FORM 10-K/A

                                AMENDMENT TO 10-K
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
(Mark One)

        (X)    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
               THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
                      For the Fiscal Year Ended December 31, 1997

        ( )    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
               OF THE SECURITIES  AND EXCHANGE ACT OF 1934.  (NO FEE
               REQUIRED)

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
Suite 12-A
Getzville, New York  14068
(Address of Principal Executive Office)
<TABLE>
<CAPTION>
<S>                                                             <C>
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
</TABLE>

Indicate by a check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No_____

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)

                       DOCUMENTS INCORPORATED BY REFERENCE
        See page 13 for a list of all documents incorporated by reference

                                       1
<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
an Agreement and Certificate of Limited Partnership (the "Partnership
Agreement"), under the Revised Delaware 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 limited
partners. The Partnership's investment objectives are to (1) provide a return of
capital plus capital gains from the sale of appreciated properties; (2) provide
partners with cash distributions until properties are sold; (3) preserve and
protect partners capital and; (4) achieve a build-up of equity through the
reduction of mortgage loans.

        In November 1997, the Partnership acquired an additional 50% interest in
Inducon Amherst through a buyout of the other joint venturer. At December 31,
1997, the Partnership owned 100% of the property.

        As of December 31, 1997, the Partnership owned one (1) apartment complex
with 280 units and two office buildings with 124,960 total square feet of
rentable space. Each of the complexes is managed for the Partnership by Realmark
Corporation, an affiliate of the General Partners.

        In December 1997, the Partnership sold the Castle Dore Apartments, a 190
unit apartment complex located in Indianapolis, IN. The Castle Dore Apartments
were purchased in February 1985. The sale of the property generated a gain for
financial statement purposes of $3,095,376 for the period ended December 31,
1997.


        Occupancy for each complex as of December 31, 1997, 1996 and 1995 was as
follows:

                                                1997        1996          1995
                                                ----        ----          ----

Castle Dore                                       -          96 %          96 %
Williamsburg South                                -           -            97 %
Pleasant Run                                      -           -            90 %
Ambassador Towers (formerly Cedar Ridge)         80 %        90 %          85 %
Perrymont                                        68 %        63 %          65 %
Inducon Amherst                                  91 %         -             -


                                        2
<PAGE>


ITEM 1:  BUSINESS (Con't.)
--------------------------

        For financial statement purposes, the operations of the Partnership's
properties are consolidated. The following chart lists the percentage of total
Partnership revenue generated by each complex for the year indicated:

                                                  1997       1996         1995
                                                  ----       ----         ----

Castle Dore                                        35 %       24 %         24 %
Williamsburg South                                  -         24 %         21 %
Pleasant Run                                        -         15 %         16 %
Ambassador Towers (formerly Cedar Ridge)           51 %       32 %         33 %
Perrymont                                          11 %        5 %          6 %
Inducon Amherst                                     3 %        -            -

        The business of the Partnership is not seasonal. As of December 31,
1997, 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, 1997 were employees of the Corporate General
Partner or its affiliates.


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

Following is a listing of properties and joint ventures owned by the Partnership
at December 31, 1997:
<TABLE>
<CAPTION>

     Name
     ----
and Location                        General Character of Property                            Purchase Date
------------                        -----------------------------                            -------------
<S>                                                    <C>                                          <C>
Ambassador Towers                   Apartment complex; 6 buildings on                      December 1985
(formerly Cedar                     11.6 acres; 280 units. The outstanding
Ridge Apts.)                        mortgage balance at December 31, 1997
Monroeville, PA                     was $3,095,284. The mortgage calls for
                                    payments of interest only at a variable rate
                                    through August 1998 and monthly installments
                                    of principal and interest thereafter through
                                    maturity at February 2004.

Perrymont Office Bldg.              Office building; one building on 2.3                     August 1985
McCandless, PA                      acres; 40,000 square feet. The outstanding
                                    mortgage balance at December 31, 1997
                                    was $1,259,701. The mortgage provides
                                    for monthly payments of $10,187, including
                                    interest at 8.5%. The mortgage is scheduled to
                                    mature January 1999. As of December 31, 1997,
                                    the property was in default of its mortgage and
                                    was assigned a receiver by the lender. As discussed
                                    in Notes 4 and 12, the mortgage obligation was
                                    satisfied in April, 1998


                                        3

<PAGE>

ITEM 2: PROPERTIES (Con't.)
------  -------------------

     Name
     ----
and Location                        General Character of Property                            Purchase Date
------------                        -----------------------------                            -------------

Inducon Amherst                     Four office/warehouse buildings on                       June 1985
Amherst, NY                         4 acres with approximately 84,960
                                    square feet of rentable space. The
                                    outstanding mortgage balance at December 31,
                                    1997 was $1,861,778. The mortgage requires
                                    monthly payments of principal and interest
                                    of $15,250 at a rate of 8.62%. The mortgage
                                    matures March 2022.

</TABLE>


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

        The Partnership is not a party to, nor are any of the Partnership's
properties the subject of, any material pending legal proceedings.



ITEM 4: SUBMISSION 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 established trading market for the units of
Limited Partnership Interest of the Partnership and it is not anticipated that
any will develop in the future.

        There were no distributions during the years ended December 31, 1997,
1996 and 1995. Management hopes to make distributions in the coming year.

        As of December 31, 1997, there were 1,954 record holders of units of
Limited Partnership Interest.


                                       4
<PAGE>
<TABLE>
<CAPTION>

ITEM 6:  SELECTED FINANCIAL DATA
------   -----------------------
                                               Realmark Properties Investors Limited Partnership-III
                                               -----------------------------------------------------

                                Year Ended        Year Ended         Year Ended        Year Ended        Year Ended
                              Dec. 31, 1997      Dec. 31, 1996     Dec. 31, 1995     Dec. 31, 1994     Dec. 31, 1993
                            -----------------------------------------------------------------------------------------
<S>                          <C>               <C>                <C>               <C>               <C>
Total assets                 $  10,757,121     $    8,869,221     $  12,403,691     $  13,195,397     $  13,757,093
                            ==============    ===============    ==============    ==============    ==============

Notes payable and
  long-term obligations      $   6,216,763     $    5,431,000     $  10,276,248     $  10,492,540     $  10,408,867
                            ==============    ===============    ==============    ==============    ==============

-------------------------------------------------------------------------------------------------------------------

Revenue                       $  3,115,179     $    4,429,043     $   4,632,199      $  4,505,896      $  4,642,864

Expenses                         4,196,309          5,357,211         5,931,484         5,549,133         5,586,582

Loss from
  joint venture                   (213,416)          (142,165)          (93,698)         (164,510)          (69,136)
                            --------------    ---------------    --------------    --------------    --------------

Loss from
  operations                    (1,294,546)        (1,070,333)       (1,392,983)       (1,207,747)       (1,012,854)

Gain on sale of property         3,095,376          3,501,323                 -                 -                 -
                            --------------    ---------------    --------------    --------------    --------------

Net income (loss)            $   1,800,830     $    2,430,990     $  (1,392,983)     $ (1,207,747)     $ (1,012,854)
                            ==============    ===============    ==============    ==============    ==============

--------------------------------------------------------------------------------------------------------------------

Net cash (used in)
  provided by operating
  activities                  $   (749,357)    $     (275,818)    $    (229,343)    $    (406,562)    $   (169,323)

Proceeds from mortgage
  receivable                             -                  -                 -                 -        2,400,000

Proceeds from refinancing        5,813,000                  -                 -         2,250,000                -

Principal payments upon
  refinancing                   (4,803,977)                 -                 -        (1,987,220)               -

Principal payments upon
  sale                          (2,240,764)        (4,592,357)                -                 -                -

Principal payments on
  long-term debt                  (554,380)          (313,548)         (282,015)         (243,096)      (2,317,436)
                            --------------    ---------------    --------------    --------------    --------------

Net cash (used in) provided
  by operating activities
  less principal payments     $ (2,535,478)     $  (5,181,723)     $   (511,358)     $   (386,878)     $    (86,759)
                            ==============    ===============    ==============    ==============    ==============

-------------------------------------------------------------------------------------------------------------------

Income (loss) per limited
  partnership unit            $     105.38      $      141.68      $     (86.89)     $     (75.33)     $     (63.18)
                            ==============    ===============    ==============    ==============    ==============

Distributions per limited
  partnership unit            $          -      $           -      $          -      $          -      $       4.33
                            ==============    ===============    ==============    ==============    ==============

Weighted average number
  of Limited Partnership
  units outstanding                 15,551             15,551            15,551            15,551            15,551
                            ==============    ===============    ==============    ==============    ==============

-------------------------------------------------------------------------------------------------------------------
</TABLE>

                                        5

                       See notes to financial statements

<PAGE>


ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
------  -----------------------------------------------------------------------
        OF OPERATIONS
        -------------

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

        The Partnership has been able, due to the sales of the three properties
in the last two years, to maintain sufficient cash to enable it to not only fund
current operations, but also to provide for future capital improvements. The
Partnership made no distributions during 1997. Management hopes to make
distributions in the coming year once the capital improvement work scheduled at
the properties is either completed or the full costs may be measured. In the
beginning of April 1998, management paid off the entire principal balance on the
Perrymont Building. This mortgage was in default and the lender was threatening
to begin foreclosure procedures. As a result of the payoff of the outstanding
mortgage, the lender gave the Partnership a sizable discount on the mortgage. A
gain will be recognized in 1998 due to this extinguishment of debt.

