of the
Corporate General Partner, as of December 31, 2006, owned 25.5 units of limited
partnership interest. The general partners and affiliates will receive their
proportionate share, as limited partners, of any distributable proceeds from the
sale of the properties.

ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
-------------------------------------------------------

             The properties of the Partnership and its subsidiary are managed by
Realmark Corporation, an affiliate of the Partnership's corporate general
partner, for a fee of generally 5% of annual net rental income of the
properties. Realmark Corporation and the Corporate General Partner are also
reimbursed for disbursements made on behalf of the Partnership. Those
transactions are further described, and quantified, in the note to the
consolidated financial statements entitled "Related Party Transactions."

ITEM 14: PRINCIPAL ACCOUNTING FEES AND SERVICES
-----------------------------------------------

Audit Engagement: Rotenberg & Co., L.L.P. was engaged as the Partnership's
independent auditor for the year 2006. Toski, Schaefer, & Co., P.C. was engaged
as the Partnership's independent auditor for the year 2005. All fees incurred
for the years ended December 31, 2006 and 2005 were approved by the Audit
Committee.

Audit Fees: Audit fees for the Partnership's quarterly reports on Form 10-Q
performed by Rotenberg & Co., LLP for the year ended December 31, 2006 totaled

                                       10
<PAGE>
$9,000. Audit fees for the audit of the Partnership's annual financial
statements included in the Partnership's annual report on Form 10-K and those
financial statements included in the Partnership's quarterly reports on Form
10-Q by Toski, Schaefer & Co., P.C. for the year ended December 31, 2005 totaled
$32,000.

Audit-Related Fees: None.

Tax Fees: The Partnership engaged Toski, Schaefer & Co., P.C. to provide tax
filing and compliance services during the year ended December 31, 2005. The fees
paid to Toski, Schaefer & Co., P.C. for these services amounted to $4,535 for
the year ended December 31, 2005.

All Other Fees:  None.

         The Audit Committee has set a policy that all fees incurred by the
Partnership for services performed by its independent auditors must be
pre-approved by the Audit Committee. All fees related to 2006 and 2005 were
pre-approved by the Audit Committee.

         The Audit Committee oversees the Partnership's financial reporting
process. Management has the primary responsibility for the financial statements
and the financial reporting process, including the systems of internal controls.
In fulfilling its oversight responsibilities, the Audit Committee reviewed the
audited financial statements with management, including a discussion of the
quality, not just the acceptability, of the accounting principles, the
reasonableness of significant judgments and the clarity of disclosures in the
financial statements.

        The Audit Committee has the sole authority to retain and terminate the
Partnership's independent auditors and approves all fees paid to the independent
auditors. During 2006 and 2005, the Audit Committee reviewed with the
independent auditors, who are responsible for expressing an opinion on the
conformity of those audited financial statements with generally accepted
accounting principles, their judgments as to the quality, not just the
acceptability, of the Partnership's accounting principles and such other matters
as are required to be discussed with the Audit Committee under generally
accepted auditing standards. In addition, the Audit Committee has discussed with
the independent auditors the auditors' independence from management and the
Partnership, including the matters in the written disclosures required by the
Independence Standards Board, and considered the scope and type of non-audit
services provided by the auditor when reviewing the compatibility of those
non-audit services with the auditors' independence.

         The Audit Committee discussed with the Partnership's independent
auditors the overall scope and plans for their audit. The Audit Committee meets
with the independent auditors to discuss the results of their examination, their
evaluations of the Partnership's internal controls, and the overall quality of
the Partnership's financial reporting.

         In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the General Partners (and the General Partners have
approved) that the audited financial statements be included in the annual report
on Form 10-K for the year ended December 31, 2006.






