UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                           Washington, DC  20549
                                FORM 10-K
            [X]  Annual Report Pursuant to Section 13 or 15(d) of the
                       Securities Exchange Act of 1934
                   For the Fiscal Year Ended December 31, 1998
           [  ]  Transition Report Pursuant to Section 13 or 15(a) of the
                       Securities Exchange Act of 1934

                        Commission File Number 0-13559

                                 LDP-III
            (Exact name of registrant as specified in its charter)

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

                    P. O. Box 130, Carbondale, CO 81623
                 (Address of principal executive offices)

                             (970) 963-8007
         (Partnership's telephone number, including area Code)

      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
                             (Title of Class)

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 
of Regulation S-K (229.405 of this chapter) is not contained herein, and will 
not 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-K 
or any amendment to this Form 10-K.[ ]

State the aggregate market value of the voting stock held by non-affiliates of 
the registrant.  Inapplicable

DOCUMENTS INCORPORATED BY REFERENCE.  None

<PAGE>

LDP-III

FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 1998

TABLE OF CONTENTS

Form 10-K

Item No.         Name of Item

Part I
     Item 1.     Business
     Item 2.     Properties
     Item 3.     Legal Proceedings
     Item 4.     Submission of Matters to a Vote of Security Holders

Part II
     Item 5.     Market for Registrant's Common Equity and Related
                      Partnership Matters
     Item 6.     Selected Financial Data
     Item 7.     Management's Discussion and Analysis of
                      Financial Condition and Results of Operations
     Item 8.     Financial Statements and Supplementary Data
     Item 9.     Changes in and Disagreements With Accountants
                      on Accounting and Financial Disclosure

Part III
     Item 10.    Directors and Executive Officers of the Registrant
     Item 11.    Executive Compensation
     Item 12.    Security Ownership of Certain Beneficial Owners
                      and Management
     Item 13.    Certain Relationships and Related Transactions

Part IV
     Item 14.     Exhibits and Reports Form 8-K

Signatures

Index to Financial Statements included in the form 10-K.

<PAGE>

PART I

ITEM 1.    BUSINESS

On December 31, 1998, the registrant sold the last of its real property 
investments known as Jefferson Place Office Building, located in Boise, Idaho.

Jefferson Place was the final operating property owned by LDP-III.  The 
Partnership intends to dissolve its operations by the end of the first
Quarter 1999.  Immediately subsequent to the sale of this property, the 
Partnership had no "Ongoing Operations" to report.

LDP-III (the "Partnership") was a limited partnership which was organized 
under the Uniform Limited Partnership Act of the State of California on August 
30, 1983.  The Partnership was organized as a non-specified property limited 
partnership to acquire a diversified portfolio of real properties, including 
commercial, residential and agricultural properties, located primarily within 
the western portion of the United States.  The General Partner of the 
Partnership is Landsing Partners-III (the "General Partner"), a partnership 
having two General Partners, Landsing Equities Corporation, a California 
corporation which is the managing partner of the General Partner, and Partners 
'84, a California limited partnership.

The Partnership's business consisted of a single segment - equity investments 
in leveraged income-producing real property.  For a schedule of the 
Partnership's revenue, net loss and total assets for its last fiscal year, see 
Item 6, Selected Financial Data, below.  The Partnership was not engaged 
in the production of goods or the rendering of services.

The Partnership had an investment in a wholly-owned subsidiary, LDP-III Realty 
Service Corporation, which owned one property, the 391 Forbes Building in 
South San Francisco, California, which sold in August, 1996.  For financial 
reporting purposes, the Partnership's investment in LDP-III Realty Service 
Corporation was presented on a consolidated basis.

Cash reserves totaled $1,894,000 at December 31, 1998.  The General Partner 
has declared a final cash distribution of $48.25 per unit (one partial 
distribution of $30 per unit/one final distribution of $18.25) to unit 
holders of record on December 31, 1998, which was paid in January and March,
1999.  These cash distributions represent the final assets of LDP-III which,
subsequent to this final distribution, is to be considered a fully 
liquidated and dissolved Partnership.

ITEM 2.    PROPERTIES

           None.

ITEM 3.    LEGAL PROCEEDINGS

           None.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter has been submitted to a vote of security holders, through 
solicitation of proxies or otherwise, during fourth quarter 1998.