        Management was successful in negotiating the sale of Castle Dore
Apartments, which closed in late 1997. Castle Dore sold on December 11, 1997 for
a price of $5,160,000. After considering the expenses associated with the sale
of approximately $174,000, the Partnership recognized a gain of $3,095,376 from
such sale. This sale was felt to be in the best interests of the Limited
Partners.

        Ambassador Towers Apartment complex came under contract for sale during
1997. The sale was subject to a number of contingencies and was cancelable at
any time by the buyer. During 1997, the contract for sale of Ambassador Towers
expired. In January of 1998, a contract for the sale of the Perrymont Office
Building was signed. The contract had a sales price of $1,750,000. The contract
was soon after canceled by the potential buyer. The General Partners feel,
however, that the sales of these properties are in the best interest of the
Limited Partners, so management continues to look for potential buyers through
marketing in trade journals, newspapers, etc.

        During November of 1997, the Partnership acquired the remaining interest
in Inducon Amherst Office/Warehouse complex. Prior to this time, the Partnership
had a 50% interest in this commercial property. The property's operations are
included in the Partnership's financial statements beginning in November 1997.
The property's financial statements are presented for informational purposes in
Note 6 to these financial statements.

        The Partnership has conducted a review of its computer systems to
identify the systems that could be affected by the "year 2000 issue" and has
substantially developed an implementation plan to resolve such issues.

        The year 2000 issue is the result of computer programs being written
using two digits rather than four digits to define the applicable year. Computer
programs that have time-sensitive software may recognize a date using "00" as
the year 1900 rather than the year 2000. This could result in a system failure
or miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions, send invoices, or engage
in similar normal business activities. Management has confirmed with its
software providers that all software currently in use is either "2000 compliant"
or will be with little adaptation and at no significant cost.


                                       6
<PAGE>


ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
------  -----------------------------------------------------------------------
        OF OPERATIONS (Con't.)
        ----------------------

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

        For the year ended December 31, 1997, the Partnership earned net income
of $1,800,830 or $105.38 per limited partnership unit. The income is a result of
the previously discussed sale of Castle Dore Apartments located in Louisville,
Kentucky. The Partnership had a net loss before the gain recognized upon the
sale of $1,294,546. This compares to the years ended December 31, 1996 when the
Partnership had net income of $2,430,990 (again, the net income was the result
of the sale of properties) or $141.68 per limited partnership unit and 1995 when
the loss incurred totaled $1,392,983 or $86.89 per limited partnership unit.

        Partnership revenues for the year ended December 31, 1997 totaled
$3,115,179, consisting of rental income of $2,828,947 and other income, which
includes interest, laundry income, and other miscellaneous sources of income of
$286,232. The decrease in rental revenue from that of the two previous years may
be attributed to several factors: 1) in both 1995 and 1996, the Partnership
owned two more residential apartment complexes which were reporting income; 2)
the low occupancy levels throughout much of the year at Ambassador Towers; and
3) the recurrent struggle with low occupancy at Perrymont. Rental revenues in
the year ended December 31, 1996 amounted to $4,004,140 and in the year ended
December 31, 1995 totaled $4,336,896. There was a considerable increase in other
income during the year ended December 31, 1996, in part due to real estate tax
refunds received for tax appeals at Ambassador Towers. Increasing occupancy, as
well as decreasing delinquencies, remains the major focus of management.

        Partnership expenses for the year ended December 31, 1997 totaled
$4,196,309, a significant decrease from the expenses for the years ended
December 31, 1996 and 1995 which were $5,357,211 and $5,931,484, respectively.
Again, the Partnership has two less properties contributing to the total
expenses for 1997 as compared to 1995 and 1996. The most prominent decrease can
be seen in property operations. There was a decrease of approximately $721,010
between the years ended December 31, 1997 and 1996. This is mostly attributable
to the sale of the two properties during 1996. Management has continued to
exercise strict cost controlling factors over operations related expenses.
Interest expense paid to other than affiliates increased over $161,000 due to
the unamortized discount on the Castle Dore mortgage being written off upon the
refinancing of the mortgage on the property. Administrative expenses, other than
those paid to affiliates, totaled $229,622 for 1997; this is a decrease of
almost $209,000 as compared to the year ended December 31, 1996 when they
totaled $438,560. Again, the decrease is primarily due to the sale of the two
properties at the end of 1996. The decrease in administrative expenses paid to
affiliates is similarly the result of the sale and refinancing of the
properties.

        Management has plans to use the cash received from the sales to make
necessary improvements to the remaining properties in the Partnership.
Improvements such as interior and exterior painting, new carpets and appliances,
and roof and paving repairs are all scheduled for the coming year. Management
feels these improvements are needed to attract new tenants as well as to retain
existing tenants.

                                      7
<PAGE>


ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
------  -----------------------------------------------------------------------
        OF OPERATIONS (Con't.)
        ----------------------

Results of Operations (Con't.):
------------------------------

        Inducon Amherst generated a net loss of $167,379 for the year ended
December 31, 1997 as compared to the losses which resulted in the years ended
December 31, 1996 and 1995 of $149,647 and $98,629, respectively. In November
1997, the Partnership acquired an additional 50% interest in Inducon Amherst
through a buyout of the other joint venturer who in the opinion of the General
Partner was not paying proper attention to the leasing of the property. At
December 31, 1997, the Partnership owned 100% of the property. For the year
ended December 31, 1997, the loss from Inducon Amherst was allocated $158,128 to
the Partnership and $9,251 to the other venturer who existed up until November
of 1997. The loss incurred in both 1996 and 1995 was allocated in accordance
with the joint venture agreement; 95% of the losses were passed through to the
Partnership and the remaining 5% was allocated to other joint venture partner.

        For the year ended December 31, 1997, the tax basis income was
$2,135,244 or $133.19 per limited partnership unit compared to a tax basis
income of $2,940,564 or $183.42 per unit for the year ended December 31, 1996
and a tax loss of $1,154,994 or $72.04 per limited partnership unit for the year
ended December 31, 1995. The gain for tax purposes resulting from the sale of
Castle Dore Apartments totaled $4,003,583. The gain reported in 1996 from the
sale of Williamsburg South and Pleasant Run for tax purposes amounted to
$4,467,961.


ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
------  -------------------------------------------
        Listed under Item 14 of the report.


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

        None.



                                       8
<PAGE>
                                    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 March 1, 1998, are listed below. Each director
is subject to election on an annual basis.


                               Title of All Positions             Year First
Name                           Held With the Company           Elected Director
----                           ----------------------          ----------------
Joseph M. Jayson               President and Director                 1979

Judith P. Jayson               Vice President and Director            1979

Michael J. Colmerauer          Secretary


        Joseph M. Jayson, President and Director of Realmark Properties, Inc.
and Judith P. Jayson, Vice President and Director of Realmark Properties, Inc.,
are married to each other.