                                       11
<PAGE>
                                     PART IV
                                     -------
<TABLE>
<CAPTION>
ITEM 15: EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM 8-K
-------- ------------------------------------------------------------------

(a)      Consolidated Financial Statements                                                  Page
         ---------------------------------                                                  ----
<S>                                                                                           <C>
         Independent Auditor's Report                                                       F-1
         Consolidated Statement of Net Assets in Liquidation as of
                December 31, 2006   and 2005                                                F-3
         Consolidated Statement of Changes in Net Assets in Liquidation for
                the years ended December 31, 2006 and 2005                                  F-4
         Consolidated Statements of Operations for the period January 1, 2004
                to May 20, 2004                                                             F-5
         Consolidated Statements of Partners' Equity for the period January 1, 2004
                to May 20, 2004                                                             F-6
         Consolidated Statements of Cash Flows for the period January 1, 2004
                to May 20, 2004                                                             F-7
         Notes to Consolidated Financial Statements                                         F-8

         FINANCIAL STATEMENT SCHEDULE
         ----------------------------

         (i)  Schedule III - Real Estate and Accumulated Depreciation                       F-15
</TABLE>
         All other schedules are omitted because they are not applicable or the
         required information is shown in the consolidated financial statements
         or the notes thereto.

(b)      Exhibits
         --------

         2.    Plan of acquisition, reorganization, arrangement, liquidation, or
               succession

               (a)  Stipulation of Settlement Agreement dated August 29, 2001 is
                    incorporated herein by reference.

               (b)  Order and Final Judgment Approving Settlement and Awarding
                    Fees and Expenses dated November 29, 2001 is incorporated
                    herein by reference.

         4.    Instruments defining the rights of security holder, including
               indentures

               (a)  Second Amended and Restated Agreement and Certificate of
                    Limited Partnership filed with the Registration Statement of
                    the Registrant Form S-11, filed November 21, 1983, and
                    subsequently amended is incorporated herein by reference.

         10.  Material contracts

               (a)  Property Management Agreement with Realmark Corporation
                    included with the Registration Statement of the Registrant
                    as filed and amended to date is incorporated herein by
                    reference.

                                       12
<PAGE>
         14.   Code of Ethics filed December 31, 2003, is incorporated herein by
               reference.

         21.  Subsidiary of the Partnership is filed herewith.

         31.  Certification Pursuant to Rule 13a-14(a), as Adopted Pursuant to
              Section 302 of the Sarbanes-Oxley Act of 2002, is filed herewith.

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
















































                                       13
<PAGE>
                                   SIGNATURES
                                   ----------

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

REALMARK PROPERTY INVESTORS
LIMITED PARTNERSHIP - III


By:      /s/Joseph M. Jayson                                    March 29, 2007
         --------------------                                   --------------
         JOSEPH M. JAYSON,                                           Date
         Individual General Partner

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

By:      REALMARK PROPERTIES, INC.
         Corporate General Partner

         /s/ Joseph M. Jayson                                   March 29, 2007
         ---------------------                                  --------------
         JOSEPH M. JAYSON,                                           Date
         President, Treasurer and Director


         /s/ Judith P. Jayson                                   March 29, 2007
         ---------------------                                  --------------
         JUDITH P. JAYSON,                                           Date
         Vice President and Director


























                                       14
<PAGE>
             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             -------------------------------------------------------


To the Partners
Realmark Property Investors Limited Partnership - III
Getzville, New York


         We have audited the accompanying consolidated statement of net assets
in liquidation (liquidation basis) of Realmark Property Investors Limited
Partnership - III and Subsidiary ("the Company") as of December 31, 2006, and
the related consolidated statement of changes in net assets in liquidation
(liquidation basis) for the year then ended. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.

         We conducted our audit 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
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

         As discussed in note 1 to the consolidated financial statements, on May
20, 2004 the Company adopted a plan of termination and liquidation. As a result,
the Company has changed its basis of accounting from the going concern to the
liquidation basis effective May 21, 2004.

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the net assets in liquidation of
Realmark Property Investors Limited Partnership - III and Subsidiary as of
December 31, 2006, and the related consolidated changes in net assets in
liquidation for the year then ended, in conformity with accounting principles
generally accepted in the United States of America.