<PAGE>
<TABLE>

PART II


ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY 
           AND RELATED PARTNERSHIP MATTERS

There is no established public trading market for the Units of Limited 
Partnership interest of the Partnership and there are substantial restrictions 
on the transferability of such Units imposed by Federal and state securities 
laws and by the Limited Partnership Agreement, as amended.

The approximate number of record holders of Units of the Partnership as of 
December 31, 1998, was 3,837.  

The limited partners of the Partnership (the "Limited Partners") are entitled 
to certain distributions under the Amended and Restated Certificate and 
Agreement of Limited Partnership of the Partnership.  

ITEM 6.    SELECTED FINANCIAL DATA <F1>
           (In thousands, except per Unit amounts)

<CAPTION>
                                        For the years ended December 31
                                   1998      1997     1996     1995     1994
<S>                             <C>       <C>      <C>      <C>      <C>
Rental Revenue                  $   672   $ 1,275  $ 1,210  $ 1,339  $ 2,101
Comprehensive Income (Loss)         693     2,838     (193)    (334)    (259)
Comprehensive Income (Loss) 
   Per Unit<F2>                      19        76       (5)      (9)      (7)
Total Assets                      1,905     5,304    6,954    8,636    9,286
Long-term Obligations                 0     2,452    6,891    7,871    8,167
Cash Distributions Per Unit<F3>      45         0       15        0       14 

<FN>
<F1>
(1) Financial data of the Partnership for 1998 is not comparable to that of 
1997, 1996 or prior periods because the Partnership did not own the same 
number of properties throughout these periods.  For a more specific discussion 
of the impact of the foregoing factor on the comparability of the 
Partnership's financial information, see Item 7, Management's Discussion and 
Analysis of Financial Condition and Results of Operations.

<F2>
(2)  Based on a weighted average of outstanding Units in 1998, 1997, 1996, 
1995 and 1994. 

<F3>
(3)  Final distributions of $48.25 per unit ($30 in January 1999 and $18.25
in March 1999) were made during the first quarter of 1999.

</TABLE>
<PAGE>

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

INTRODUCTION

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

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 1998 the Partnership had cash and cash equivalents totaling
approximately $1,894,000.  

In August 1996, the Partnership sold its interest in the 391 Forbes Building 
in South San Francisco, California.  Gross proceeds were $1,730,000, which 
resulted in a gain of $223,000 and cash proceeds of $660,000.  Proceeds were 
used to fund a Partnership distribution.

On December 9, 1997, the Partnership sold one of its real property investments 
known as 1201 Cadillac Court, located in Milpitas, California.  The property 
consisted of a 51,450 square feet commercial building. The sale price received
by the registrant was $6,800,000 which resulted in a gain of $3,020,000 and
cash proceeds of $1,796,000.

On December 31, 1998, the registrant sold the last of its real property
investments known as Jefferson Place Office Building, located in Boise, Idaho.
The sale price received by the registrant was $4,405,000 which resulted in a
gain of $1,065,055 and cash proceeds of $1,732,642.  Jefferson Place was the 
final operating property owned by LDP-III.  The Partnership intends to cease
and dissolve its operations by the end of the first quarter 1999.

During 1998, the Partnership experienced a net decrease in cash and cash 
equivalents of $114,000.  Sources of cash during the year were from regular 
Partnership Operations and the sale of Jefferson Place.  Cash uses during 1998 
were: $109,000 for property capital expenditures and lease commissions, 
$48,000 for principal payments on notes payable, and cash distribution to 
Limited Partners of $1,671,000.  As of December 31, 1998, cash and cash 
equivalents totaled $1,894,000 versus a balance of $2,008,000 at December 31, 
1997.

<PAGE>

The Partnership made a cash distribution to its limited partners of $45.00 per 
unit during 1998.  The General Partner has declared a cash distribution of $30 
per unit to unit holders of record on December 31, 1998.  This distribution 
was paid in January, 1999.  The Partnership made a final distribution of 
$18.25 per unit on March 8, 1999 to the unit holders of record on December 31, 
1998.  This distribution represents the last assets of the Partnership.

<PAGE>

RESULTS OF OPERATIONS

Overall, rental income decreased 48% in 1998 versus 1997.  1997's revenue 
increased 5% from the 1996 level.  The 1998 decrease was due to the sale of 
1201 Cadillac in December 1997.