        The Director 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 59, is Chairman and Director and sole stockholder
of J.M. Jayson & Company, Inc. and certain of its affiliated companies:
Westmoreland Capital Corporation, Oilmark Corporation and U.S. Energy
Development Corporation. In addition, Mr. Jayson is President and Director of
Realmark Corporation and Realmark Properties, Inc., wholly owned subsidiaries of
J.M. Jayson & Company, Inc. and co-General Partner of Realmark Properties
Investors Limited Partnership, Realmark Properties Investors Limited
Partnership-II, Realmark Properties Investors Limited Partnership-III, Realmark
Properties Investors Limited Partnership-IV, Realmark Properties Investors
Limited Partnership-V, Realmark Properties Investors Limited Partnership-VI A
and Realmark Properties Investors Limited Partnership-VI B. Mr. Jayson is a
member of the Investment Advisory Board of the Corporate General Partner. Mr.
Jayson has been engaged in real estate business for the last 35 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 35 years been engaged in various aspects
of real estate brokerage and investment. He brokered residential properties from
1962 to 1964, commercial and 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 in forming, over 30 real estate related limited partnerships. For
the past sixteen years, Mr. Jayson and J.M. Jayson & Company, Inc. and an
affiliate have also engaged in developmental drilling for gas and oil.

                                       9

<PAGE>


        Judith P. Jayson, age 58, is currently Vice-President and 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 36 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. Mrs. Jayson is the wife of
Joseph M. Jayson, the Individual General Partner.

        Michael J. Colmerauer, 39, is Secretary and in-house legal counsel for
J.M. Jayson & Company, Inc., Realmark Corporation, Realmark Properties, Inc. and
other companies affiliated with the General Partners. He received a Bachelor's
Degree (BA) from Canisius College in 1980 and a Juris Doctors (J.D.) from the
University of Tulsa in 1983. Mr. Colmerauer is a member of the American and Erie
County Bar Association and has been employed by the Jayson group of companies
for the last 14 years.


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) for its fiscal
years ended December 31, 1997, 1996 and 1995 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 years ended
December 31, 1997, 1996 and 1995.

        The following table sets forth for the years ended December 31, 1997,
1996 and 1995 the compensation paid by the Partnership, directly or indirectly,
to affiliates of the General Partners:

<TABLE>
<CAPTION>


      Entity Receiving                       Type of
        Compensation                       Compensation                   1997              1996             1995
        ------------                       ------------                   ----              ----             ----
<S>                             <C>                                  <C>                <C>              <C>
Realmark Properties, Inc.
  (The Corporate
  General Partner)              Interest charged on
                                  accounts payable -
                                  affiliates                              $  49,087        $  149,954     $    101,378
                                                                     --------------     -------------     ------------

                                Reimbursements for
                                allocated expenses of the
                                General Partners:
                                  Investor Services Fees                     17,580            18,746            8,731
                                  Brokerage                                  15,434            11,936           13,353
                                  Portfolio Management
                                    & Accounting Fees                       108,835           147,690          247,152

Realmark Corporation            Property Management Fees                    150,726           217,095          227,134
                                Computer Service Fees                         8,640            14,040           14,040
                                                                     --------------   ---------------   --------------
                                                                            301,215           409,507          510,410
                                                                     --------------   ---------------   --------------
                                Total                                 $     350,302    $      559,461    $     611,788
                                                                     ==============   ===============   ==============
</TABLE>

                                       10
<PAGE>


        The Corporate General Partner is entitled to a continuing Partnership
Management Fee equal to 7% of net cash flow (as defined in the Partnership
Agreement), of which 2% is subordinated to the receipt by the Limited Partners
of a noncumulative annual cash return equal to 7% of the average of their
adjusted capital contributions (as defined in the Partnership Agreement). The
Corporate General Partner is paid its 5% Partnership Management Fee annually as
cash flow allows. The 2% subordinated fee will not be paid or accrued until such
time as the Limited Partners have received their 7% return and payment of the
fee becomes probable. The General Partners are also entitled to 3% of
Distributable Cash (as defined in the Partnership Agreement) and to certain
expense reimbursements with respect to Partnership operations.

        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 sale 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 a
cumulative amount equal to their capital contributions. The fees earned on the
sale of Bryn Mawr Apartments in 1986 and Parc Bordeau Apartments in 1988 and the
two properties in the current year will not be recorded as a liability in the
Partnership's financial statements until such time as payment is probable.


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 five percent (5%) of the Units of Limited Partnership Interest of the
Partnership. Excluding the General Partners' interest in the Partnership ($1,000
initial capital contribution), the General Partners as of December 31, 1997
owned no Units of Limited Partnership Interest.


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

        (a)    Transactions with Management and Others.
               ---------------------------------------

        No transactions have occurred between the Partnership and those in the
management of Realmark Properties, Inc. All transactions between the Partnership
and Realmark Properties, Inc. (the Corporate General Partner) and any other
affiliated organization are described in Item 11 of this report and in Notes 6
and 7 to the financial statements.


                                       11


<PAGE>


ITEM 14:       EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON
-------        --------------------------------------------------------
               FORM 8-K.
               ---------
<TABLE>
<CAPTION>

        (a)    Financial Statements and Schedules.
               -----------------------------------

               FINANCIAL STATEMENTS                                                    PAGE
               --------------------                                                    ----
<S>                                                                                      <C>
               (i)    Independent Auditors' Report                                       14
               (ii)   Balance Sheets at December 31, 1997 and 1996                       15
               (iii)  Statements of Operations for the years ended
                        December 31, 1997, 1996 and 1995                                 16
               (iv)   Statements of Partners' Capital (Deficit) for the
                        years ended December 31, 1997, 1996 and 1995                     17
               (v)    Statements of Cash Flows for the years ended
                        December 31, 1997, 1996 and 1995                                 18
               (vi)   Notes to Financial Statements                                    19 - 31

               FINANCIAL STATEMENT SCHEDULES
               -----------------------------

               (i)    Schedule II - Valuation and Qualifying Accounts                    32
               (ii)   Schedule III - Real Estate and Accumulated Depreciation          33 - 34
</TABLE>

        All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or the notes thereto.

        (b) Reports on Form 8-K.
            -------------------

               None

        (c)    Exhibits
               --------

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

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

                                       12

<PAGE>


ITEM 14:       EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND
-------        ---------------------------------------------
               REPORTS ON FORM 8-K (Con't.).
               ----------------------------

10.     Material contracts

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

               (b)    Partnership Agreement included with the Registration
                      Statement of the Registrant as filed and amended to date
                      incorporated herein by reference.

               (c)    Partnership sales agreements with unrelated third-parties
                      included with the 1996 third quarter Form 10Q incorporated
                      herein by reference.






                                       13


<PAGE>

INDEPENDENT AUDITORS' REPORT


The Partners
Realmark Property Investors Limited Partnership - III:

We have audited the accompanying balance sheets of Realmark Property Investors
Limited Partnership-III as of December 31, 1997 and 1996, and the related
statements of operations, partners' capital (deficit), and cash flows for each
of the three years in the period ended December 31, 1997. Our audits also
included the financial statement schedules listed in the Index at Item 14. These
financial statements and financial statement schedules are the responsibility of
the General Partners. Our responsibility is to express an opinion on the
financial statements and the financial statement schedules based on our audits.

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

In our opinion, such financial statements present fairly, in all material
respects, the financial position of Realmark Property Investors Limited
Partnership-III at December 31, 1997 and 1996 and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
1997 in conformity with generally accepted accounting principles. Also, in our
opinion, such financial statement schedules, when considered in relation to the
basic financial statements taken as a whole, present fairly in all material
respects the information set forth therein.



April 11, 1998


                                       14
<PAGE>
<TABLE>
<CAPTION>

                                     REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-III
                                     ---------------------------------------------------
                                                       BALANCE SHEETS
                                                       --------------
                                                 DECEMBER 31, 1997 AND 1996
                                                 --------------------------


Assets                                                                                       1997                  1996
------                                                                                 ----------------     -----------------
<S>                                                         <C>
Property, at cost (including assets held for sale, see Note 3):
  Land                                                                                   $      777,709        $      935,000
  Buildings and improvements                                                                 10,649,818            10,032,459
  Furniture and fixtures                                                                        959,752             1,481,974
                                                                                       ----------------     -----------------
                                                                                             12,387,279            12,449,433
  Less accumulated depreciation                                                               5,544,716             5,837,777
                                                                                       ----------------     -----------------
      Property, net                                                                           6,842,563             6,611,656

Investment in joint venture                                                                           -                25,156

Cash                                                                                            857,649             1,811,962
Cash - security deposits                                                                              -                56,086
Investments in mutual funds                                                                   2,507,650                     -
Trade accounts receivable, net of allowance for doubtful accounts
  of $431,151 and $584,097 for 1997 and 1996, respectively                                       35,942                    69
Other assets                                                                                    513,317               364,292
                                                                                       ----------------     -----------------