/s/ Rotenberg & Co., LLP
------------------------
Rotenberg & Co., LLP
Rochester, New York
  March 29, 2007













                                       F-1
<PAGE>
                          INDEPENDENT AUDITOR'S REPORT
                          ----------------------------

The Partners
Realmark Property Investors Limited
     Partnership - III:

We have audited the accompanying consolidated statement of net assets in
liquidation of Realmark Property Investors Limited Partnership - III and
Subsidiary as of December 31, 2005, and the related consolidated statements of
changes in net assets in liquidation for the year ended December 31, 2005 and
for the period May 21, 2004 to December 31, 2004. In addition we have audited
the consolidated statements of operations, partners' equity, and cash flows for
the period January 1, 2004 to May 20, 2004. Our audits also included the
financial statement schedule listed in the index at Item 15. These consolidated
financial statements and the financial statement schedule are the responsibility
of the General Partners. Our responsibility is to express an opinion on the
consolidated financial statements and the financial statement schedule 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. The Partnership is not required to
have, nor were we engaged to perform, an audit of its 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, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

As discussed in note 1 to the consolidated financial statements, on May 20, 2004
the Partnership adopted a plan of termination and liquidation. As a result, the
Partnership has changed its basis of accounting from the going concern to the
liquidation basis effective May 21, 2004.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the net assets in liquidation of Realmark
Property Investors Limited Partnership - III and Subsidiary as of December 31,
2005, and the related changes in net assets in liquidation for the year ended
December 31, 2005 and for the period May 21, 2004 to December 31, 2004, and the
results of their operations and their cash flows for the period January 1, 2004
to May 20, 2004 in conformity with accounting principles generally accepted in
the United States of America. Also, in our opinion, the financial statement
schedule, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.

                                             /s/ TOSKI, SCHAEFER & CO., P.C.
                                             -------------------------------
                                             TOSKI, SCHAEFER & CO., P.C.
Williamsville, New York
March 31, 2006
                                      F-1a
<PAGE>
<TABLE>
<CAPTION>
              REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - III
                                 AND SUBSIDIARY
               Consolidated Statement of Net Assets in Liquidation
                               (Liquidation Basis)
                           December 31, 2006 and 2005


                                                              2006        2005
                                                              ----        ----
<S>                                                           <C>        <C>
Assets:

     Cash                                                     $47,514         --

     Receivable from affiliated parties                            --    114,266
                                                              -------    -------


                  Total assets                                 47,514    114,266
                                                              -------    -------

Liabilities:

     Accounts payable and accrued expenses                      3,175     57,187

     Payable to affiliated parties                              2,831         --

     Estimated costs during the period of liquidation          41,508     57,079
                                                              -------    -------

                  Total liabilities                            47,514    114,266
                                                              -------    -------

                  Net assets in liquidation                   $    --         --
                                                              =======    =======
</TABLE>




















See accompanying notes to consolidated financial statements.

                                       F-2
<PAGE>
<TABLE>
<CAPTION>
             REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - III
                                 AND SUBSIDIARY
         Consolidated Statements of Changes in Net Assets in Liquidation
                               (Liquidation Basis)

             For the years ended December 31, 2006 and 2005 and for
                  the period May 21, 2004 to December 31, 2004




<S>                                                                 <C>
Partners' equity at  May 21, 2004 (going concern basis)             $ 1,727,195

Adjustment to Liquidation Basis - loss on settlement of lawsuit        (404,501)
                                                                    -----------

Net assets in liquidation at May 21, 2004                             1,322,694

Estimated costs during the period of liquidation                       (202,059)

Distributions to limited partners                                    (1,120,635)
                                                                    -----------

Net assets in liquidation at December 31, 2004                               --

Change in net assets                                                         --
                                                                    -----------

Net assets in liquidation at December 31, 2005                               --


Change in net assets                                                         --
                                                                    -----------
Net assets in liquidation at December 31, 2006                      $        --
                                                                    ===========
</TABLE>



















See accompanying notes to consolidated financial statements.