Interest income in 1998 increased 85% from that in 1997.  This was the result 
of larger cash balances held by the Partnership.  

Interest expense and depreciation expenses decreased significantly from 1996 
to 1997 and 1998 due to the disposition of properties in 1997 and 1998.

General and administrative expenses decreased 2% in 1998 versus 1997.  1997's 
general and administrative expenses increased 5% from 1996.

Net loss of the Partnership before gain from sale of real estate increased 51% 
in 1998 versus 1997.  Net loss of the Partnership in 1997 decreased 56% versus 
1996.  

<PAGE>
<TABLE>

A comparison of the operations of the one property operated continuously 
through 1998, 1997 and 1996 is provided below:

<CAPTION>

                                              1998         1997         1996
<S>                                        <C>          <C>          <C>
Rental Revenue                             $   672      $   667      $   658
Rental Operating Expense                       316          321          319
Net Operating Income                       $   356      $   346      $   339

Interest Expense                           $   225      $   243      $   232

Rental revenues increased 1.5% from 1996 to 1997 with only a slight increase 
from 1997 to 1998.  

Operating expense decreased 2% from 1997 to 1998 after increasing slightly 
from 1996 to 1997.  

INFLATION

Not applicable.

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this Item is contained at Page F-1 following in 
this Report.

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON 
           ACCOUNTING AND FINANCIAL DISCLOSURE
None.

</TABLE>
<PAGE>

PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The General Partner of the Partnership is Landsing Partners-III (LP-III), 
which has sole responsibility for all aspects of the Partnership's operations. 
LP-III is a General Partnership having two General Partners, Landsing Equities 
Corporation, a California corporation, which is the managing General Partner, 
and Partners '84, a California limited partnership.  
The organizers or promoters of the Partnership are Landsing Equities 
Corporation and Gary K. Barr.  Landsing Equities Corporation and Mr. Barr are 
the General Partners of Partners '84.  Mr. Barr holds the position with 
Landsing Equities Corporation indicated below.

Gary K. Barr is the Director and President of Landsing Equities Corporation. 
His principal occupation during the last five years or more, and certain other 
affiliations are set forth below:

Gary K. Barr.  Mr. Barr serves as Chairman and Chief Executive Officer of 
Pacific Coast Capital and has served as President and Director of Landsing 
Pacific Fund from its inception in November, 1988 to July, 1992.  Mr. Barr 
received a Bachelor of Science degree in Mechanical Engineering from Oklahoma 
State University in 1967 and a Master of Business Administration degree from 
the Stanford University Graduate School of Business in 1972.  Mr. Barr serves 
on the Board of Governors of the National Association of Real Estate 
Investment Trusts and on its Editorial Board.  Mr. Barr has served as 
President of the California Chapter of the Real Estate Securities and 
Syndication Institute of the National Association of Realtors ("RESSI"), which 
has awarded him the designation of Specialist in Real Estate Securities.  
Since 1983, he has served on the Board of Directors of Silicon Valley 
Bancshares.  In 1989 he authored the book J.K. Lasser's "Real Estate 
Investment Guide" published by Prentice Hall.  

ITEM 11.    EXECUTIVE COMPENSATION

The General Partner, Landsing Partners-III, and its General Partners, received 
no compensation from the Partnership.  The General Partner had contracted with 
The Landsing Corporation, an affiliate, for the provision of certain asset and 
property management and administrative services.  The Landsing Corporation had 
subcontracted these management and administrative services to its affiliate, 
Pacific Coast Capital.  During 1998, Pacific Coast Capital received management 
fees of $121,000, which were determined based on expenses incurred in order to 
operate the Partnership.  In addition, Pacific Coast Capital was paid $15,000 
for property management services.  These property management fees were based 
on monthly property revenues received.  See Item 13, "Certain Relationships 
and Related Transactions" for further information.

<PAGE>

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

No person or group is known by the Partnership to hold more than 5% of the 
Units of Limited Partnership.  The General Partner is not a direct or 
beneficial owner of any Units of the limited partnership.  The General Partner 
knows of no arrangements, including any pledge by any person of securities of 
the Partnership, the operation of which may at a subsequent date result in a 
change in control of the Partnership.

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Partnership had agreements with The Landsing Corporation and one of its 
affiliates, Pacific Coast Capital, pursuant to which the Partnership has paid 
various fees and compensation to these companies.  The Landsing Corporation is 
a closely-held corporation.

