FORM 10-KSB/A--Annual or Transitional Report
                 (Added by 34-30968, eff. 8/13/92, as amended.)


[X]   Annual Report Under Section 13 or 15(d) of the
      Securities Exchange Act of 1934 [Fee Required]

                   For the fiscal year ended December 31, 1994
                                       or
[  ]  Transition Report Under Section 13 or 15(d) of the
      Securities Exchange Act of 1934 [No Fee Required]

                  For the transition period.........to.........

                         Commission file number 0-18419 

                  BRUNNER COMPANIES INCOME PROPERTIES L.P. III 
                 (Name of small business issuer in its charter)

      Delaware                                           31-1266850
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                        Identification No.)

One Insignia Financial Plaza, P.O. Box 1089
    Greenville, South Carolina                            29602
(Address of principal executive offices)                (Zip Code)

                    Issuer's telephone number (803) 239-1000

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

                                      None

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

                      Units of Limited Partnership Interest
                                (Title of class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.Yes  X  No   

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year.  $2,883,926

State the aggregate market value of the voting partnership interests held by
non-affiliates computed by reference to the price at which the partnership
interests were sold, or the average bid and asked prices of such partnership
interests, as of December 31, 1994.  Market value information for the
Registrant's partnership interests is not available.  Should a trading market
develop for these interests, it is management's belief that such trading would
not exceed $25,000,000.      
                                                                
                       DOCUMENTS INCORPORATED BY REFERENCE
1.    Portions of the Prospectus of Registrant dated May 12, 1989 (included in
Registration Statement, No.33-27407, of Registrant) are incorporated by
reference into Parts I and III.

                                     PART II


Item 5.     Market for Partnership Equity and Related Partner Matters

      As of December 31, 1994, the number of holders of record of Limited
Partnership Units and Subordinated Interest Units was 661 and one, respectively.
Neither the Units nor the Subordinated Interest are traded on any established
public trading market, and it is not anticipated that such a market will develop
in the future.  During 1994, the number of Class A Limited Partnership Units
decreased by 500 Units due to Class A Limited partners abandoning their Units. 
In abandoning his or her Units, a limited partner relinquishes all rights, title
and interest in the Partnership as of the date of abandonment. 

      No cash distributions were paid during 1994 or 1993.  Future distributions
will depend on the levels of cash generated from operations, refinancings,
property sales and the availability of cash reserves.  At this time, the
Managing General Partner does not anticipate making a cash distribution during
1995.


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

Results of Operations

      The Partnership's net loss as shown in the financial statements for the
year ended December 31, 1994 was $1,348,974 versus $1,148,275 for the year ended
December 31, 1993.  The net losses of the Partnership included a loss from
property operations of $545,180 versus $455,102 in 1993.  The increase in net
loss was primarily due to greater write-downs of commercial properties in 1994
and increased operating and insurance expenses.  In 1994, the Partnership
recorded a write-down of $696,805 compared to $596,951 in 1993.  (See Note H of
the financial statements for a further discussion).  Also contributing to the
increase in net loss was an increase in operating expenses due to an increase of
approximately $37,000 for snow removal, parking lot repairs and maintenance
expenses at Highpoint in 1994.  Insurance expense increased approximately
$20,000 primarily as a result of an increase in coverage on Forest Ridge and Bay
Village in 1994 totalling approximately $16,000.  Tenant reimbursements
decreased as a result of a refund of property tax billings collected in 1993. 
General and administrative expenses increased primarily due to an increase in
professional fees paid for services relating to marketing the Partnership's
properties for sale.  Rental income decreased due to a slight decrease in rental
rates at three properties and a slight decrease in occupancy at two properties. 
Partially offsetting these increases in net loss was a decrease in the
depreciation expense for Forest Ridge.  Depreciation expense was reduced in 1994
due to the write- down of Forest Ridge at the end of 1993.

Liquidity and Capital Resources

      At December 31, 1994, the Partnership had unrestricted cash of $732,942
versus $696,137 at December 31, 1993.  Net cash provided by operating activities
decreased primarily as a result of decreases in rental income and the increase
in expenses from operations as discussed above and an increase in leasing
commissions and escrow payments made in 1994.  Net cash used in financing
activities increased due to loan extension costs paid to extend the maturity
date on the Highpoint and Gateway mortgage notes payable to March 1, 1995.  