                                       F-3
<PAGE>
<TABLE>
<CAPTION>
              REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - III
                                 AND SUBSIDIARY

                      Consolidated Statement of Operations
                     Period January 1, 2004 to May 20, 2004


<S>                                                                   <C>
Income:
     Rental                                                           $ 177,762
     Interest and other                                                  51,208
                                                                      ---------

                           Total income                                 228,970
                                                                      ---------
Expenses:
     Property operations                                                252,274
     Interest                                                            26,044
     Administrative:
         Affiliated parties                                             114,866
         Other                                                           73,922
                                                                      ---------

                           Total expenses                               467,106
                                                                      ---------

Loss before gain on sale of property                                   (238,136)

Gain on sale of properties                                              164,286
                                                                      ---------

                           Net loss                                   $ (73,850)
                                                                      =========

Net loss per limited partnership unit                                 $   (4.29)
                                                                      =========

Weighted average number of limited partnership
     units outstanding                                                   15,551
                                                                      =========
</TABLE>
















See accompanying notes to consolidated financial statements.

                                       F-4
<PAGE>
<TABLE>
<CAPTION>
              REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - III
                                 AND SUBSIDIARY

                   Consolidated Statement of Partners' Equity
                     Period January 1, 2004 to May 20, 2004






                                         General            Limited Partners
                                         Partners        Units          Amount
                                         --------        -----          ------
<S>                                     <C>                <C>        <C>
Balances at December 31, 2003           $ (102,108)        15,551     1,903,153

Net loss                                    (7,144)            --       (66,706)
                                        ----------     ----------    ----------

Balance at May 20, 2004                 $ (109,252)        15,551     1,836,447
                                        ==========     ==========    ==========
</TABLE>

































See accompanying notes to consolidated financial statements.

                                       F-5
<PAGE>
<TABLE>
<CAPTION>
              REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - III
                                 AND SUBSIDIARY

                      Consolidated Statement of Cash Flows
                     Period January 1, 2004 to May 20, 2004


<S>                                                                 <C>
Cash flows from operating activities:
     Net loss                                                       $   (73,850)
     Adjustments to reconcile net loss to net
         cash used in operating activities:
              Amortization                                               25,607
              Gain on sale of properties                               (164,286)
              Changes in:
                  Accounts receivable                                    (5,852)
                  Escrow deposits                                       150,315
                  Other assets                                           35,692
                  Accounts payable and accrued expenses                  71,102
                  Payable to affiliated parties                          19,820
                  Accrued interest payable                              (12,647)
                  Security deposits and prepaid rents                   (53,972)
                                                                    -----------

                      Net cash used in operating activities              (8,071)
                                                                    -----------

Cash flows from investing activities - proceeds from sale
     of property                                                      3,593,248
                                                                    -----------

Cash flows from financing activities -
     principal payments on mortgage loans                            (1,703,787)
                                                                    -----------

Net increase in cash and equivalents                                  1,881,390

Cash and equivalents at beginning of period                              30,293
                                                                    -----------

Cash and equivalents at end of period                               $ 1,911,683
                                                                    ===========

Supplemental disclosure of cash flow information -
     cash paid for interest                                         $    24,454
                                                                    ===========
</TABLE>










See accompanying notes to consolidated financial statements.

                                       F-6
<PAGE>
              REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - III
                                 AND SUBSIDIARY
                   Notes to Consolidated Financial Statements
                        December 31, 2006, 2005 and 2004

(1) Liquidation of the Partnership
--- ------------------------------

     On  May 20, 2004, the Partnership sold its remaining property investment,
         Perrymont, and adopted a plan of termination and liquidation under
         which obligations to non-affiliates will be paid and net proceeds will
         be distributed to the limited partners.

(2)  Formation and Operation of Partnership
---  --------------------------------------

     Realmark Property Investors Limited Partnership - III (the Partnership) is
         a Delaware limited partnership formed on November 18, 1983, to invest
         in a diversified portfolio of income-producing real estate investments.

     In 1984 and 1985, the Partnership sold through a public offering, 15,551
         units of limited partnership interest for $15,551,000. The general
         partners are Realmark Properties, Inc. (the Corporate General Partner)
         and Joseph M. Jayson (the Individual General Partner) who is the sole
         shareholder of J.M. Jayson & Company, Inc. Realmark Properties, Inc. is
         a wholly-owned subsidiary of J.M. Jayson & Company, Inc.

     Under the partnership agreement, the general partners and their affiliates
         can receive compensation for services rendered and reimbursement for
         expenses incurred on behalf of the Partnership (note 7).