The Partnership had entered into a property management agreement with Pacific 
Coast Capital for the management of the Partnership's properties.  During 
1998, Pacific Coast Capital received $15,000 for property management.  

The Partnership had retained The Landsing Corporation to serve as advisor and 
to manage the day-to-day operations of the Partnership.  These services are 
provided under a subcontract with Pacific Coast Capital, an affiliate of The 
Landsing Corporation.  Pacific Coast Capital was to perform these services 
based on reimbursement of costs incurred but in no case were these to exceed 
those which the Partnership would have had to pay independent parties for 
comparable services.  During 1998, Pacific Coast Capital received expense 
reimbursements of $121,000.  

For information concerning the agreements between the Partnership and the 
affiliates of The Landsing Corporation, see Note 3 of Notes to Financial 
Statements filed as part of this Annual Report.

<PAGE>

PART IV

ITEM 14.    EXHIBITS AND REPORTS ON FORM 8-K

           (a)     1.     Financial Statements
                          See the Index at page F-1.

                   2.     Exhibits

                          See the Exhibit Index which immediately precedes 
                          the Exhibits filed with this Report.

           (b)     None.  

<PAGE>

SIGNATURES

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

                                  LDP-III

                          By:     Landsing Partners-III, General Partner

                             By:     Landsing Equities Corporation,
                                     General Partner

March 29, 1999                  By:     /s/ Gary K. Barr     
                                        GARY K. BARR, President and Director

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 
Partnership and in the capacities and on the dates indicated.

March 29, 1999                         /s/ Gary K. Barr                    
                                       GARY K. BARR, President and Director,
                                       Landsing Equities Corporation
                                      (Principal Executive Officer)

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.

No Annual Report or Proxy material has been sent to Partnership's security 
holders.  An Annual Report will be furnished to such security holders 
subsequent to the filing of the Partnership's Annual Report on Form 10-K.

<PAGE>

LDP-III

INDEX TO FINANCIAL STATEMENTS INCLUDED IN THE FORM 10-K

Report of Independent Accountants 

Financial Statements:

Balance Sheets, December 31, 1998 and 1997  

Statements of Operations for the Years Ended 
  December 31, 1998, 1997 and 1996    

Statements of Changes in Partners' Equity for the Years Ended 
  December 31, 1998, 1997 and 1996  

Statements of Cash Flows for the Years Ended 
  December 31, 1998, 1997 and 1996                    

Notes to Financial Statements    

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the General Partner of LDP-III:

We have audited the accompanying consolidated financial statements of LDP-III 
and subsidiary listed in the index on page F-1 of this Form 10-K as of 
December 31, 1998 and 1997, and the related statements of operations, 
partners' equity and cash flows for each of the three years in the period 
ended December 31, 1998.  These financial statements are the responsibility of 
the Partnership's management.  Our responsibility is to express an opinion on 
these financial statements.

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 management, as well as evaluating the overall financial 
statement presentation.  We believe that our audits provide a reasonable basis 
for our opinion.

As described in Note 2 to the financial statements, the management of LDP-III
Adopted a plan of liquidation on December 31, 1998 and the Partnership began
Liquidation shortly thereafter.

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the financial position of LDP-III as of December 31, 
1998 and 1997, and the results of their operations and their cash flows for 
each of the three years in the period ended December 31, 1998, in conformity 
with generally accepted accounting principles.  

DALBY, WENDLAND & CO., P.C.
Glenwood Springs, Colorado

March 9, 1999

<PAGE>
<TABLE>

LDP-III
BALANCE SHEETS, DECEMBER 31, 1998 and 1997
(In thousands except unit amounts)
<CAPTION>
                                                          1998          1997
<S>                                                   <C>           <C>
ASSETS

INVESTMENTS IN REAL ESTATE:
Rental properties (including property held for sale)  $      0      $  5,985
Accumulated depreciation                                     0        (2,817)
                                                             0         3,168

CASH AND CASH EQUIVALENTS (including interest bearing 
    deposits of $1,894 in 1998 and $1,947 in 1997)       1,894         2,008

OTHER ASSETS:
Accounts receivable                                         10            37
Prepaid expenses and deposits                                1             1
Loan costs and leasing commissions (net of accumulated
     amortization of $0 in 1998 and $359 in 1997)            0            90
Total other assets                                          11           128