           Total Assets                                                                 $    10,757,121      $      8,869,221
                                                                                       ================     =================


Liabilities and Partners' (Deficit) Capital
-------------------------------------------

Liabilities:
  Mortgages payable                                                                     $     6,216,763     $       5,431,000
  Accounts payable and accrued expenses                                                         192,702               713,233
  Accounts payable - affiliates                                                                  35,707               208,156
  Interest payable                                                                              199,407               100,327
  Security deposits and prepaid rents                                                           184,878               289,671
                                                                                       ----------------     -----------------
           Total Liabilities                                                                  6,829,457             6,742,387
                                                                                       ----------------     -----------------

Partners' (deficit) capital:
  General partners                                                                              (37,625)             (199,668)
  Limited partners                                                                            3,965,289             2,326,502
                                                                                       ----------------     -----------------
           Total Partners' (Deficit) Capital                                                  3,927,664             2,126,834
                                                                                       ----------------     -----------------

           Total Liabilities and Partners' (Deficit) Capital                            $    10,757,121      $      8,869,221
                                                                                       ================     =================

</TABLE>

                        See notes to financial statements

                                       15

<PAGE>
<TABLE>
<CAPTION>


                                     REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-III
                                     ---------------------------------------------------
                                                  STATEMENTS OF OPERATIONS
                                                  ------------------------
                                    FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
                                    ----------------------------------------------------


                                                                        1997                  1996                 1995
                                                                   ----------------      ----------------     ----------------
<S>                                                               <C>                   <C>                   <C>
Income:
  Rental                                                           $     2,828,947       $     4,004,140       $    4,336,896
  Interest and other                                                       286,232               424,903              295,303
                                                                  ----------------      ----------------     ----------------
  Total income                                                           3,115,179             4,429,043            4,632,199
                                                                  ----------------      ----------------     ----------------

Expenses:
  Property operations                                                    1,863,882             2,584,892            2,966,198
  Interest:
    Paid to affiliates                                                      49,087               149,954              101,378
    Other                                                                1,326,226             1,165,193            1,137,438
  Depreciation and amortization                                            426,277               609,105              779,951
  Administrative:
    Paid to affiliates                                                     301,215               409,507              510,410
    Other                                                                  229,622               438,560              436,109
                                                                  ----------------      ----------------     ----------------
  Total expenses                                                         4,196,309             5,357,211            5,931,484
                                                                  ----------------      ----------------     ----------------

Loss before allocated loss from joint venture
  and gain on sale of properties                                        (1,081,130)             (928,168)          (1,299,285)

Allocated loss from joint venture                                         (213,416)             (142,165)             (93,698)

Gain on sale of properties                                               3,095,376             3,501,323                    -
                                                                  ----------------      ----------------     ----------------

Net income (loss)                                                 $      1,800,830        $    2,430,990       $   (1,392,983)
                                                                  ================      ================     ================

Income (loss) per limited partnership unit                        $         105.38        $       141.68       $       (86.89)
                                                                  ================      ================     ================


Distributions per limited partnership unit                        $              -        $            -       $            -
                                                                  ================      ================     ================

Weighted average number of limited partnership
  units outstanding                                                         15,551                15,551               15,551
                                                                  ================      ================     ================


</TABLE>
                        See notes to financial statements


                                       16

<PAGE>
<TABLE>
<CAPTION>


                                  REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-III
                                  ---------------------------------------------------
                                       STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
                                       -----------------------------------------
                                  FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
                                  ----------------------------------------------------


                                                  General                 Limited Partners
                                                 Partners                 ----------------
                                                  Amount             Units               Amount
                                                  ------             -----               ------
<S>                                           <C>                 <C>                <C>
Balance, January 1, 1995                      $     (385,610)     $    15,551        $      1,474,437

Net loss                                             (41,789)               -              (1,351,194)
                                             ----------------     -----------      ------------------

Balance, December 31, 1995                          (427,399)          15,551                 123,243

Net income                                           227,731                -               2,203,259
                                             ----------------     -----------      ------------------

Balance, December 31, 1996                          (199,668)          15,551               2,326,502

Net income                                           162,043                -               1,638,787
                                            ----------------      -----------      ------------------

Balance, December 31, 1997                    $      (37,625)      $   15,551      $        3,965,289
                                            ================      ===========      ==================

</TABLE>


                        See notes to financial statements




                                       17

<PAGE>
<TABLE>
<CAPTION>

                                     REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-III
                                     ---------------------------------------------------
                                                  STATEMENTS OF CASH FLOWS
                                                  ------------------------
                                    FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
                                    ----------------------------------------------------


                                                                         1997                 1996                 1995
                                                                    ----------------     ----------------     ----------------
<S>                                                               <C>                   <C>                    <C>
Cash Flows from operating activities:
  Net income (loss)                                                 $     1,800,830       $    2,430,990        $  (1,392,983)

  Adjustments to reconcile net loss to net cash used
    in operating activities:
    Depreciation and amortization                                           426,277              609,105              779,951
    Amortization of mortgage discounts                                      706,399               60,657               65,723
    Loss from joint venture                                                 213,416              142,165               93,698
  Gain on sale of properties                                             (3,095,376)          (3,501,323)                   -
  Changes in operating assets and liabilities:
    Cash - security deposits                                                 56,086               (2,097)              (1,664)
    Trade accounts receivable                                               (35,873)              21,169               13,518
    Other assets                                                           (116,369)              (3,280)              69,355
    Accounts payable and accrued expenses                                  (673,389)             (64,743)             184,183
    Interest payable                                                         85,233               11,459                 (482)
    Security deposits and prepaid rents                                    (116,591)              20,080               25,081
                                                                   ----------------     ----------------     ----------------
Net cash used in operating activities                                      (749,357)            (275,818)            (163,620)
                                                                   ----------------     ----------------     ----------------

Cash flows from investing activities:
  Property acquisitions and additions                                      (147,142)              (7,307)            (171,686)
  Proceeds from dispositions of properties                                4,986,608            8,088,000                    -
  Buyout of investment in joint venture                                     (55,000)                   -                    -
  Investments in mutual funds                                            (2,507,650)                   -                    -
                                                                   ----------------     ----------------     ----------------
Net cash provided by (used in) investing activities                       2,276,816            8,080,693             (171,686)
                                                                   ----------------     ----------------     ----------------

Cash flows from financing activities:
  (Decrease) increase in cash overdraft                                           -              (36,921)              36,921
  (Decrease) increase in accounts payable - affiliates                     (695,651)          (1,050,087)             571,866
  Proceeds from mortgage refinancing                                      5,813,000                    -                    -
  Principal payments at mortgage refinancing                             (4,803,977)                   -                    -
  Principal payments at sale of property                                 (2,240,764)          (4,592,357)                   -
  Principal payments on mortgages                                          (554,380)            (313,548)            (282,015)
                                                                   ----------------     ----------------     ----------------
Net cash (used in) provided by financing activities                      (2,481,772)          (5,992,913)             326,772
                                                                   ----------------     ----------------     ----------------

(Decrease) increase in cash                                                (954,313)           1,811,962               (8,534)

Cash - beginning of year                                                  1,811,962                    -                8,534
                                                                   ----------------     ----------------     ----------------

Cash - end of year                                                 $        857,649     $      1,811,962     $              -
                                                                   ================     ================     ================
</TABLE>
                        See notes to financial statements

                                       18


<PAGE>

               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-III
               ---------------------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
              FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 and 1995
              ----------------------------------------------------


1.      FORMATION AND OPERATION OF PARTNERSHIP:
        --------------------------------------

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

        In February 1984, the Partnership commenced the public offering of units
of limited partnership interest. Other than matters relating to organization, it
had no business activities and, accordingly, had not incurred any expenses or
earned any income until the first interim closing of the public offering of
limited partnership units, which occurred on April 26, 1984. All items of income
and expense arose subsequent to this date. The maximum offering of the
Partnership was $20,000,000 (20,000 units). The offer terminated January 31,
1985 with gross offering proceeds of $15,551,000 (15,551 units). The General
Partners are Realmark Properties, Inc., a wholly-owned subsidiary of J.M. Jayson
& Company, Inc. (JMJ) and Joseph M. Jayson, the Individual General Partner.
Joseph M. Jayson is the sole shareholder of JMJ.

        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 (see Note 7).