      As of March 1, 1995, all of the mortgage notes payable of the Partnership
are in default.  The Managing General Partner believes it has successfully
negotiated a long-term extension on the mortgage notes for Highpoint and Gateway
to the year 2008.  Although the loans have not yet been refinanced, the
Partnership has signed a commitment with the lender and the loans are expected
to close on or before April 28, 1995.  The mortgages encumbering Forest Ridge
and Bay Village matured on January 1, 1994 with forebearances being granted to
June 30, 1994, while discussions continued between the Partnership and the
lender.  These discussions did not ultimately produce an agreement to either
refinance or sell the properties and the Partnership did not contest the
lender's foreclosure action on Forest Ridge on January 5, 1995. Operating
revenues and expense from Forest Ridge were approximately $785,000 and $933,000,
respectively, in 1994 and $744,000 and $896,000, respectively, in 1993.  As a
result of the foreclosure of Forest Ridge, the Partnership anticipates improved
financial performance since the Partnership's operations will not bear the
approximate $150,000 of annual operating losses generated by this property in
the last two years in future years of operation.  Negotiations are still
underway in regards to the Bay Village note.  It is expected that Bay Village
will either be sold by the Partnership or foreclosed on by the lender in 1995.

      Due to the uncertainty of the mortgage financing for the Partnership, the
Managing General Partner is attempting to maximize cash reserves.  No
distributions were made in 1994 or 1993 and no distributions are anticipated in
1995.  If the Partnership is able to close the long-term financing on Highpoint
and Gateway, the level of existing liquid assets would be sufficient to meet any
near-term needs of the Partnership.  Future cash distributions will depend on
the levels of net cash generated from operations, refinancings, property sales,
and the availability of cash reserves.

ITEM 7. FINANCIAL STATEMENTS


BRUNNER COMPANIES INCOME PROPERTIES L.P. III

LIST OF FINANCIAL STATEMENTS

                                                                       

   Report of Independent Auditors

   Balance Sheet - December 31, 1994

   Statements of Operations - Years ended December 31, 1994 and 1993

   Statements of Changes in Partners' Capital (Deficit) - Years ended December 
   31, 1994 and 1993

   Statements of Cash Flows - Years ended December 31, 1994 and 1993

   Notes to Financial Statements



                Report of Ernst & Young LLP, Independent Auditors


The Partners
Brunner Companies Income Properties L.P. III

We have audited the accompanying balance sheet of Brunner Companies Income
Properties L.P. III as of December 31, 1994, and the related statements of
operations, changes in partners' capital (deficit) and cash flows for each of
the two years in the period ended December 31, 1994.  These financial statements
are the responsibility of the Partnership's management.  Our responsibility is
to express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Brunner Companies Income
Properties L.P. III as of December 31, 1994, and the results of its operations
and its cash flows for each of the two years in the period ended December 31,
1994, in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming the
Partnership will continue as a going concern.  As discussed in Note A, the
Partnership's Forest Ridge property was foreclosed on January 5, 1995 and the
Partnership expects that its Bay Village property will either be sold or
foreclosed in 1995.  In addition, the long-term debt relating to the remaining
properties totaling $12,216,000 matured on March 1, 1995 and is in default.  The
Partnership presently does not have the funds to repay the debt.  Although the
Partnership is attempting to refinance the debt, there is no assurance that the
Partnership's negotiations will be successful.  These conditions raise
substantial doubt about the Partnership's ability to continue as a going
concern.  The financial statements do not include any adjustments to reflect the
possible future effects on the recoverability of assets or the amounts of
liabilities that may result from the possible inability of Brunner Companies
Income Properties L.P. III to continue as a going concern.


                                           ERNST & YOUNG LLP 

Greenville, South Carolina
February 20, 1995, except for Notes A and D,
as to which the date is March 2, 1995


                  BRUNNER COMPANIES INCOME PROPERTIES L.P. III







                                  BALANCE SHEET

                                December 31, 1994


Assets
   Cash:
      Unrestricted                                              $   732,942 
      Restricted--tenant security deposits                            8,779 
                                                                    741,721 

   Accounts receivable                                              193,311 
   Escrows for taxes and insurance                                  128,755 
   Other assets                                                     115,827 
   Investment properties (Notes B,D,H and K):  
      Land                                      $ 4,287,643 
      Buildings and related personal property    24,379,537 
                                                 28,667,180 
      Less accumulated depreciation              (4,416,756)     24,250,424 
                                                                $25,430,038 
               