TOTAL                                                 $  1,905      $  5,304

LIABILITIES AND PARTNERS' EQUITY

LIABILITIES:

Notes payable                                         $      0      $  2,452

Accounts payable                                             0             0
Other liabilities                                          115            84
Total liabilities                                          115         2,536

PARTNERS' EQUITY
General Partners Equity                                      0             0
Limited Partners Equity                                  1,790         2,768

TOTAL                                                 $  1,905      $  5,304

Equity Units Authorized   - Limited Partners            37,156        37,156
                          - General Partners                 0             0

Equity Units Outstanding  - Limited Partners            37,136        37,136
                          - General Partners                 0             0

The accompanying notes are an integral part of the financial statements.

</TABLE>
<PAGE>
<TABLE>

LDP-III

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(In thousands except unit amounts)

<CAPTION>
                                                1998      1997        1996
<S>                                           <C>      <C>        <C>
REVENUE:
Rental                                        $  672   $ 1,275    $  1,210
Interest                                          37        20          22
Total revenue                                    709     1,295       1,232

EXPENSE:
Interest                                         225       596         671
Operating                                        431       372         472
Depreciation and amortization                    239       319         325
General and administrative                       186       190         180
Total expense                                  1,081     1,477       1,648

LOSS BEFORE GAIN FROM SALE OF 
     REAL ESTATE                                (372)     (182)       (416)
GAIN FROM SALE OF REAL ESTATE                  1,065     3,020         223
NET INCOME (LOSS)                             $  693   $ 2,838     $  (193)

NET INCOME (LOSS)-LIMITED PARTNERS            $  693   $ 2,838     $  (193)

NET INCOME (LOSS)-GENERAL PARTNERS                 0         0           0

TOTAL                                         $  693   $ 2,838     $  (193)

NET INCOME (LOSS) PER PARTNERSHIP UNIT:
      LIMITED PARTNERS                        $   19   $    76     $    (5)
      GENERAL PARTNERS                             0         0           0

TOTAL                                         $   19   $    76     $    (5)

The accompanying notes are an integral part of the financial statements.

</TABLE>
<PAGE>
<TABLE>

LDP-III

STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(In thousands except unit amounts)

<CAPTION>
                         LIMITED PARTNERS                         TOTAL
                            NUMBER OF               GENERAL     PARTNERS'
                           PARTNERSHIP              PARTNER      EQUITY
                             UNITS       AMOUNT     AMOUNT      (DEFICIT)
<S>                          <C>        <C>         <C>         <C>
BALANCE, DECEMBER 31, 1995   37,136     $  679      $  0        $  679
Distribution-1996                         (556)        0          (556)
Net loss - 1996                           (193)        0          (193)

BALANCE, DECEMBER 31, 1996   37,136        (70)        0           (70)
Net Income - 1997                        2,838         0         2,838

BALANCE, DECEMBER 31, 1997   37,136     $2,768     $   0        $2,768
Distribution-1998                       (1,671)        0        (1,671)
Net Income-1998                            693         0           693

BALANCE, DECEMBER 31, 1998   37,136     $1,790     $   0        $1,790


The accompanying notes are an integral part of the financial statements.

</TABLE>
<PAGE>
<TABLE>

LDP-III

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(In thousands except unit amounts)

<CAPTION>
                                                   1998       1997       1996
<S>                                             <C>        <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                               $   693    $ 2,838    $  (193)
Adjustments to reconcile net loss to net cash
   used in operating activities:
Gain from sale of real estate                    (1,065)    (3,020)      (223)
Depreciation and amortization                       239        319        325
   Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable           27        (20)         7
Decrease in prepaid expenses and deposits             0          3          4
Decrease in accounts payable                          0          0         (5)
Increase (decrease) in other liabilities             31        (49)        29
NET CASH PROVIDED BY (USED IN)
   OPERATING ACTIVITIES                             (75)        71        (56)

CASH FLOWS FROM INVESTING ACTIVITIES:
Short-term investments                                0        298       (100)
Capital expenditures and construction              (109)      (247)       (51)
Deferred expenses                                    56         36         21
Net proceeds from sale of rental properties       1,733      1,796        660
NET CASH PROVIDED BY INVESTING ACTIVITIES         1,680      1,883        530

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on notes payable                           (48)       (31)       (45)
Distribution to unit holders                     (1,671)         0       (556)
NET CASH USED IN FINANCING ACTIVITIES            (1,719)       (31)      (601)

INCREASE (DECREASE) IN CASH 
   AND CASH EQUIVALENTS                            (114)     1,923       (127)
CASH AND CASH EQUIVALENTS 
   AT BEGINNING OF YEAR                           2,008         85        212
CASH AND CASH EQUIVALENTS AT END OF YEAR        $ 1,894    $ 2,008    $    85

The accompanying notes are an integral part of the financial statements.