        The partnership agreement also provides that distribution of funds,
revenues, costs and expenses arising from partnership activities, exclusive of
any sale or refinancing activities, are to be allocated 97% to the Limited
Partners and 3% to the General Partners. Net income or losses and proceeds
arising from a sale or refinancing shall be distributed first to the Limited
Partners in amounts equivalent to a 7% return on their average adjusted capital
balances, plus an amount equal to their capital contributions. The Agreement
also provides for payment of property disposition fees to Realmark Properties,
Inc., prior to additional distributions to limited partners in amounts
equivalent to 5% of their average adjusted capital balances. Additional proceeds
shall then be allocated to all partners in amounts equal to their respective
positive capital account balances and the remainder, if any, in the ratio of 87%
to the Limited Partners and 13% to the General Partners. Income and losses from
the sale(s) of properties is to be allocated first to the Limited Partners to
the extent they receive their average adjusted capital balances plus a
preferential return of 7% and an additional 5%; after this, the income is to be
allocated 87% to the Limited Partners and 13% to the General Partners.


2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
        -------------------------------------------

        (a)    Use of Estimates
               -----------------
        The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

                                       19

<PAGE>

               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-III
               ---------------------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                   (Continued)
                                   -----------


2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Con't.):
        ---------------------------------------------------

        (b)    Property and Depreciation
               -------------------------

        Depreciation is provided using the straight-line method over the
estimated useful lives of the respective assets. The estimated useful lives of
the Partnership's assets range from 5 to 25 years. Depreciation expense totaled
$232,606, $449,241 and $732,342 for the years ended December 31, 1997, 1996 and
1995, respectively. For further discussion, see Footnote No. 3.

Expenditures for maintenance and repairs are expensed as incurred, and major
renewals and betterments are capitalized.

The Accelerated Cost Recovery System and Modified Accelerated Cost Recovery
System are used to calculate depreciation expense for tax purposes.

        (c)    Rental Income
               -------------

        Leases for residential properties have terms of one year or less.
Commercial leases generally have terms of one to five years. Rental income is
recognized on the straight line method over the term of the lease.

        (d)    Cash
               ----

        For purposes of reporting cash flows, cash includes the following items:
cash on hand; cash in checking; and money market savings.

        (e)    Cash - Security Deposits
               ------------------------

        Cash - security deposits represents cash on deposit at Castle Dore, in
accordance with terms of a U.S. Department of Housing and Urban Development
(HUD) regulatory agreement for Multi-Family Housing Projects under Section
223(f).

        (f)    Interest in Joint Venture
               -------------------------

        The Partnership's interest in affiliated joint venture is accounted for
on the equity method.

        (g)    Investments in Mutual Funds
               ---------------------------

        The investments in mutual funds are stated at fair value, which
approximates cost, at December 31, 1997.


                                       20


<PAGE>

               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-III
               ---------------------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                   (Continued)
                                   -----------


3.      ACQUISITION AND DISPOSITIONS OF RENTAL PROPERTY:
        -----------------------------------------------

        In August 1984, the Partnership acquired a 112 unit apartment complex
(Bryn Mawr) located in Ypsilanti, Michigan, for a purchase price of $1,833,554,
which included $134,857 in acquisition fees.

        In February 1985, the Partnership acquired a 190 unit apartment complex
(Castle Dore), located in Indianapolis, Indiana for a purchase price of
$3,711,683, which included $414,279 in acquisition fees. In connection with this
acquisition, the Partnership assumed a mortgage of approximately $2,578,000. The
mortgage bears interest at 7.5% and matures on September 1, 2014.

        In February 1985, the Partnership acquired a 208 unit apartment complex
(Parc Bordeaux), located in Indianapolis, Indiana, for a purchase price of
$3,845,064, which included $371,233 in acquisition fees.

        In June 1985, the Partnership acquired a 200 unit apartment complex
(Williamsburg South Apartments) located in Atlanta, Georgia, for a purchase
price of $4,764,200, which included $368,745 in acquisition fees. In connection
with this acquisition, the Partnership obtained from the seller a Purchase Money
Mortgage in the amount of $3,300,000.

        In August 1985, the Partnership acquired an office complex containing
approximately 40,000 net rentable square feet (Perrymont Office Building)
located in Pittsburgh, Pennsylvania, for a purchase price of $2,078,697, which
included $168,697 in acquisition fees.

        In November 1985, the Partnership acquired a 130 unit apartment complex
(Pleasant Run Farms) located in Cincinnati, Ohio, for a purchase price of
$3,434,728, which included $267,228 in acquisition fees.

        In December 1985, the Partnership acquired a 280 unit apartment complex
(Ambassador Towers, formerly Cedar Ridge) located in Monroeville, Pennsylvania
for a purchase price of $6,423,391, which included $646,424 in acquisition fees.

        In August 1986, the Partnership sold the Bryn Mawr Apartments for a sale
price of $3,110,000 which generated a total net gain for financial statement
purposes of $1,475,313. For income tax purposes, the gain was recognized under
the installment method.

        In December 1988, the Partnership sold the Parc Bordeaux Apartments for
a sale price of $5,300,000 which generated a total net gain for financial
statement purposes of $2,338,067. For income tax purposes, the gain was
recognized under the installment method.

        In December 1996, the Partnership sold the Williamsburg South Apartments
and Pleasant Run Farms Apartments for a sales price of $4,831,000 and
$3,350,000, respectively, less related fees of $93,000. The sales generated a
total net gain of $3,501,323 for financial statement purposes.

        In December 1997, the Partnership sold the Castle Dore Apartments for a
sales price of $5,160,000, less related fees of approximately $174,000. The
sales generated a total net gain of $3,095,376 for financial statement purposes.
This property contributed revenues of $1,064,908 and incurred expenses totaling
$1,612,066 during the year ended December 31, 1997.

                                       21
<PAGE>

               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-III
               ---------------------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                   (Continued)
                                   -----------

3.      ACQUISITION AND DISPOSITIONS OF RENTAL PROPERTY (Con't):
        -------------------------------------------------------

        As of December 31, 1996, the Partnership had entered into a plan to
dispose of the property, plant and equipment of Castle Dore Apartments and
Ambassador Towers. Castle Dore was sold in December 1997 (as noted above) and
the contract on Ambassador expired during 1997.

        Financial Accounting Standards Statement No. 121, Accounting for the
Impairment of Long-lived Assets and for Long-lived Assets to be Disposed Of (the
"Statement") requires that assets to be disposed of, be recorded at the lower of
carrying value or fair value, less costs to sell. The Statement also requires
that such assets not be depreciated during the disposal period, as the assets
will be recovered through sale rather than through operations. In accordance
with this Statement, the long-lived assets of the properties are recorded at the
carrying amount which is the lower of carrying value or fair value less costs to
sell, and have not been depreciated during the disposal period. Depreciation
expense, not recorded during the disposal period, for the years ended December
31, 1997 and 1996 totaled approximately $173,042 and $133,000, respectively.

4.      MORTGAGES PAYABLE:
        -----------------

        The Partnership has the following mortgages payable:

        Castle Dore
        -----------

        A 7.5% U.S. Housing and Urban Development (HUD) guaranteed mortgage
which provides for monthly principal and interest payments of $18,002 payable in
equal monthly installments through February 1, 2010. The carrying amount of the
mortgage was $0 and $1,536,666 at December 31, 1997 and 1996, respectively,
reflecting an unamortized discount of $0 for 1997 and $579,685 for 1996. The
discount is based on an imputed rate of 12.5% and is being amortized using the
interest method over the remaining term of the mortgage. This mortgage was
refinanced during 1997. This property was sold in December 1997 and the
outstanding balance of the mortgage was paid in full.

        Perrymont
        ---------

        A mortgage which provides for interest rates and monthly installments
through December 1998 is as follows:

       Year                Rate           Payment
       ----                ----           -------

       1996                7.875 %        $    9,660   (Principal and interest)
   1997 - 1998               8.5 %        $   10,187   (Principal and interest)

        The outstanding balance was $1,259,701 at December 31, 1997 and 1996.
The mortgage is scheduled to mature in January 1999. As of December 31, 1997,
the property was in default of its mortgage and was assigned a receiver by the
lender. As discussed in Note 12, the mortgage obligation was satisfied in April,
1998.

