UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549



Form 10-QSB/A No. 1



(Mark One)

[X]

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the quarterly period ended June 30, 2007





[ ]

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT





For the transition period from _________to _________



Commission file number 0-10260





SHELTER PROPERTIES III

(Exact name of small business issuer as specified in its charter)







South Carolina

57-0718508

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)



55 Beattie Place, P.O. Box 1089

Greenville, South Carolina  29602

(Address of principal executive offices)



(864) 239-1000

(Issuer's telephone number)





Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 ___



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









Explanatory Note



Shelter Properties III (the Partnership or Registrant) is filing this Amendment on Form 10-QSB  (the Amendment) for the sole purpose of amending the Partnerships Quarterly Report on Form 10-QSB for the quarterly period ended June 30, 2007 (the Original Filing).  This Amendment adjusts the gain on sale recorded for the sale of one of the  Partnerships investment properties, Essex Park Apartments, during the three and six months ended June 30, 2007 due to the Partnership not properly accruing for property improvements and replacements purchased prior to the sale of Essex Park Apartments. Because of the error noted above, the Partnerships financial statements showed an overstatement of net income for the three and six months ended June 30, 2007, an understatement of liabilities, an overstatement of net assets in liquidation and an overstatement of limited partners capital as of June 30, 2007.  This error has been corrected in the restated consolidated financial statements.



Please note that this amendment restates only those items of the Original Filing that were affected by the above-described corrections.  Furthermore, the information contained in this Amendment is as of the date of the Original Filing and does not reflect any subsequent information or events occurring after the date of the Original Filing.  Therefore, you should read this Amendment together with the other documents that the Partnership has filed with the United States Securities and Exchange Commission (the SEC) subsequent to the filing of the Original Filing.  Information in such reports and documents updates and supersedes certain information contained in this Amendment.





PART I  FINANCIAL INFORMATION







ITEM 1.

FINANCIAL STATEMENTS









SHELTER PROPERTIES III

CONSOLIDATED STATEMENT OF NET ASSETS IN LIQUIDATION

(Unaudited)

(as restated  see Note A)

(in thousands)



June 30, 2007



|                                                             |  |         
|------------------------------------------------------------ |  | --------
|Assets                                                       |  |         
|Cash and cash equivalents                                    |  | $  5,745
|Receivables and deposits                                     |  | 409     
|Other assets                                                 |  | 87      
|                                                             |  | 6,241   
|Liabilities                                                  |  |         
|Accounts payable                                             |  | 690     
|Other liabilities                                            |  | 121     
|Due to affiliates (Note

D

)                                |  | 201     
|Estimated costs during the period of liquidation (Note

C

) |  | 105     
|                                                             |  | 1,117   
|Net assets in liquidation                                    |  | $5,124  





See Accompanying Notes to Consolidated Financial Statements











SHELTER PROPERTIES III



CONSOLIDATED STATEMENTS OF DISCONTINUED OPERATIONS

(Unaudited)

(in thousands, except per unit data)



|                                               |                    |                  |             |          | 
|---------------------------------------------- | ------------------ | ---------------- | ----------- | -------- | 
|                                               | Three Months Ended | Six Months Ended
|                                               | June 30,           | June 30,        
|                                               | 2007               | 2006             | 2007        | 2006    
|                                               | (restated         |                  | (restated - |         
|                                               | see Note A)        |                  | see Note A) |         
|                                               |                    |                  |             |         
|Income from continuing operations              | $     --           | $    --          | $    --     | $    -- 
|Loss from discontinued operations (Note

B

): |                    |                  |             |         
|Revenues                                       |                    |                  |             |         
|Rental income                                  | 732                | 701              | 1,442       | 1,392   
|Other income                                   | 91                 | 84               | 172         | 163     
|Total revenues                                 | 823                | 785              | 1,614       | 1,555   
|                                               |                    |                  |             |         
|Expenses                                       |                    |                  |             |         
|Operating                                      | 619                | 474              | 1,138       | 897     
|General and administrative                     | 49                 | 40               | 94          | 82      
|Depreciation                                   | 169                | 155              | 327         | 302     
|Interest                                       | 192                | 171              | 378         | 343     
|Property taxes                                 | 56                 | 64               | 124         | 128     
|Loss on extinguishment of debt                 | 1,366              | --               | 1,366       | --      
|Total expenses                                 | 2,451              | 904              | 3,427       | 1,752   
|                                               |                    |                  |             |         
|Loss from discontinued operations              | (1,628)            | (119)            | (1,813)     | (197)   
|Casualty gain (Note

F

)                      | --                 | 10               | --          | 10      
|Gain on sale of discontinued operations        |                    |                  |             |         
|(Note