</TABLE>
<PAGE>

LDP-III

NOTES TO FINANCIAL STATEMENTS
(In thousands except unit amounts)

1.   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization - LDP-III (the "Partnership") is a limited partnership organized 
under the laws of the state of California for the purpose of acquiring, 
operating, holding for investment, and ultimately selling income producing 
real estate.  Landsing Partners-III (the "General Partner") is a California 
General Partnership whose partners are Landsing Equities Corporation and 
Partners '84.  LDP-III was formed on August 30, 1983, and is authorized to 
continue until December 31, 2033, unless sooner terminated.  The Partnership 
commenced operations on December 9, 1983, with the acquisition of the first 
property.

During 1998, the Partnership owned one commercial office building located in
Idaho. (See Note 2 for the Plan of Liquidation.)

Investment in Subsidiary - On December 3, 1992 the Partnership transferred two 
of its properties, the 533 Cabot Building and the 391 Forbes Building to its 
wholly owned subsidiary, LDP-III Realty Service Corporation, which filed 
bankruptcy under Chapter 11 of the Federal Bankruptcy Code.  During 1993, the 
U.S. Bankruptcy case was dismissed and the 533 Cabot Building was disposed of.  
In 1996, 391 Forbes Building was sold and the subsidiary dissolved.  For 
financial reporting purposes the Partnership consolidated the operation of the 
subsidiary with that of the Partnership.  All significant intercompany 
transactions and balances have been eliminated.

Rental Properties - Rental properties are stated at the lower of cost or 
recoverable value.  Depreciation is computed by the straight-line method over 
estimated useful lives ranging from five to forty years. Tenant improvements 
are amortized over the lives of the related tenant leases which range from one 
to ten years.  Major additions are capitalized at cost, while maintenance and 
repairs which do not improve or extend the life of the respective assets are 
expensed currently.  When assets are retired or otherwise disposed of, the 
costs and related accumulated depreciation are removed from the accounts, and 
any gain or loss on disposal is included in the results of operations.

Loan Costs and Leasing Commissions - Amounts paid to obtain loans are deferred 
and amortized over the lives of the related notes payable, which range from 
four to ten years.  Leasing commissions are amortized over the lives of the 
tenant leases which range from one to ten years.

<PAGE>

Cash and Cash Equivalents - The Partnership considers all highly liquid 
investments with a maturity of three months or less from the date of purchase 
to be cash equivalents.  

Short-Term Investments - The Partnership invests in short-term federally 
insured certificates of deposits which mature on a date in excess of three 
months from the date of purchase.  The cost of these investments approximates 
market value.

Income Taxes - No provision for Federal or state income taxes has been made in 
the financial statements because these taxes are the obligation of the 
partners.

Net Income (Loss) Per Partnership Unit - Net income (loss) per Partnership 
unit is based on weighted average units outstanding after giving effect to net 
income (loss) allocated to the General Partner. 

Concentrations of Credit Risk - The Partnership's financial instruments that 
are exposed to concentrations of credit risk consist primarily of its cash and 
cash equivalents.  The Partnership's cash and cash equivalents are maintained 
in various accounts in FDIC insured institutions. This investment policy 
limits the Partnership's exposure to concentrations of credit risks.  

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

Impairment of Long-Lived Assets - The Partnership adopted Statement of 
Financial Accounting Standards (SFAS) No. 121,  "Accounting for the Impairment
of Long-lived Assets and for Long-lived Assets to be Disposed Of"
during 1996.  SFAS No. 121 requires that long-lived assets and certain 
identifiable intangibles to be held and used or disposed of by an entity and 
be reviewed for impairment whenever events or changes in circumstances 
indicate that the carrying amount of an asset may not be recoverable.  During 
1997 and 1996, the Partnership determined that no impairment loss need be 
recognized for applicable assets of continuing operations.