Liabilities and Partners' Capital
Liabilities
   Accounts payable                                             $    19,084 
   Tenant security deposits                                           8,779 
   Accrued taxes                                                    174,499 
   Other liabilities                                                 68,863 
   Mortgage notes payable, in default (Note D)                   24,716,000 

Partners' Capital (Note C)
   General partner (deficit)                    $   (56,013)                
   Class A Limited partners - 850,900 units         477,574 
   Class B Limited partners - 8,600 units            21,252         442,813 
                                                                $25,430,038 
                                        


                 See Accompanying Notes to Financial Statements

                  BRUNNER COMPANIES INCOME PROPERTIES L.P. III

                             STATEMENTS OF OPERATIONS        

                                                         
                                                 Years Ended December 31, 
                                                  1994            1993    

Revenues:   
   Rental income                              $ 2,871,489     $ 2,911,151 
   Other income                                    27,678          25,166 
    Total revenues                              2,899,167       2,936,317 
Expenses:
   Operating                                      244,281         204,132 
   General and administrative expenses            122,230         107,688 
   Administrative                                  17,487          29,922 
   Property management fees                        87,196          97,596 
   Depreciation                                   808,739         853,369 
   Amortization                                    15,274          10,143 
   Interest                                     2,303,397       2,286,230 
   Property taxes                                 219,079         222,493 
   Insurance                                       59,822          40,076 
   Write-down of properties (Note H)              696,805         596,951 
   Tenant reimbursements (Note E)                (326,169)       (364,008)
    Total expenses                              4,248,141       4,084,592 

    Net loss (Note I)                         $(1,348,974)    $(1,148,275)

Net loss allocated to general 
    partner (1%)                              $   (13,490)    $   (11,483)
Net loss allocated to Class A limited
    partners (98.01%)                          (1,322,129)     (1,125,424)
Net loss allocated to Class B limited
    partners (.99%)                               (13,355)        (11,368)

                                              $(1,348,974)    $(1,148,275)

Net loss per Class A limited partnership 
   unit:  (based on 850,900 and 851,400 
   limited partnership units outstanding 
   during the periods, respectively)          $     (1.55)    $     (1.32)

                 See Accompanying Notes to Financial Statements


                  BRUNNER COMPANIES INCOME PROPERTIES L.P. III

              STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)  

                                 General        Limited Partners    
                                 Partner        Class A    Class B     Total    

Original capital contributions   $  1,000    $ 8,420,170  $ 86,000  $ 8,507,170 

Partners' (deficit) capital at
   December 31, 1992             $(31,040)   $ 2,925,127  $ 45,975  $ 2,940,062 

Net loss for the year 
   ended December 31, 1993        (11,483)    (1,125,424)  (11,368)  (1,148,275)

Partners' (deficit) capital at       
   December 31, 1993              (42,523)     1,799,703    34,607    1,791,787 

Net loss for the year 
   ended December 31, 1994        (13,490)    (1,322,129)  (13,355)  (1,348,974)

Partners' (deficit) capital at
   December 31, 1994             $(56,013)   $   477,574  $ 21,252  $   442,813 


                    See Accompanying Notes to Financial Statements

                  BRUNNER COMPANIES INCOME PROPERTIES L.P. III

                             STATEMENTS OF CASH FLOWS       

                                                               
                                                      Years Ended December 31,  
                                                        1994            1993    
Cash flows from operating activities:
   Net loss                                        $(1,348,974)     $(1,148,275)
   Adjustments to reconcile net loss to 
      net cash provided by operating activities:
      Depreciation                                     808,739          853,369 
      Amortization of organizational costs, 
       loan costs and leasing commissions               32,442           10,143 
      Write-down of properties                         696,805          596,951 
      Write-off of income guarantees                      --             21,963 
      Change in accounts:
       Restricted cash                                  (8,779)            --   
       Accounts receivable                              12,663           (6,214)
       Escrows for taxes and insurance                 (72,777)          52,019 
       Other assets                                    (86,890)          44,237 
       Accounts payable                                  5,561           (1,225)
       Tenant security deposit liabilities               8,779           (1,375)
       Accrued taxes                                    10,669           64,536 
       Other liabilities                                 1,905         (112,822)

       Net cash provided by 
        operating activities                            60,143          373,307 

Cash flows from investing activities:
   Property improvements and replacements               (1,266)           --    
   Capitalized income guarantee collections               --              2,448 