                                       22
<PAGE>

               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-III
               ---------------------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                   (Continued)
                                   -----------

3.      MORTGAGES PAYABLE (Con't.):
        --------------------------

               Ambassador Towers (formerly Cedar Ridge)
               ----------------------------------------

        A 7.75% mortgage which provided for annual principal and interest
payments of $107,760 payable in equal monthly installments through April 1,
1998. The carrying amount of the mortgage of $467,891 at December 31, 1996
reflects an unamortized discount of $42,300. The discount was based on an
imputed rate of 11% and was being amortized using the interest method over the
remaining term of the mortgage.

        An 8.75% mortgage which provided for annual principal and interest
payments of $245,460 payable in equal monthly installments through May 2004. The
carrying amount of the mortgage of $1,177,329 at December 31, 1996 reflects an
unamortized discount of $84,414. The discount was based on an imputed rate of
11% and was being amortized using the interest method over the remaining term of
the mortgage.

        A mortgage with a balance of $989,413 at December 31, 1996. The mortgage
called for principal and interest payments of $9,621 at a rate of 10.75% and was
due November 1996.

        The previous three mortgages were refinanced in March 1997 with a
variable rate mortgage for $3,263,000. This mortgage provides for payments of
interest only through August 1998 and monthly installments of principal and
interest thereafter through maturity at February 1, 2004. The interest rate is
8.275% during the first loan year and is to be adjusted at the beginning of the
second and seventh loan years to a rate equal to 2.40% plus the weekly average
yield on United States Treasury Securities, adjusted to a constant maturity of
five years. The mortgage has a balance of $3,095,284 at December 31, 1997.


               Inducon Amherst
               ---------------

        A mortgage with a balance of $1,861,778 at December 31, 1997. The
mortgage provides for monthly principal and interest payments of $15,250 at a
rate of 8.62%. The remaining balance is due March 2022.

        The above mortgages are secured by the properties to which they relate.

        The aggregate maturities of mortgages and notes payable for each of the
next five years and thereafter are as follows:

     Year                                                   Amount
     ----                                                   ------
1998                                                    $      76,172
1999                                                        1,332,694
2000                                                           98,990
2001                                                          107,698
2002                                                          117,172
Thereafter                                                  4,484,037
                                                        -------------

TOTAL                                                   $   6,216,763
                                                        =============
                                       23
<PAGE>


               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-III
               ---------------------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                   (Continued)
                                   -----------


5.      FAIR VALUE OF FINANCIAL INSTRUMENTS:
        ------------------------------------

        Statement of Financial Accounting Standards No. 107 requires disclosure
about fair value of certain financial instruments. The fair value of accounts
receivable, accounts payable, accrued expenses, deposit liabilities approximate
the carrying value due to the short-term nature of these instruments.

        Management has estimated that the fair value of the mortgage payable on
Perrymont approximates its carrying value of $1,259,701 due to its short term
nature. Such mortgage was paid off in full in March 1998. (See Note 12.)

        Management has estimated that the fair value of the mortgages payable on
Ambassador Towers and Inducon Amherst approximate their carrying values of
$3,095,284 and $1,861,778, respectively, as the mortgages were obtained in 1997.


6.      INVESTMENT IN JOINT VENTURE:
        ---------------------------

        In April 1985, the Partnership entered into an agreement and formed
Inducon Joint Venture - Amherst (the Venture), for the primary purpose of
constructing office/warehouse buildings in Erie County, New York, as
income-producing property. The site is part of the Amherst Foreign Trade Zone.
This is U.S. Customs Territory under Federal Supervision where foreign and
domestic merchandise is brought for storage, manufacture, salvage, repair,
exhibit, repacking, relabeling, and re-export. Under the terms of the Joint
Venture Agreement, the Partnership supplied capital to acquire the land and
undertake initial development, to the extent of $545,000 in Phase I and an
additional $275,000 on Phase II.

        The Other Joint Venturer delivered or completed on behalf of the Joint
Venture all plans, specifications, maps, surveys, accounting proformas for
construction, initial leasing and operations, and cost estimates with respect to
development.


                                       24
<PAGE>

        Ownership of the Joint Venture was divided equally between the
Partnership and the Other Joint Venturer. The joint venture agreement provided
that the Partnership was to be allocated 95% of any income received or loss
incurred.

        In November 1997, the Partnership acquired the interest of Delhurst
Corporation, the other joint venture partner, for $55,000. At December 31,1997,
the Partnership owned 100% of the Inducon Amherst property. The results of the
property's operations from January 1, 1997 through October 31, 1997 were
allocated in accordance with the Joint Venture agreement. The property began to
be consolidated into the Partnership's financial statements beginning November
1, 1997. Had the property been consolidated throughout 1997, it would have
contributed an additional $335,820 in revenues and caused the Partnership to
incur additional expenses of $483,734. A separate loss from the joint venture
would not have been reported as the results of the joint venture would have been
included in the revenues and expenses of the Partnership's financial statements.



                                       25
<PAGE>

               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-III
               ---------------------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                   (Continued)
                                   -----------

     6.     INVESTMENT IN JOINT VENTURE  (Con't.):
            -------------------------------------

         A summary of the assets, liabilities and partners' capital of Inducon
Joint Venture Amherst as of December 31, 1997 and 1996 and the results of
operations for the years ended December 31, 1997, 1996 and 1995 are presented
for informational purposes as follows:

<TABLE>
<CAPTION>
                                       INDUCON JOINT VENTURE AMHERST
                                       -----------------------------
                                              BALANCE SHEETS
                                              --------------
                                        December 31, 1997 and 1996
                                        --------------------------

Assets                                                                        1997                1996
------                                                                    --------------     ---------------
<S>                                                                         <C>                <C>
Land, at cost                                                               $   177,709        $    177,709
Land improvements                                                               262,257             246,232

Building                                                                      3,090,727           3,074,733
Equipment                                                                         8,466               8,466
Furniture and fixtures                                                            2,101               2,101
                                                                         --------------     ---------------
                                                                              3,541,260           3,509,241
Less accumulated depreciation                                                 1,339,394           1,205,207
                                                                         --------------     ---------------
Property, net                                                                 2,201,866           2,304,034

Cash and cash equivalents                                                             -                   -
Other assets                                                                    128,377              41,665
Deferred debt expense, net of accumulated amortization of
  $18,294 and $293,490, respectively                                            109,766              23,315
                                                                         --------------     ---------------

Total assets                                                                $ 2,440,009         $ 2,369,014
                                                                         ==============     ===============

Liabilities and Partners' (Deficit) Capital

Liabilities:
  Cash overdraft                                                            $   668,633        $     34,817
  Bonds payable                                                                       -           1,849,245

  Mortgage payable                                                            1,861,778             260,450
  Accounts payable and accrued expenses                                          43,787             128,072

  Accounts payable affiliates                                                         -              63,240
                                                                         --------------     ---------------
Total liabilities                                                             2,574,198           2,335,824
                                                                         --------------     ---------------

Partners' (Deficit) Capital:
  The Partnership                                                              (134,189)             25,156

  The Other Joint Venturer                                                            -               8,034
                                                                         --------------     ---------------
Total Partners' (Deficit) Capital                                              (134,189)             33,190
                                                                         --------------     ---------------

Total Liabilities and Partners' (Deficit) Capital                           $ 2,440,009         $ 2,369,014
                                                                         ==============     ===============
</TABLE>


                                 26

<PAGE>

               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-III
               ---------------------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                   (Continued)
                                   -----------


     6.     INVESTMENT IN JOINT VENTURE  (Con't.):

<TABLE>
<CAPTION>

                                            INDUCON JOINT VENTURE AMHERST
                                            -----------------------------
                                               STATEMENTS OF OPERATIONS
                                               ------------------------
                                 FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
                                 ----------------------------------------------------

                                                                    1997                1996                 1995
                                                               ---------------     ---------------      ---------------
<S>                                                          <C>                  <C>                 <C>
Income:
  Rental                                                       $      362,894      $      444,649       $      458,357
  Interest and other                                                   73,930              23,696               11,391
                                                              ---------------     ---------------      ---------------
  Total Income                                                        436,824             468,345              469,748
                                                              ---------------     ---------------      ---------------

Expenses:
  Property operations                                                 179,074             148,652              164,069
  Interest
    Paid to affiliates                                                  3,415               5,573                    -
    Other                                                             181,659             208,744              183,104
  Depreciation and amortization                                       155,755             191,839              187,248
  Administrative:
    Paid to affiliates                                                 24,525              20,348               27,049
    Other                                                              59,775              42,836                6,907
                                                              ---------------     ---------------      ---------------
  Total Expenses                                                      604,203             617,992              568,377
                                                              ---------------     ---------------      ---------------