Accounting Pronouncements - In June 1996, the Financial Accounting Standards 
Board issued Statement No. 125 "Accounting for Transfers and Servicing of 
Financial Assets and Extinguishment of Liabilities."  This Statement is 
effective for transactions occurring after December 31, 1996.  However, 
transactions such as securities lending, repurchase agreements, dollar rolls, 
and similar secured financing arrangements are not subject to the provisions 
of SFAS No. 125 until January 1, 1998.  The standard provides that, following
a transfer of financial assets, an entity is to recognize the financial and 
servicing assets it controls and the liabilities it has incurred, derecognize 
financial assets when control has been surrendered and derecognize liabilities 
when extinguished.  The adoption of SFAS No. 125 had no impact on the 
Partnership's financial statements.  The impact of the delayed provisions is 
also not expected to be material.

<PAGE>

Effective January 1998, the Partnership adopted SFAS No. 130, "Reporting
Comprehensive Income."  SFAS No. 130 requires that an enterprise (a) classify
items of other comprehensive income by their nature in a financial statement,
and (b) display the accumulated balance of other comprehensive income 
separately from retained earnings and additional paid-in capital in the 
equity section of a statement of financial condition.  However, the 
Partnership does not have any items of comprehensive income at December 31, 
1998.

Effective January 1, 1998, the Partnership adopted SFAS No. 131, "Disclosures
About Segments of an Enterprise and Related Information."  However, the 
Partnership does not have any reportable segments at December 31, 1998.

Fair Value of Financial Instruments - The fair value of certain financial
assets carried at cost, including cash and cash equivalents and accounts
receivable, are considered to approximate their respective carrying values
due to their short-term nature and negligible credit losses.  The fair value
of accrued liabilities is considered to approximate their respective book
values due to their short-term nature.

Reclassifications - Certain amounts in the 1997 financial statements have
been reclassified to conform to the 1998 presentation.

<PAGE>
<TABLE>

2.  PLAN OF LIQUIDATION

The Partnership sold its final property on December 31, 1998.  As a result,
management adopted a plan to liquidate the Partnership.  At December 31,
1998, substantially all of the Partnership's assets consisted of cash and 
cash equivalents.  As part of the plan to liquidate, the Partnership made cash 
distributions to unit holders of $30 and $18.25 per unit on January 26, 1999 
and March 8, 1999, respectively.

3.   RELATED PARTY TRANSACTIONS

The Partnership has entered into agreements with The Landsing Corporation and 
one of its affiliates, Pacific Coast Capital.  Advisory services for 
investment management, general and administrative and property management are 
provided by Pacific Coast Capital under subcontract with The Landsing 
Corporation.  The General Partner is an affiliate of The Landsing Corporation.  
The related party transactions delineated in the Partnership Agreement with 
affiliates of the General Partner are as follows:

<CAPTION>
                                              1998        1997         1996
<S>                                         <C>         <C>          <C>
     General and Administrative Support     $  121      $  143       $  132
     Property Management                        15          30           32
     Leasing Commissions                         0          68            0

</TABLE>
<TABLE>

4.   RENTAL PROPERTIES

Rental properties at December 31 consist of the following:

<CAPTION>
                                             1998        1997          1996
<S>                                       <C>         <C>          <C>
     Land                                 $   0       $   213      $  1,384
     Building and improvements                0         5,772         9,126
                                              0         5,985        10,510

     Accumulated depreciation                 0        (2,817)       (4,086)
                                              0       $ 3,168      $  6,424

</TABLE>

Depreciation expense for the years ended December 31, 1998 and 1997 was $239 
and $319, respectively.

5.   REAL ESTATE

On August 16, 1996, the Partnership's wholly owned subsidiary, LDP-III Realty 
Services Corporation, sold its remaining property 391 Forbes.  The sale 
resulted in a gain for financial reporting purposes of $223, and cash proceeds 
of $660.  

On December 9, 1997, the Partnership sold the 1201 Cadillac property.  The 
sale resulted in a gain for financial reporting purposes of $3,020 and cash 
proceeds of $1,796.

On December 31, 1998, the Partnership sold its last property, Jefferson Place 
Office Building.  The sale price received by the registrant was $4,405, which 
resulted in a gain of $1,065 and cash proceeds of $1,733.