(3)  Summary of Significant Accounting Policies
---  ------------------------------------------

     (a) Basis of Accounting and Consolidation
     -----------------------------------------

         As a result of the plan of termination and liquidation, the
              Partnership changed its basis of accounting from the going concern
              basis to the liquidation basis effective May 21, 2004. Under the
              liquidation basis of accounting, assets are stated at their
              estimated net realizable values and liabilities are stated at
              their estimated settlement amounts.

         In estimating liquidation values, fees paid to the plaintiffs' legal
              counsel, amounting to $404,501 were recorded as a loss on
              settlement of the lawsuit.

         The accompanying consolidated financial statements have been prepared
              on the accrual basis of accounting in accordance with accounting
              principles generally accepted in the United States of America and
              include the accounts of the Partnership and its wholly-owned
              subsidiary, Realmark - Inducon Amherst, LLC which owns Inducon
              Amherst, an office building located in Amherst, New York, acquired
              in 1985.

         In consolidation, all intercompany accounts and transactions have been
              eliminated.


                                       F-7
<PAGE>
              REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - III
                                 AND SUBSIDIARY
              Notes to Consolidated Financial Statements, Continued


(3)  Summary of Significant Accounting Policies, Continued
---  -----------------------------------------------------

     (b) Estimates
     -------------

         The preparation of financial statements in conformity with generally
              accepted accounting principles requires management to make
              estimates and assumptions that affect certain reported amounts and
              disclosures. Accordingly, actual results could differ from those
              estimates.

     (c) Property and Equipment
     --------------------------

         Upon disposal of depreciable property, the appropriate property
              accounts are reduced by the related costs and accumulated
              depreciation and resulting gains and losses are reflected in the
              consolidated statements of operations.

     (d) Cash and Equivalents
     ------------------------

         Cash and equivalents includes money market accounts and any highly
              liquid debt instruments purchased with a maturity of three months
              or less.

     (e) Rental Income
     -----------------

         Rental income is recognized as earned according to the terms of the
              leases. Leases for residential properties are generally for
              periods of one year or less, payable monthly. Commercial leases
              are generally for periods of one to five years. Delinquent
              residential property rent is not recorded.

     (f) Fair Value of Financial Instruments
     ---------------------------------------

         The fair value of the Partnerships financial instruments approximated
              their carrying values.

     (g) Per Unit Data
     -----------------

         Per limited partnership unit is based on the weighted average number
              of limited partnership units outstanding for the year.

     (h) Income Allocation and Distributable Cash Flow
     -------------------------------------------------

         The partnership agreement provides that income not arising from sale
              and refinancing activities and all partnership losses are to be
              allocated 97% to the limited partners and 3% to the general
              partners. Partnership income arising from sale or refinancing
                                       F-8
<PAGE>
              REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - III
                                 AND SUBSIDIARY
              Notes to Consolidated Financial Statements, Continued


(3)  Summary of Significant Accounting Policies, Continued
---  -----------------------------------------------------

     (h) Income Allocation and Distributable Cash Flow, Continued

              activities is allocated in the same proportion as distributions of
              distributable cash from sale proceeds. In the event there is no
              distributable cash from sale proceeds, taxable income will be
              allocated 87% to the limited partners and 13% to the general
              partners. The above is subject to tax laws that were applicable at
              the time of the formation of the Partnership and may be adjusted
              due to subsequent changes in the Internal Revenue Code.

         The partnership agreement also provides for the distribution to the
              partners of net cash flow from operations. As a result of the sale
              of the Partnership's last property, there will be no future
              distributions of net cash flow from operations. Sale or
              refinancing proceeds are distributed to the extent available, 100%
              to the limited partners until there has been a return of the
              limited partner's capital contribution plus an amount sufficient
              to provide a 7%, not compounded, return on their adjusted capital
              contributions for all years following the termination of the
              offering of the units. It is anticipated that there will not be
              sufficient cash flow from the sale of the Partnership's remaining
              properties to provide this return to the limited partners.

