<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q/A
                                 AMENDMENT NO. 1

(Mark One)

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

For the quarterly period ended           MARCH 31, 1997

                                       or

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

For the transition period from                       to

Commission file number                       0-10322

                         CORPORATE PROPERTY ASSOCIATES 3
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                               <C>       
         CALIFORNIA                                                               94-2708080
(State or other jurisdiction of incorporation or organization)    (I.R.S. Employer Identification No.)

50 ROCKEFELLER PLAZA, NEW YORK, NEW YORK                                        10020
(Address of principal executive offices)                                      (Zip Code)
</TABLE>

                                 (212) 492-1100
              (Registrant's telephone number, including area code)


   (Former name, former address and former fiscal year, if changed since last
                                    report)



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

                                                               [X] Yes    [ ] No


                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

      Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

                                                               [ ] Yes    [ ] No
<PAGE>   2
                         CORPORATE PROPERTY ASSOCIATES 3
                       (a California limited partnership)

                                     PART I

                         Item 1. - FINANCIAL INFORMATION

                                 BALANCE SHEETS


<TABLE>
<CAPTION>
                                          December 31,    March 31,
                                             1996           1997
                                          -----------    -----------
                                            (Note)       (Unaudited)
<S>                                       <C>            <C>        
      ASSETS:

Land and buildings, net of
   accumulated depreciation of
   $1,364,095 at December 31, 1996 and
   $1,207,398 at March 31, 1997           $ 4,709,275    $ 3,703,645
Net investment in direct
   financing leases                        25,689,201     25,803,919
Real estate held for sale                                  1,589,114
Cash and cash equivalents                   1,496,001        980,618
Other assets                                  635,873        948,815
                                          -----------    -----------

        Total assets                      $32,530,350    $33,026,111
                                          ===========    ===========


      LIABILITIES:

Note payable to affiliate                 $   500,000    $   500,000
Accounts payable and accrued expenses          63,200         74,150
Accounts payable to affiliates                 73,313         68,867
                                          -----------    -----------

        Total liabilities                     636,513        643,017
                                          -----------    -----------


      PARTNERS' CAPITAL:

General Partners                              214,807        224,623

Limited Partners (66,000 Limited
Partnership Units issued and
outstanding)                               31,679,030     32,158,471
                                          -----------    -----------
        Total partners' capital            31,893,837     32,383,094
                                          -----------    -----------

        Total liabilities and
          partners' capital               $32,530,350    $33,026,111
                                          ===========    ===========
</TABLE>

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

Note: The balance sheet at December 31, 1996 has been derived from the audited
      financial statements at that date.


                                      -2-
<PAGE>   3
                         CORPORATE PROPERTY ASSOCIATES 3
                       (a California limited partnership)



                        STATEMENTS OF INCOME (UNAUDITED)



<TABLE>
<CAPTION>
                                                                    Three Months Ended
                                                             March 31, 1996   March 31, 1997
                                                             --------------   --------------
<S>                                                          <C>              <C>       
Revenues:
  Interest income from direct financing leases                 $1,176,722       $1,199,237
  Rental income from operating leases                              76,261          370,223
  Other interest income                                            23,635           11,390
                                                               ----------       ---------- 
                                                                1,276,618        1,580,850
                                                               ----------       ----------

Expenses:
  Interest                                                         38,835           10,286
  Depreciation                                                     47,407           54,189
  General and administrative                                       86,144           88,669
  Property expense                                                217,336          103,378
                                                               ----------       ----------
                                                                  389,722          256,522
                                                               ----------       ----------


     Net income                                                $  886,896       $1,324,328
                                                               ==========       ==========


Net income allocated
  to General Partners                                          $   17,738       $   26,487
                                                               ==========       ==========


Net income allocated
  to Limited Partners                                          $  869,158       $1,297,841
                                                               ==========       ==========



Net income per Unit:
  (66,000 Limited
  Partnership Units)                                           $    13.17       $    19.66
                                                               ==========       ==========
</TABLE>

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


                                      -3-
<PAGE>   4
                         CORPORATE PROPERTY ASSOCIATES 3
                       (a California limited partnership)



                      STATEMENTS OF CASH FLOWS (UNAUDITED)



<TABLE>
<CAPTION>
                                                                   Three Months Ended
                                                                         March 31,
                                                               ---------------------------
                                                                   1996            1997
                                                               -----------     -----------
<S>                                                            <C>             <C>        
Cash flows from operating activities:
  Net income                                                   $   886,896     $ 1,324,328
  Adjustments to reconcile net income to
    net cash provided by operating activities:
    Depreciation                                                    47,407          54,189
    Income on direct financing leases in excess of
     scheduled rents and straight-line adjustments
     on operating leases                                           (92,203)       (188,043)
    Net change in operating assets and liabilities                  23,246        (233,113)
                                                               -----------     -----------

     Net cash provided by operating activities                     865,346         957,361
                                                               -----------     -----------

Cash flows from investing activities:
  Additional capitalized costs                                                    (637,673)      
  Proceeds from sale of real estate                              1,853,816       
                                                               -----------     -----------

     Net cash provided by (used in) investing activities         1,853,816        (637,673)
                                                               -----------     -----------

Cash flows from financing activities:
  Distributions to partners                                       (820,138)       (835,071)
  Partial prepayment of note payable to affiliate               (1,500,000)
                                                               -----------     -----------

     Net cash used in financing activities                      (2,320,138)       (835,071)
                                                               -----------     -----------


       Net increase (decrease) in cash and cash equivalents        399,024        (515,383)

    Cash and cash equivalents, beginning of period               1,158,302       1,496,001
                                                               -----------     -----------

       Cash and cash equivalents, end of period                $ 1,557,326     $   980,618
                                                               ===========     ===========



Supplemental disclosure of cash flows information:

         Interest paid                                         $    55,644     $    10,286
                                                               ===========     ===========
</TABLE>

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


                                      -4-
<PAGE>   5
                         CORPORATE PROPERTY ASSOCIATES 3
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)



Note 1. Basis of Presentation:

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included. For
further information, refer to the financial statements and footnotes thereto
included in the Partnership's Annual Report on Form 10-K for the year ended
December 31, 1996.