<PAGE>
<TABLE>

6.   NOTES PAYABLE

Notes Payable at December 31 consist of:
<CAPTION>
                                                             1998       1997
<S>                                                        <C>        <C>
First note payable collateralized by the Jefferson 
   Place Building bears interest at a rate of 9.25% 
   and requires payments of $23 per month.  This note 
   matures August 8, 2001.                                 $  0       $2,452

</TABLE>

During 1994, the General Partner re-negotiated the terms and conditions of the 
first mortgage loan on the Jefferson Place Office Building.  In return for a 
principal paydown of $50 the existing loan was reduced by $334 to an 
outstanding balance of $2,814 due and payable on August 8, 2001.  This 
reduction in the outstanding principal balance in excess of the principal 
payments made resulted in income to the partnership from forgiveness of debt 
of $334 in During 1995, the Partnership made an additional principal paydown
on this loan of $243.  The entire outstanding balance on this loan was paid on
December 31, 1998 from proceeds from the sale of the property.

<PAGE>
<TABLE>

7.   RECONCILIATION TO INCOME TAX BASIS OF ACCOUNTING

The differences at December 31, 1998, 1997 and 1996, between the basis of 
accounting used in the accompanying financial statements and the income tax 
basis used to file the Partnership's federal income tax return are as follows: 

<CAPTION>
                                                  1998        1997       1996
<S>                                            <C>         <C>        <C>
Net income (loss)                              $  693      $ 2,838    $ (193)
Loss on liquidation eliminated for
   financial statement purposes                     -            -      (147)
(Increase) decrease resulted from:
   Basis difference and accelerated depreciation  (61)        (233)     (182)
Capitalize for tax purposes-special tax assessment  -            -        23
Basis difference and accelerated depreciation 
   on property sold                             1,553          252         -
Prepayment penalty on property sold                 -         (265)        -
Investment - LDP-III Realty Service Corporation     -            -      (226)
Other                                             102          (20)       35
Net income (loss) - tax basis                  $2,287      $ 2,572    $ (690)

Taxable income (loss) per Partnership unit     $   62      $    69    $  (20)

Partners' equity                               $1,790      $ 2,768    $  (70)
Increase (decrease) resulted from:
   Basis of assets                                  -          698     1,504
   Accumulated depreciation                         -       (2,182)   (2,756)
   Syndication costs                            4,615        4,615     4,615
   Other                                          116            5        39

PARTNER'S EQUITY - TAX BASIS                   $6,521      $ 5,904   $ 3,332

</TABLE>
<PAGE>

8.   SUPPLEMENTAL DISCLOSURE ABOUT NON-CASH INVESTING AND FINANCING
     ACTIVITIES

In 1998, proceeds from the sale of property were used to retire debt of
$2,401.

In 1997, proceeds from the sale of property were used to retire debt of 
$4,408.

In 1996, proceeds from the sale of building were used to retire debt of $935.  
A note payable to a bank with a principal balance of $932 was refinanced.  The 
new loan balance was initially $950; the increase in principal of $18 was used 
for deferred loan fees and other closing costs.

9.   SUPPLEMENTAL CASH FLOW INFORMATION

The Partnership paid interest of $225 in 1998, $578 in 1997, and $671 in 1996. 
 
<PAGE>


E X H I B I T   I N D E X

Exhibit Number in
Accordance with
601 of
Regulation S-K             Exhibit Description          


3 & 4                      The Partnership Agreement included as Exhibit B to
                           the Prospectus dated March 1, 1984 (Incorporated by
                           reference to Exhibit 3.4 of Form 10-K for the year 
                           ended December 31, 1985)          

10.1                       Commercial Contract to Buy and Sell Real Estate 
                           dated December 11, 1989 between Highland Hall and 
                           Landsing Diversified Properties-III

10.2                       Bill of Sale and General Warranty Deed related to 
                           the sale of Silverado Apartments. (Incorporated by 
                           reference to Exhibit 10.1 and 10.2 of Form 8-K 
                           dated July 7, 1994)          

99                         ADDITIONAL EXHIBITS          

99.1                       The Prospectus dated March 1, 1984 (Incorporated by 
                           reference to Exhibit 28.1 of Form 10-K for the year 
                           ended December 31, 1985)          

99.2                       Supplement No. 12 to Prospectus (Incorporated by 
                           reference to Exhibit 28.2 of Form 10-K for the year 
                           ended December 31, 1985)


<PAGE>