     (i) Income Taxes
     ----------------

         No income taxes are included in the consolidated financial statements
              since the taxable income or loss of the Partnership is reportable
              by the partners on their income tax returns. At December 31, 2006,
              net assets for financial reporting purposes were equal to the tax
              bases of the net assets.

     (j) Segment Information
     -----------------------

         The Partnership's operating segments all involve the ownership and
              operation of income-producing real property and are aggregated
              into one reporting segment.

(4)  Investments in Real Estate
---  --------------------------

     On May 20, 2004, the Partnership sold Perrymont to an unaffiliated entity
         for cash of $2,450,000, less a $600,000 credit for work which the buyer
         determined was necessary on the property, and recognized a related gain
         on the sale amounting to $144,785.

     On April 5, 2004, the Partnership sold Inducon Amherst to an unaffiliated
         entity for cash of $2,045,000 and recognized a related gain on the sale
         amounting to $19,501.

                                      F-9

<PAGE>
              REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - III
                                 AND SUBSIDIARY
              Notes to Consolidated Financial Statements, Continued

(5)  Mortgage Loan Payable
---  ---------------------

     8.62% mortgage loan payable with total monthly payment of $15,250. The
         mortgage was secured by the Inducon Amherst property. The balance of
         the mortgage loan payable amounted to $1,703,787 at December 31, 2003.
         This mortgage was repaid in 2004 in connection with the sale of Inducon
         Amherst.

(6) Estimated Costs During the Period of Liquidation
----------------------------------------------------

     Under the liquidation basis of accounting, the Partnership is required to
         estimate and record the costs associated with executing the plan of
         liquidation as a liability. These amounts can vary significantly due
         to, among other things, the costs of retaining personnel, the costs of
         insurance, the timing and amounts associated with discharging known and
         contingent liabilities and the costs associated with cessation of the
         Partnership's operations. These costs are estimates and are expected to
         be paid out over the liquidation period. The Partnership's estimated
         costs during the period of liquidation as of December 31, 2006 and 2005
         are as follows:
<TABLE>
<CAPTION>
                                                                      2006                 2005
                                                                      ----                 ----
<S>                                                                 <C>                   <C>
                           Professional fees                        $   1,790             21,519
                           Office and administrative expense           39,718             35,560
                                                                    ---------             ------

                                     Total                          $  41,508             57,079
                                                                    =========             ======
</TABLE>
(7)  Related Party Transactions
---  --------------------------

     The Corporate General Partner and its affiliates earn fees, principally for
         property and partnership management and are reimbursed for services
         rendered to the Partnership, as provided for in the partnership
         agreement. A summary of those items follows:
















                                      F-10
<PAGE>
<TABLE>
<CAPTION>
              REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - III
                                 AND SUBSIDIARY
              Notes to Consolidated Financial Statements, Continued


(7)  Related Party Transactions, Continued
---  -------------------------------------

                                                                   Liquidation period
                                                                   ------------------
                                                                                May 21 to          January 1
                                                        2006      2005      December 31, 2004   to May 20, 2004
                                                        ----      ----      -----------------   ---------------
<S>                                                    <C>        <C>             <C>                 <C>
          Property management fees
              based on a percentage
              (generally 5%) of the
              rental income                            $      -         -                -            17,556

         Reimbursement for cost of services to
              the Partnership that include
              investor relations, marketing of
              properties, professional fees,
              communications, supplies, accounting,
               printing, postage and
              other items                                16,603    13,463           40,515            97,310
                                                       --------  --------         --------          --------

                                                       $ 16,603    13,463           40,515           114,866
                                                       ========  ========         ========          ========
</TABLE>
     In addition to the above, other property specific expenses such as
         payroll, benefits, etc. are charged to property operations on the
         Partnership's consolidated statements of operations. Receivable from
         affiliated parties bears interest at 8%, are payable on demand and
         amounted to $114,266 at December 31, 2005. In 2006, the receivable from
         affiliated parties was repaid. Payable to affiliated parties bears
         interest at 8%, are payable on demand and amounted to $2,831 at
         December 31, 2006.