       Net cash (used in) provided by
        investing activities                            (1,266)           2,448 

Cash flows from financing activities:
   Loan extension costs                                (22,072)            --   

       Net cash used in financing                              
        activities                                     (22,072)             --  

Net increase in cash                                    36,805          375,755 

Cash at beginning of year                              696,137          320,382 

Cash at end of year                                $   732,942      $   696,137 

Supplemental disclosure of cash flow 
   information:
   Cash paid for interest                          $ 2,286,230      $ 2,286,230 

                 See Accompanying Notes to Financial Statements


                  BRUNNER COMPANIES INCOME PROPERTIES L.P. III

                          Notes to Financial Statements

                                December 31, 1994


Note A - Going Concern

The accompanying financial statements have been prepared assuming the
Partnership will continue as a going concern.  As shown in the financial
statements, the Partnership had cash flows provided by operating activities of
$60,143 and $373,307 in 1994 and 1993, respectively, and, at December 31, 1994
has unrestricted cash of $732,942.  As discussed in Note D, mortgage notes
payable of $12,500,000 that matured January 1, 1994 are in default and mortgage
notes payable of $12,216,000 that matured March 1, 1995 were not paid.  The
Partnership's operating cash flows during 1995 will be inadequate to enable the
Partnership to make these payments on its long-term debt.  

Throughout 1994 management sought and is presently seeking refinancing for the
Partnership's debt.  The Partnership has been unsuccessful in refinancing the
debt on Bay Village and Forest Ridge which matured January 1, 1994. 
Accordingly, Forest Ridge was foreclosed on January 5, 1995 (see Note L) and it
is expected that Bay Village will either be sold or foreclosed by the lender in
1995.  A long-term extension related to Highpoint and Gateway Plaza has been
proposed by the lender (see Note D) and the Partnership has signed a loan
commitment.  However, there can be no assurance that the refinancing will be
successful and that the Partnership will have sufficient funds to finance its
operations through the year ending December 31, 1995.  These conditions raise
substantial doubt about the Partnership's ability to continue as a going
concern.

The financial statements do not include any adjustments relating to the
recoverability of recorded asset amounts or the amounts of liabilities that
might be necessary should the Partnership be unable to continue as a going
concern.


Note B - Organization and Significant Accounting Policies

Organization:  Brunner Companies Income Properties L.P. III (the "Partnership 
or "Registrant"), a Delaware limited partnership, was formed on March 10, 1989
for the purpose of acquiring and operating the following retail centers:  Bay
Village, a 133,474 square foot retail center in Conway, South Carolina; Forest
Ridge, a 164,672 square foot retail center in Asheville, North Carolina; Gateway
Plaza, a 157,141 square foot retail center in Mt. Sterling, Kentucky; and
Highpoint Village, a 153,267 square foot retail center in Bellefontaine, Ohio
(collectively referred to as the  Retail Centers ).  The Seller of these Retail
Centers was related to the then general partners of the Partnership.  On January
5, 1995, the mortgage holder on the Forest Ridge Shopping Center foreclosed on
the property.  Refer to Note L of the financial statements for a further
discussion of the foreclosure transaction.

Note B - Organization and Significant Accounting Policies (continued)

The general partner of the Partnership is Brunner Management Limited Partnership
( General Partner ).  The General Partner is an Ohio limited partnership whose
general partner is 104 Management, Inc. ( Managing General Partner ) and whose
limited partner is a shareholder of 104 Management, Inc.  On March 5, 1993,
IBGP, Inc., an affiliate of Insignia Brunner L.P., acquired a majority of the
outstanding stock of 104 Management, Inc.  IBGP, Inc. is an indirect wholly-
owned subsidiary of Metropolitan Asset Enhancement L.P., an affiliate of
Insignia Financial Group, Inc.  As a result of this transaction, IBGP, Inc.
effectively controls the Managing General Partner of the Partnership.

The Partnership shall continue in existence until December 31, 2008, unless it
is earlier dissolved and terminated pursuant to the provisions of the
partnership agreement.

Investment Properties:  Investment properties are stated at the lower of cost or
estimated fair value.  The Partnership performs a valuation analysis of its
property periodically to determine the estimated fair value of the property. 
Estimated fair value is determined using the higher of nonrecourse debt, when
applicable, or net operating income of the property capitalized at a rate deemed
reasonable for the type of property, adjusted for market conditions, physical
condition of the property and other factors to assess whether any permanent
impairment in value has occurred.