Note 2. Distributions to Partners:

Distributions declared and paid to partners during the three months ended March
31, 1997 are summarized as follows:

<TABLE>
<CAPTION>
  Quarter Ended      General Partners    Limited Partners    Per Limited Partner Unit
-----------------    ----------------    ----------------    ------------------------
<S>                  <C>                 <C>                 <C>   
December 31, 1996         $16,671             $818,400                $12.40
                          =======             ========                ======
</TABLE>



A distribution of $12.41 per Limited Partner Unit for the quarter ended March
31, 1997 was declared and paid in April 1997.



Note 3. Transactions with Related Parties:

For the three-month periods ended March 31, 1996 and 1997, the Partnership
incurred management fees of $45,262 and $59,321, respectively, and general and
administrative expense reimbursements of $24,846 and $21,518, respectively.
Management believes that ultimate payment of a preferred return to the General
Partners of $731,823, based upon cumulative proceeds of sales of assets, is
reasonably possible but not probable, as defined pursuant to Statement of
Financial Accounting Standards No. 5.

The Partnership, in conjunction with certain affiliates, is a participant in a
cost sharing agreement for the purpose of renting and occupying office space.
Under the agreement, the Partnership pays its proportionate share of rent and
other costs of occupancy. Net expenses incurred for the three months ended March
31, 1996 and 1997 were $24,613 and $17,584, respectively.


                                      -5-
<PAGE>   6
                         CORPORATE PROPERTY ASSOCIATES 3
                       (a California limited partnership)

             NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)




Note 4. Industry Segment Information:

The Partnership's operations consist of the investment in and the leasing of
industrial and commercial real estate. For the three-month periods ended March
31, 1996 and 1997, the Partnership earned its total operating revenues (rental
income plus interest income from financing leases) from the following lease
obligors:

<TABLE>
<CAPTION>
                                        1996       %             1997       %
                                        ----      ---            ----      ---
<S>                                 <C>           <C>        <C>           <C>
Gibson Greetings, Inc.              $  636,133     51%       $  649,923     42%
Cleo, Inc.                             334,145     27           342,889     22
Hughes Markets, Inc.                    76,261      6           242,349     15
AT&T Corporation                       114,651      9           114,789      7
New Valley Corporation                  91,793      7            91,637      6
Excel Telecommunications, Inc.                                   80,959      5
Sports & Recreation, Inc.                                        46,914      3
                                    ----------    ---        ----------    ---
                                    $1,252,983    100%       $1,569,460    100%
                                    ==========    ===        ==========    ===
</TABLE>




Note 5. Property in Moorestown, New Jersey:

In April 1997, the Partnership and Corporate Property Associates 2 ("CPA(R):2"),
an affiliate, who own a property in Moorestown, New Jersey as tenants-in-common
with approximate 61% and 39% interests, respectively, entered into an agreement
to sell the property for $4,500,000 (of which the Partnership's share is
approximately $2,745,000), less selling costs.

The property is currently subject to a net lease with Sports & Recreation, Inc.
("Sports & Recreation"). During 1996, Sports & Recreation indicated to the
Partnership and CPA(R):2 that it had decided not to occupy the property and
would seek to terminate the lease. Sports & Recreation has continued to meet its
lease obligations.

 The sales agreement provides the purchaser a period of 90 days to complete its
inspection of the property. If based on the inspection, the purchaser is not
satisfied, the purchaser may elect to terminate the sales agreement. The sale is
also contingent upon the purchaser reaching a lease termination agreement with
Sports and Recreation and obtaining permits and approvals from the township of
Moorestown prior to October 1, 1997. If all the conditions are met, the sale
will occur between August 1, 1997 and December 15, 1997. There is no assurance
that the sale will be completed.

In connection with the proposed sale, the $1,589,114 carrying value of the
property has been classified as real estate held for sale.


                                      -6-
<PAGE>   7
                         CORPORATE PROPERTY ASSOCIATES 3
                       (a California limited partnership)





                                   SIGNATURES






      Pursuant to the requirements 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.


                                  CORPORATE PROPERTY ASSOCIATES 3
                                  (a California limited partnership)

                                  By:  W.P. CAREY & CO., INC.



    09/03/97                      BY:   /s/ Steven M. Berzin
----------------                       ----------------------------------
     Date                              Steven M. Berzin
                                       Executive Vice President and
                                       Chief Financial Officer
                                       (Principal Financial Officer)



    09/03/97                      BY:   /s/ Claude Fernandez
----------------                       ----------------------------------
     Date                              Claude Fernandez
                                       Executive Vice President and
                                       Chief Administrative Officer
                                       (Principal Accounting Officer)


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