     Property Disposition Fees
     -------------------------

     According to the terms of the partnership agreement, the general partners
         are allowed to collect property disposition fees upon the sale of
         acquired properties. This fee is not to exceed the lesser of 50% of
         amounts customarily charged in arm's-length transactions by others
         rendering similar services for comparable properties, or 2.75% of the
         sales price. The property disposition fee is subordinate to payments to
         the limited partners of a cumulative annual return (not compounded)
         equal to 7% of their average adjusted capital balances and to repayment
         to the limited partners of an amount equal to their capital
         contributions. The general partners have not to date received a
         disposition fee on any property sales, as the limited partners of the
         Partnership have not received a return of 7% on their average adjusted
         capital or their original capital as defined in the partnership
         agreement. Fees earned on the sales will not be recorded as liabilities
         by the Partnership until such time as payment is probable.

                                      F-11
<PAGE>
              REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - III
                                 AND SUBSIDIARY
              Notes to Consolidated Financial Statements, Continued


(8)  Settlement of Lawsuit
---  ---------------------

     As previously reported, the Partnership, as a nominal defendant, the
         general partners of the Partnership and of affiliated public
         partnerships (the "Realmark Partnerships") and the officers and
         directors of the Corporate General Partner, as defendants, had been
         involved in a class action litigation at the state court level
         regarding the payment of fees and other management issues.

     On August 29, 2001, the parties entered into a Stipulation of Settlement
         (the "Settlement"). On October 4, 2001, the Court issued an "Order
         Preliminary Approving Settlement" (the "Hearing Order") and on November
         29, 2001, the Court issued an "Order and Final Judgment Approving
         Settlement and Awarding Fees and Expenses" and dismissing the
         complaints with prejudice. The Settlement provided, among other things,
         that all of the Realmark Partnerships' properties be disposed of. The
         general partners will continue to have primary authority to dispose of
         the Partnerships' properties. If either (i) the general partners have
         not sold or contracted to sell 50% of the Partnerships' properties (by
         value) by April 2, 2002 or (ii) the general partners have not sold or
         contracted to sell 100% of the Partnerships' properties by September
         29, 2002, then the primary authority to dispose of the Partnerships'
         properties will pass to a sales agent designated by plaintiffs' counsel
         and approved by the Court. On October 4, 2002, the Court appointed a
         sales agent to work with the general partners to continue to sell the
         Partnerships' remaining properties.

     The settlement also provided for the payment by the Partnerships of fees to
         the plaintiffs' attorneys. These payments are payable out of the
         proceeds from the sale of all of the properties owned by all of the
         Realmark Partnerships, following the sale of the last of these
         properties in each partnership. Plaintiffs' counsel will receive 15% of
         the amount by which the sales proceeds distributable to limited
         partners in each partnership exceeds the value of the limited
         partnership units in each partnership (based on the weighted average of
         the units' trading prices on the secondary market as reported by
         Partnership Spectrum for the period May through June 2001). In no event
         may the increase on which the fees are calculated exceed 100% of the
         market value of the units as calculated above. On May 20, 2004, the
         Partnership sold its remaining property, and in December 2004, a
         payment of $404,501 was made to the plantiffs' attorneys.














                                      F-12
<PAGE>
                                                                   Schedule III
                                                                   ------------

              REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - III
                                 AND SUBSIDIARY

                    Real Estate and Accumulated Depreciation
                                December 31, 2004


(1)      Cost for Federal income tax purposes is none.

(2)      A reconciliation of the carrying amount of land, buildings and
         improvements as of December 31, 2004 is as follows:



Balance at beginning of year                                        $ 6,507,325
Additions                                                                    --
Dispositions (5)                                                     (6,507,325)
                                                                    -----------

Balance at end of year                                              $        --
                                                                    ===========

(3)      A reconciliation of accumulated depreciation for the years ended
         December 31, 2004 is as follows:



Balance at beginning of year                                        $ 3,016,583
Dispositions (5)                                                     (3,016,583)
                                                                    -----------

Balance at end of year (4)                                          $        --
                                                                    ===========

(4)      Balance applies entirely to buildings and improvements.

(5)      Sale of Perrymont Office Building and Inducon Amherst in 2004.




















                                      F-13