Buildings and improvements are depreciated on the straight-line basis over an
estimated useful life of 5 to 31.5 years.  Tenant improvements are depreciated
over the term of the lease.

For Federal income tax purposes, the Partnership depreciates a portion (90
percent attributable to non tax-exempt investors) of the property s basis using
the straight-line method over thirty-one and one-half years and the balance (10
percent attributable to tax-exempt investors) using the straight-line method
over forty years.

Leases:  The Partnership leases certain commercial space to tenants under
various lease terms.  Some of the leases contain stated rental increases during
their term.  For leases with fixed rental increases, rents are recognized on a
straight-line basis over the terms of the lease.  This straight-line basis
recognized $47,056 more in rental income than has been collected in 1994 and
prior years.  This amount is expected to be collected in future years as cash
collections under the terms of the leases exceed the straight-line basis of
revenue recognition.  For all other leases, minimum rents are recognized over
the terms of the leases.

Lease Commissions:  Lease commissions are capitalized and amortized by the
straight-line method over the life of the applicable lease.  Lease commissions
of $51,402, net of accumulated amortization of $14,967, are included in other
assets.

Note B - Organization and Significant Accounting Policies (continued)

Loan Costs:  Loan extension costs of $22,072 were incurred in extending the
mortgages on Gateway Plaza and Highpoint Village from June 1, 1994 to March 1,
1995.  These costs are included in other assets and are being amortized on a
straight-line basis over the term of the extension.

Cash:

     Unrestricted - Unrestricted cash includes cash on hand and in banks and
money market funds.  At certain times the amount of cash deposited at a bank may
exceed the limit on insured deposits.

     Restricted cash - tenant security deposits - The Partnership requires
security deposits from new lessees for the duration of the lease and such
deposits are considered restricted cash.  Deposits are refunded when the tenant
vacates, provided the tenant has not damaged its space and is current on its
rental payments.

Reclassification: Certain reclassifications have been made to the 1993
information to conform to the 1994 presentation.


Note C - Partnership Allocations, Contributions and Distributions

Distributions of operating cash flow, as defined in the partnership agreement,
will be distributed as follows:

     First, to the Class A Limited Partners until they have received a
     cumulative noncompounded annual cash return of 10% (Class A priority
     return) of their adjusted capital contributions;

     Second, to the Class B Limited Partners until they have received a
     cumulative noncompounded annual cash return of 10% (Class B priority
     return) of their adjusted capital contributions;

     Third, to the General Partner to the extent that taxable income for the
     fiscal year is allocated to the General Partner; and

     Fourth, to the Class A Limited Partners and to the Class B Limited Partners
     an amount equal to 99% and 1%, respectively, of the balance, if any,
     remaining.  

Taxable income or loss from operations will be allocated 98.01% to the Class A
Limited Partners, .99% to the Class B Limited Partners and 1% to the General
Partner.

Note C - Partnership Allocations, Contributions and Distributions (Continued)

All excess proceeds from sales and debt refinancings generally will be
distributed in the following order:

     First, to the Class A Limited Partners until their adjusted capital
     contributions are reduced to zero;

     Second, to the Class B Limited Partners until their adjusted capital
     contributions are reduced to zero;

     Third, to the Class A Limited Partners for any unpaid priority return of
     cash distributions of operating cash flows;

     Fourth, to the Class B Limited Partners for any unpaid priority return of
     cash distributions of operating cash flows;

     Fifth, to the General Partner until its original capital contribution is
     reduced to zero; and

     The balance, if any, 74.25% to the Class A Limited Partners, .75% to the
     Class B Limited Partners and 25% to the General Partner.

During 1994, the number of Class A limited partnership units decreased by 500
due to Class A limited partners abandoning their units.  In abandoning his or
her partnership units, a limited partner relinquishes all right, title and
interest in the Partnership as of the date of abandonment.

As of December 31, 1994, the Partnership had undeclared amounts of $2,909,181 or
$3.42 per Class A unit and $45,150 or $5.25 per Class B unit of the cumulative
annual 10% cash returns.