Net loss                                                       $     (167,379)     $     (149,647)      $      (98,629)
                                                              ===============     ===============      ===============
</TABLE>




A reconciliation of the Partnership's investment in the joint venture is as
follows:
<TABLE>
<CAPTION>

                                                                    1997                1996                 1995
                                                               ---------------     ---------------      ---------------
<S>                                                             <C>               <C>                   <C>
Investment in joint venture at beginning of year                $     25,156      $      167,321        $     261,019
Allocation of net loss  (through October 31 for 1997)               (158,128)           (142,165)             (93,698)
Buyout of Delhurst                                                    55,000                   -                    -
Adjustment to fair value                                             (55,288)                  -                    -
Consolidation to Partnership capital                                 133,260                   -                    -
                                                             ---------------     ---------------      ---------------

Investment in joint venture at end of year                     $           -      $       25,156        $     167,321
                                                             ===============     ===============      ===============

</TABLE>
                           27
<PAGE>


               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-III
               ---------------------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                   (Continued)
                                   -----------


7.      PROPERTY MANAGEMENT FEES AND RELATED PARTY TRANSACTIONS:
        -------------------------------------------------------

        According to the terms of the Partnership Agreement, the General
Partners are entitled to receive a partnership management fee equal to 7% of net
cash flow (as defined in the Partnership Agreement), 2% of which is subordinated
to the Limited Partners having received an annual cash return equal to 7% of
their average adjusted capital contributions. There were no such fees for the
years ended December 31, 1997, 1996 or 1995.

        The General Partners are also 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 of 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 the
sale of the Bryn Mawr Apartments or Parc Bordeaux, 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. The
fee earned in the sale of the Bryn Mawr Apartments, Parc Bordeaux Apartments,
Williamsburg South Apartments and Pleasant Run Apartments will not be recorded
as liabilities in the partnership financial statements until such time as
payment is probable.

        Management fees for the properties are paid to an affiliate of the
General Partners. The management agreement provides for 5% of gross monthly
receipts of the properties to be paid as fees for administering the operations
of the properties. These fees totaled $150,726, $217,095 and $227,134 for the
years ended December 31, 1997, 1996 and 1995, respectively.

        Computer service charges for the Partnership are paid or accrued to an
affiliate of the General Partners. The fee is based upon the number of apartment
units and totaled $8,640, $14,040 and $14,040 for the years ended December 31,
1997, 1996 and 1995.

                                       28
<PAGE>
               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-III
               ---------------------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                   (Continued)
                                   -----------


7.      PROPERTY MANAGEMENT FEES AND RELATED PARTY TRANSACTIONS (Con't.):
        ----------------------------------------------------------------

        Pursuant to the terms of the partnership agreement, the Corporate
General Partner charged the Partnership for reimbursement of certain costs and
expenses incurred by the Corporate General Partner and its affiliates in
connection with the administration of the Partnership. These charges were for
the Partnership's allocated share of such costs and expenses which include
payroll, legal, rent, depreciation, printing, mailing, travel, and communication
costs related to partnership accounting, partner communication and relations,
property marketing, and refinancing and are included in property operations.
Additionally, Partnership accounting and portfolio management fees, investor
services fees and brokerage fees are allocated based on total assets, number of
partners and number of units, respectively. Such charges totaled $141,849,
$178,372 and $269,236 respectively.

        The Corporate General Partner is entitled to a continuing Partnership
Management Fee equal to 7% of net cash flow (as defined in the Partnership
Agreement), of which 2% is subordinated to the receipt by the Limited Partners
of a non-cumulative annual cash return equal to 7% of the average of their
adjusted Capital Contributions (as defined in the Partnership Agreement). The
Corporate General Partner is paid its 5% Partnership Management Fee annually as
cash flow allows. The 2% subordinated fee will not be paid or accrued until such
time as the Limited Partners have received their 7% return and payment of the
fee becomes probable. No fee was paid for the years ended December 31, 1997,
1996 and 1995.

        Accounts payable to affiliates amounted to $35,707 and $208,156 at
December 31,1997 and 1996, respectively. The payables represent fees due and
advances from the Corporate General partner or an affiliate of the Corporate
General Partner. Interest charged on amounts due affiliates totaled $49,087,
$149,954 and $101,378 for the years ended December 31, 1997, 1996 and 1995, and
was calculated at a rate of 11% of the average balance. All amounts payable to
affiliates are payable upon demand.


8.      LEASES:
        ------

        In connection with its commercial property, the partnership has entered
into lease agreements with terms of one to five years. Minimum future rentals to
be received for each of the next five years under noncancelable operating leases
are as follows:

                           Year                                      Amount
                           ----                                      ------

                           1998                                  $    405,239
                           1999                                       295,614
                           2000                                       153,540
                           2001                                       117,530
                                                                       50,451
                                                                  -----------
                          Total                                   $ 1,022,374
                                                                  ===========



                                       29

<PAGE>

               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-III
               ---------------------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                   (Continued)
                                   -----------


9.      INCOME TAXES:
        -------------

        No provision has been made for income taxes since the income or loss of
the Partnership is to be included in the tax returns of the individual Partners.

        The tax returns of the Partnership are subject to examination by the
Federal and state taxing authorities. Under Federal and state income tax laws,
regulations and rulings, certain types of transactions may be accorded varying
interpretations and, accordingly, reported Partnership amounts could be changed
as a result of any such examination.

        The reconciliation of net loss for the years ended December 31, 1997,
1996 and 1995, as reported in the statement of operations, and as reported for
tax return purposes is as follows:
<TABLE>
<CAPTION>

                                                                1997              1996              1995
                                                           ---------------   ---------------   ----------------
<S>                                                        <C>                 <C>               <C>
Net income (loss) -
  Statements of operations                                    $ 1,800,830       $ 2,430,990       $ (1,392,983)

Add to (deduct from):
  Difference in depreciation                                     (151,699)         (310,146)           (85,765)

  Difference in amortization                                            -            65,724             65,723

  Difference in gain on sale of properties                        860,302           966,637                  -

  Non deductible expenses / non taxable income                   (487,362)         (246,668)           251,582

  Difference in loss of joint venture                             113,173            34,027              6,449
                                                          ---------------   ---------------   ----------------

Net income (loss) - tax return purposes                       $ 2,135,244       $ 2,940,564       $(1,154,994)
                                                          ===============   ===============   ================

</TABLE>

                                       30


<PAGE>
               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-III
               ---------------------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                   (Continued)
                                   -----------


9.      INCOME TAXES (Con't.):
        ---------------------

        The reconciliation of Partners' (Deficit) Capital for the years ended
December 31, 1997, 1996 and 1995, as reported in the balance sheet and as
reported for tax return purposes, is as follows:
<TABLE>
<CAPTION>

                                                            1997                1996                1995
                                                      -----------------   -----------------   ------------------
<S>                                                       <C>               <C>                   <C>
Partners' Capital (Deficit)  - Balance Sheet              $  3,927,664      $    2,126,834        $    (304,156)

Add to (deduct from):
  Accumulated difference in depreciation                    (4,386,495)         (4,234,796)          (3,924,650)
  Accumulated amortization of
    mortgage discounts                                          77,418              77,418               11,694
  Syndication fees and selling expenses                      1,842,060           1,842,060            1,842,060
  Gain on sale of properties                                 1,009,847             149,545             (817,092)
  Other nondeductible expenses /
    non taxable income                                          72,725             560,087              806,755
  Difference in book and tax
    depreciable cost basis                                     915,085             915,085              915,085
  Difference in book and tax
    basis of investments                                      (596,400)           (709,573)            (743,600)
  Other                                                        (69,286)            (69,286)             (69,286)
                                                     -----------------   -----------------   ------------------

Partners' Capital (Deficit) - tax return
  purposes                                               $   2,792,618           $ 657,374        $  (2,283,190)
                                                     =================   =================   ==================
</TABLE>


10.     SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
        ------------------------------------------------
<TABLE>
<CAPTION>
                                                              1997                1996                1995
                                                       ---------------     ---------------     ----------------
<S>                                                         <C>                 <C>                  <C>
Cash paid for interest                                      $1,227,146          $1,153,734           $1,072,197
                                                       ===============     ===============     ================

</TABLE>

                                       31


<PAGE>


               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-III
               ---------------------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                   (Continued)
                                   -----------


11.     RECLASSIFICATIONS:
        -----------------

        Certain reclassifications have been made to the 1996 and 1995 balances
to conform with the classifications used in 1997.