Note D - Mortgage Notes Payable - in default

                 Balance At    Monthly       Stated                   Balance
                December 31,   Interest     Interest   Maturity       Due At
 Property           1994      Payment(1)      Rate       Date       Maturity(1)
                                                   
 Bay Village                                          
  1st mortgage                                        
  in default    $ 5,300,000   $ 40,854       9.25%    01/01/94(2)  $ 5,300,000
                                                                  
 Forest Ridge                                         
  1st mortgage                                        
  in default      7,200,000     55,500       9.25%    01/01/94(2)    7,200,000
                                                                           
 Gateway Plaza                                        
  1st mortgage                                        
  in default      5,616,000     43,290       9.25%    03/01/95(3)    5,616,000
                                                                           
 Highpoint                                            
  1st mortgage                                        
  in default      6,600,000     50,875       9.25%    03/01/95(3)    6,600,000
                              
 Total          $24,716,000   $190,519                             $24,716,000


  (1)    Mortgages require a balloon payment at maturity for the full principal
         amount.  Throughout the mortgage term, interest only payments are made.

  (2)    These mortgages originally matured on January 1, 1994, however, the
         lender granted forebearances through June 30, 1994 while refinancing
         discussions continued between the Partnership and the lender.  These
         discussions did not ultimately produce an agreement to either refinance
         or sell the properties and the Partnership did not contest the lender's
         foreclosure of Forest Ridge on January 5, 1995.  Negotiations are still
         underway in regards to the Bay Village note.  It is expected that Bay
         Village will either be sold by the Partnership or foreclosed on by the
         lender in 1995.  

  (3)    These mortgages matured March 1, 1995 and were not paid, therefore they
         are in default.  However, the Partnership has signed a commitment with
         the lender for a long-term loan extension to the year 2008, and the
         loans are expected to close on or before April 28, 1995.

The mortgage notes payable are nonrecourse and are secured by the properties and
by a pledge of the revenues from the respective properties.

Note E - Operating Leases

Tenants are responsible for their own utilities and maintenance of their space,
and payment of their proportionate share of common area maintenance, utilities,
insurance and real estate taxes.  A portion of the real estate taxes, insurance,
and common area maintenance expenses are paid directly by the Partnership.  The
Partnership is then reimbursed by the tenants for their proportionate share. 
The expenses paid by the Partnership are included on the Statements of
Operations as property taxes, insurance, and operating expenses.  The portion
which is reimbursable from the tenants has been listed as a separate item on the
Statements of Operations.

Bad debt expense has been within the Managing General Partner's expectation. 
Most of the leases also provide for percentage rent of .75% to 5% of sales after
a certain level of sales are achieved.  Percentage rents were not material in
1994 and 1993.

The future minimum rental payments to be received under operating leases that
have initial or remaining noncancellable lease terms in excess of one year as of
December 31, 1994 are as follows:
                                               
               1995            $ 1,965,734     
               1996              1,952,712     
               1997              1,809,126     
               1998              1,640,982     
               1999              1,381,451     
               Thereafter       11,383,837     

                               $20,133,842     

The future minimum rental payments which relate to Bay Village are $546,068;
$543,256; $477,968; $422,934; $246,960; and $1,875,826 for 1995, 1996, 1997,
1998, 1999 and thereafter, respectively.  As discussed in Note D, Bay Village is
expected to be either sold or foreclosed in 1995.  Future minimum rental
payments related to Forest Ridge are not included since the property was
foreclosed upon in 1995.

One anchor tenant represents $9,039,856 of the above minimum future rentals
under leases expiring in 2008.

Note F - Major Tenants

Rent from tenants representing at least 10% of rental income were as follows:

                                          1994                   1993   
                                     Amount   Percent      Amount    Percent
           Wal-Mart Stores, Inc.  $1,013,122       35%  $1,013,122        35%
           Kroger                    345,424       12%     345,424        12%
           Goody's Family Clothing   300,915       10%     300,915        10%

 Note G - Contingencies

 The Partnership is unaware of any pending or outstanding litigation that is not
 of a routine nature.  The Managing General Partner of the Partnership believes 
 that all such pending or outstanding litigation will be resolved without a 
 material adverse effect upon the business, financial condition, or operations 
 of the Partnership.
  

 Note H - Write-Down of Investment Properties

 During 1994, all of the properties in the Partnership experienced cash flow
 difficulties. Accordingly, in the fourth quarter of 1994, the Partnership 
 recorded a valuation write-down to reduce the carrying costs of the assets 
 related to Highpoint, Bay Village and Gateway Plaza based on estimated fair
 values.  The write-downs were calculated using the higher of nonrecourse debt,
 when applicable, or net operating income of the property capitalized at a
 rate deemed reasonable for the type of property adjusted for market conditions,
 physical condition of the property and other factors to assess whether any 
 permanent impairment in value has occurred.  Due to highly competitive 
 conditions in the market place which have forced reductions in average rental 
 rates to maintain occupancy levels and the likely move-out of an anchor tenant,
 the Managing General Partner has concluded that a permanent impairment in value
 has occurred.  The write-downs resulted in a charge to operations of $696,805 
 for the year ended December 31, 1994.

 Subsequent to December 31, 1994, the Forest Ridge Shopping Center was 
 foreclosed on by the mortgage note holder.  As part of the foreclosure 
 transaction, the Partnership recorded a valuation write-down of $414,859 to 
 reduce the carrying costs of the Forest Ridge Assets to their estimated market
 value and a gain on the foreclosure of approximately $844,000.  For a further
 discussion of the foreclosure transaction, refer to Note L of the financial
 statements.

 During 1993, Forest Ridge also experienced cash flow difficulties and recorded
 a valuation write-down to reduce the carrying value of the assets.  The write-
 down resulted in a charge to operations of $596,951 for the year ended December
 31, 1993.

 Note I - Income Taxes

 The Partnership is classified as a partnership for Federal income tax purposes.
 Accordingly, no provision for income taxes is made in the financial statements 
 of the Partnership.  Taxable income or loss of the Partnership is reported in 
 the income tax returns of its partners.

 Differences between the net loss as reported and Federal taxable loss result 
 primarily from (1) write-down of property, (2) depreciation over different 
 methods and lives and on differing cost bases of investment properties, and 
 (3) change in rental income received in  advance.  The following is a 
 reconciliation of reported net loss and Federal taxable loss:

                                                 1994          1993   
 Net loss as reported                        $(1,348,974) $(1,148,275)
 Add (deduct):
      Depreciation differences                   (55,239)      (9,702)
      Unearned income                              6,191        3,542 
      Miscellaneous                               (3,220)     (48,654)
      Write-down of properties                   696,805      596,951 
 Federal taxable loss                        $  (704,437) $  (606,138)
 Federal taxable loss per Class A
      limited partnership unit               $      (.81) $      (.70)

 The following is a reconciliation between the Partnership's reported amounts
 and Federal tax basis of net assets and liabilities:

        Net assets as reported                $  442,813 
        Land and buildings                     3,893,898 
        Accumulated depreciation                 (46,726)
        Syndication                              830,579 
        Other                                      1,586              
    
        Net assets - Federal tax basis        $5,122,150 


 Note J - Transactions with Affiliated Parties

 The Partnership has no employees and is dependent on the Managing General 
 Partner and its affiliates for the management and administration of all 
 partnership activities.  The partnership agreement provides for payments 
 to affiliates for services and for reimbursement of certain expenses incurred
 by affiliates on behalf of the Partnership.  The following payments were made
 to affiliates of Insignia Financial Group, Inc. in 1994 and 1993:

                                                   1994         1993  
      Property management fees                    $87,196      $73,145
      Reimbursement for services of affiliates     38,712       40,980

 Note J - Transactions with Affiliated Parties (continued)

 The Partnership insures Highpoint Village and Forest Ridge under a master 
 policy through an agency and insurer unaffiliated with the General Partner.
 An affiliate of the General Partner acquired, in the acquisition of a business,
 certain financial obligations from an insurance agency which was later acquired
 by the agent who placed the current year's master policy.  The current agent 
 assumed the financial obligations to the affiliate of the General Partner, who 
 receives payments on these obligations from the agent.  The amount of the
 Partnership's insurance premiums accruing to the benefit of the affiliate of 
 the General Partner by virtue of the agent's obligations is not significant.


 Note K - Investment Properties and Accumulated Depreciation


<TABLE>
<CAPTION>                                                        
                                                   Initial Cost       
                                                  To Partnership      
                                                                          Cost
                                                          Buildings    Capitalized
                                                         and Related    (Removed)
                                                           Personal   Subsequent to
  Description                 Encumbrances      Land       Property    Acquisition 
 <S>                         <C>           <C>          <C>          <C>
  Retail Centers                                         
                                                        
  Bay Village                                            
   Conway, South Carolina     $ 5,300,000   $  836,387   $ 5,553,126  $    44,817
                                                                         (195,135)
  Forest Ridge                                                         
   Asheville, North Carolina    7,200,000    2,280,008     6,643,703      680,281
                                                                       (1,602,508)  
  Gateway Plaza                                          
   Mt.Sterling, Kentucky        5,616,000    1,021,523     6,590,424   (1,441,554)
                                                         