12.    SUBSEQUENT EVENTS:
       ------------------

        Subsequent to December 31, 1997, management committed to a plan to sell
the assets of Perrymont Office Building. On January 16, 1998, the Partnership
entered into an agreement to sell substantially all of Perrymont's real property
at a purchase price of $1,750,000. The agreement subsequently expired, but
management is continuing to market the assets of the property and anticipates a
sale in 1998.

        In April 1998, the lender for the Perrymont mortgage accepted a
discounted pay-off of the mortgage. An approximate gain of $210,000 will be
recognized in 1998 due to this extinguishment of debt.



                                       32

<PAGE>

SCHEDULE II

               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-III
               ---------------------------------------------------
                        Valuation and Qualifying Accounts
                        ---------------------------------
              For the Years Ended December 31, 1997, 1996 and 1995
              ----------------------------------------------------

<TABLE>
<CAPTION>

                                                                 Additions
                                                         ------------------------------
                                                                             Charged to
                                        Balance             Charged to         Other                               Balance
                                       Beginning            Costs and        Accounts -     Deductions -          at End of
              Description              of Period             Expenses        Described       Described              Period
              -----------              ---------            ----------       ----------     -----------          ----------
<S>                                 <C>                 <C>              <C>             <C>                   <C>
Year ended December 31, 1997
  Unamortized discounts on
    mortgages payable               $       706,399     $        -       $        -       $       706,399 (1)  $             -
                                    ===============     ==========       ==========       ===============      ===============

Year ended December 31, 1996
  Unamortized discounts on
    mortgages payable               $       767,055     $        -       $        -       $        60,656 (1)  $       706,399 (2)
                                    ===============     ==========       ==========       ===============      ===============

Year ended December 31, 1995
  Unamortized discounts on
    mortgages payable               $       832,778     $        -       $        -       $        65,723 (1)  $       767,055 (2)
                                    ===============     ==========       ==========       ===============      ===============

</TABLE>

(1)  Amortization charged to operations

(2) Discounts to be amortized over the remaining term of the mortgage.



                                       33


<PAGE>
<TABLE>
<CAPTION>

SCHEDULE III

                                                         REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-III
                                                         ---------------------------------------------------
                                                               REAL ESTATE AND ACCUMULATED DEPRECIATION
                                                               ----------------------------------------
                                                                          DECEMBER 31, 1997
                                                                          -----------------



                                        Initial Cost to                                       Gross amounts at which
                                          Partnership                 Cost                  Carried at Close of Period
                                  -----------------------------   Capitalized      -------------------------------------------
   Property                                                       Subsequent to                                       (1)(2)
  Description      Encumbrances       Land         Buildings       Acquisition         Land         Buildings         Total
  -----------      ------------       ----         ---------       -----------         ----         ---------         -----
<S>                 <C>             <C>         <C>               <C>             <C>             <C>             <C>
Perrymont Office
  Bldg.
  Pittsburgh, PA    $ 1,259,701    $   100,000   $   1,978,788     $    56,138     $   100,000     $ 2,034,926     $ 2,134,926


Ambassador Towers
  (formerly Cedar
  Ridge Apts.)
  Pittsburgh, PA      3,095,284        500,000       5,001,729         260,179         500,000       5,261,908       5,761,908   
                     

Inducon Joint
  Venture Amherst
  Amherst, NY         1,861,778        177,709               -       3,352,984         177,709       3,352,984       3,530,693   
                 --------------  -------------   -------------   -------------   -------------   -------------   -------------   

                   $  6,216,763   $    777,709    $  6,980,517    $  3,669,301    $    777,709   $  10,649,818    $ 11,427,527   
                 ==============  =============   =============   =============   =============   =============   =============   

</TABLE>
<TABLE>
<CAPTION>
                                                              Life           
                                                               on            
                                                              Which          
                                                          Depreciation       
                                                             In Latest       
                                                             Statement       
                                 (3)(4)                         Of           
   Property                   Accumulated     Date of       Operations                                                    
  Description                 Depreciation  Construction    Is Computed                                                   
  -----------                 ------------  ------------  -------------    
<S>                             <C>            <C>           <C>    
Perrymont Office                                                              
  Bldg.                                                                    
  Pittsburgh, PA                $ 995,617        8/85         25 Years                                                 
                                                                           
                                                                           
Ambassador Towers                
  (formerly Cedar                                                          
  Ridge Apts.)                                                             
  Pittsburgh, PA                2,268,777       12/85         25 Years                                                   
                                                                           
                            
Inducon Joint               
  Venture Amherst           
  Amherst, NY                   1,328,827        4/85         25 Years        
                            -------------                                  
                                                                           
                             $  4,593,221                                  
                            =============                                  
                            
</TABLE>

                                       34
<PAGE>


SCHEDULE III
------------
   (Continued)

               REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP III
               ---------------------------------------------------
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                    ----------------------------------------
                                DECEMBER 31, 1997
                                -----------------


(1) Cost for Federal income tax purposes is $11,427,527.

(2) A reconciliation of the carrying amount of land, buildings and improvements
    as of December 31, 1997, 1996 and 1995 is as follows:
<TABLE>
<CAPTION>

                                                                       Partnership Properties

                                                          1997                  1996                  1995
                                                    -----------------     -----------------     -----------------
<S>                                                 <C>                    <C>                   <C>                     
Balance at beginning of period                      $     10,967,459       $    18,648,605       $    18,476,919         
                                                          
Additions                                                  3,660,348                 7,307               171,686
Dispositions                                              (3,200,280)           (7,688,453)                    -
                                                   -----------------     -----------------     -----------------
Balance at end of period                            $     11,427,527       $    10,967,459       $    18,648,605                
                                                   =================     =================     =================


                                                                       Joint Venture Property

                                                          1997                  1996                  1995
                                                    -----------------     -----------------     -----------------
<S>                                                 <C>                   <C>                   <C>                            
Balance at beginning of period                      $      3,498,674      $      3,472,021      $      3,454,909               
                                                           
Additions                                                     32,019                26,653                17,112
Dispositions                                              (3,530,693)                    -                     -
                                                   -----------------     -----------------     -----------------
Balance at end of period                            $              -      $      3,498,674      $      3,454,909      
                                                   =================     =================     =================

(3)  A reconciliation of accumulated depreciation for the years ended
     December 31, 1997, 1996 and 1995 is as follows:

                                                                          Partnership Properties

                                                             1997                  1996                 1995
                                                        ----------------     -----------------     ----------------
<S>                                                      <C>                 <C>                  <C>                    
Balance at beginning of period                           $    4,371,230      $      7,061,771     $      6,349,299       
                                                              
Additions charged to cost and expenses
  during the period                                             202,212               449,241              712,472
Additions of joint ventures                                   1,328,827                     -                    -
Dispositions                                                 (1,309,048)           (3,139,782)                   -
                                                       ----------------     -----------------     ----------------
Balance at end of period                                 $    4,593,221      $      4,371,230      $     7,061,771        
                                                       ================     =================     ================

                                                                         Joint Venture Property

                                                            1997                  1996                 1995
                                                       ----------------     -----------------     ----------------
<S>                                                    <C>                   <C>                  <C>                     
Balance at beginning of period                         $     1,194,639       $     1,062,437      $       939,174         
                                                            
Additions charged to cost and expenses
  during the period                                            134,188               132,202              123,263
Dispositions                                                (1,328,827)                    -                    -
                                                      ----------------     -----------------     ----------------
Balance at end of period                               $             -       $     1,194,639      $     1,062,437
                                                      ================     =================     ================
</TABLE>

(4) Balance applies entirely to buildings and improvements.


                                       35
<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                           4/20/98
        -----------------------------             --------------------
        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                           4/20/98
        -------------------------------           --------------------
        JOSEPH M. JAYSON,                                Date
        President and Director

        /s/ MICHAEL J. COLMERAUER                      4/20/98
        -------------------------------           --------------------
        MICHAEL J. COLMERAUER                            Date
        Secretary




                                       36
<PAGE>


        Supplemental Information to be Furnished with Reports Filed Pursuant to
Section 15(d) of the Act by Registrants Which Have Not Registered Securities
Pursuant to Section 12 of the Act.

        The form 10-K is sent to security holders. No other annual report is
distributed. No proxy statement, form of proxy or other proxy soliciting
material was sent to any of the registrant's security holders with respect to
any annual or other meeting of security holders.


                                       37