  Highpoint Village                                                        29,000
   Bellefontaine, Ohio          6,600,000      720,676     7,848,598     (342,166)
                                                         
     Totals                   $24,716,000   $4,858,594   $26,635,851  $(2,827,265)
</TABLE>



 Note K - Investment Properties and Accumulated Depreciation (continued)

<TABLE>
<CAPTION>
                                           
                                  Gross Amount at Which Carried                   
                                       At December 31, 1994                          
                      
                                                Buildings                                    
                                               And Related                                   
                                                 Personal                     Accumulated      Date      Depreciable
       Description                  Land         Property         Total       Depreciation   Acquired     Life-Years
 <S>                           <C>           <C>             <C>            <C>             <C>             <C>    
  Bay Village                                                                                
  Conway, SouthCarolina         $  811,022    $ 5,428,173     $ 6,239,195    $  939,195      09/22/89         31.5
                                                                                             
  Forest Ridge                                                                               
   Asheville, North Carolina     1,951,172       6,050,312       8,001,484     1,163,217     09/22/89        5-31.5
                                                                                             
  Gateway Plaza                                                                                              
   Mt.Sterling, Kentucky           835,083       5,335,310       6,170,393     1,058,237     09/22/89           28-31.5
                                                                                             
  Highpoint Village                                                                          
   Bellefontaine, Ohio             690,366       7,565,742       8,256,108     1,256,107     09/22/89           5- 31.5
                                                              
  Totals                        $4,287,643    $24,379,537     $28,667,180    $ 4,416,756  

</TABLE>


 Reconciliation of  Investment Properties and Accumulated Depreciation :
                                                                          
                                                      
                                           Years Ended December 31,   
                                              1994            1993    
 Investment Properties
 Balance at beginning of year             $29,362,719     $29,959,670 
    Forest Ridge property improvements          1,266           --    
    Write-down of properties                 (696,805)       (596,951)

 Balance at End of Year                   $28,667,180     $29,362,719 

 Accumulated Depreciation
 Balance at beginning of year             $ 3,608,017     $ 2,754,648 
    Additions charged to expense              808,739         853,369 

 Balance at End of Year                   $ 4,416,756     $ 3,608,017 

 Note K - Investment Properties and Accumulated Depreciation (continued)

 The aggregate cost of the real estate for Federal income tax purposes at 
 December 31, 1994 is $32,561,078.  The accumulated depreciation taken for
 Federal income tax purposes at December 31, 1994 is $4,463,482.


 Note L - Foreclosure of Forest Ridge

 On January 5, 1995, the lender foreclosed on Forest Ridge Shopping Center.
 The $7,200,000 mortgage matured January 1, 1994 and was in default.  The lender
 granted forebearances through June 30, 1994 while refinancing discussions 
 continued between the Partnership and the lender.  These discussions did not
 ultimately produce an agreement to either refinance or sell the property and 
 the Partnership did not contest the lender's  foreclosure.  In the Managing 
 General Partner's opinion, it was not in the Partnership's best interests to
 contest the foreclosure action or file bankruptcy.  On January 5, 1995, the 
 Partnership recorded a valuation write-down of $414,859 to reduce the carrying 
 costs of the Forest Ridge assets to their estimated market value and a gain on
 the foreclosure of approximately $844,000.

 Operating revenues and expenses from Forest Ridge were approximately $785,000 
 and $933,000, respectively, in 1994 and $744,000 and $896,000, respectively, 
 in 1993.

                                          SIGNATURES

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


                              BRUNNER COMPANIES INCOME PROPERTIES L.P. III,
                               A Delaware Limited Partnership

                              By:   Brunner Management Limited
                                    Partnership, an Ohio Limited Partnership,
                                    its General Partner

                              By:   104 Management, Inc., an Ohio Corporation,
                                    its General Partner


                              By:   /s/ Carroll D. Vinson                     
                                    Carroll D. Vinson
                                    President

                              Date: March 27, 1996


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



 /s/ Carroll D. Vinson              President                March 27, 1996
 Carroll D. Vinson 




 /s/ Robert D. Long, Jr.            Controller and           March 27, 1996
 Robert D. Long, Jr.                Principal Accounting
                                    Officer