E

)                                    | 11,858             | --               | 11,858      | --      
|                                               |                    |                  |             |         
|Net income (loss)                              | $10,230            | $(109)           | $10,045     | $(187)  
|                                               |                    |                  |             |         
|Net income (loss) allocated to general         |                    |                  |             |         
|partner                                        | $    85            | $    (1)         | $    83     | $    (2)
|Net income (loss) allocated to limited         |                    |                  |             |         
|partners                                       | 10,145             | (108)            | 9,962       | (185)   
|                                               |                    |                  |             |         
|                                               | $10,230            | $(109)           | $10,045     | $(187)  
|Per limited partnership unit:                  |                    |                  |             |         
|Loss from discontinued                         |                    |                  |             |         
|operations                                     | $(29.30)           | $ (1.96)         | $(32.63)    | $ (3.36)
|Gain on sale of discontinued                   |                    |                  |             |         
|operations                                     | 213.75             | --               | 213.75      | --      
|                                               |                    |                  |             |         
|Net income (loss) per limited                  |                    |                  |             |         
|partnership unit                               | $184.45            | $(1.96)          | $181.12     | $(3.36) 





See Accompanying Notes to Consolidated Financial Statements















SHELTER PROPERTIES III

CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL/NET ASSETS

IN LIQUIDATION

(Unaudited)

(in thousands, except unit data)







|                                   |             |          |          |         
|---------------------------------- | ----------- | -------- | -------- | --------
|                                   | Limited     |          |         
|                                   | Partnership | General  | Limited  |         
|                                   | Units       | Partner  | Partners | Total   
|                                   |             |          |          |         
|Original capital contributions     | 55,000      | $2       | $27,500  | $27,502 
|                                   |             |          |          |         
|Partners' deficit                  |             |          |          |         
|at December 31, 2006               | 55,000      | $   (83) | $(4,733) | $(4,816)
|                                   |             |          |          |         
|Net income for the six months      |             |          |          |         
|ended June 30, 2007

, as restated | --          | 83       | 9,962    | 10,045  
|                                   |             |          |          |         
|Partners' capital                  |             |          |          |         
|at June 30, 2007

, as restated    |             |          |          |         
|(see Note A)                       | 55,000      | $--      | $5,229   | 5,229   
|                                   |             |          |          |         
|Adjustment to liquidation basis    |             |          |          |         
|(Note

C

)                        |             |          |          | (105)   
|                                   |             |          |          |         
|Net assets in liquidation at       |             |          |          |         
|June 30, 2007

, as restated       |             |          |          | $5,124  





See Accompanying Notes to Consolidated Financial Statements











SHELTER PROPERTIES III



CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)



|                                                           |                  |          
|---------------------------------------------------------- | ---------------- | ---------
|                                                           | Six Months Ended
|                                                           | June 30,        
|                                                           | 2007             | 2006     
|                                                           | (Restated -      |          
|                                                           | see Note A)      |          
|Cash flows from operating activities:                      |                  |          
|Net income (loss)                                          | $

10,045        | $   (187)
|Adjustments to reconcile net income (loss) to net cash     |                  |          
|(used in) provided by operating activities:                |                  |          
|Depreciation                                               | 327              | 302      
|Amortization of loan costs                                 | 6                | 6        
|Bad debt expense                                           | 40               | 35       
|Loss on extinguishment of debt                             | 1,366            | --       
|Gain on sale of discontinued operations                    | (11,858)         | --       
|Casualty gain                                              | --               | (10)     
|Change in accounts:                                        |                  |          
|Receivables and deposits                                   | (138)            | (39)     
|Other assets                                               | 78               | (34)     
|Accounts payable                                           | 286              | 79       
|Tenant security deposit liabilities                        | (81)             | 3        
|Accrued property taxes                                     | --               | 90       
|Due to affiliates                                          | (9)              | 70       
|Other liabilities                                          | (132)            | 30       
|Net cash (used in) provided by operating activities        | (70)             | 345      
|                                                           |                  |          
|Cash flows from investing activities:                      |                  |          
|Property improvements and replacements                     | (780)            | (270)    
|Net deposits to restricted escrows                         | (1)              | (1)      
|Insurance proceeds received                                | --               | 12       
|Net proceeds from sale of discontinued operations          | 17,237           | --       
|Net cash provided by (used in) investing activities        | 16,456           | (259)    
|                                                           |                  |          
|Cash flows from financing activities:                      |                  |          
|Advances from affiliates                                   | 564              | 79       
|Payment on advances from affiliate                         | (1,593)          | --       
|Payments on mortgage notes payable                         | (176)            | (164)    
|Repayment of mortgage notes payable                        | (8,287)          | --       
|Prepayment penalty paid                                    | (1,192)          | --       
|Net cash used in financing activities                      | (10,684)         | (85)     
|                                                           |                  |          
|Net increase in cash and cash equivalents                  | 5,702            | 1        
|                                                           |                  |          
|Cash and cash equivalents at beginning of period           | 43               | 138      
|                                                           |                  |          
|Cash and cash equivalents at end of period                 | $5,745           | $139     
|                                                           |                  |          
|Supplemental disclosure of cash flow information:          |                  |          
|Cash paid for interest                                     | $491             | $315     
|Supplemental disclosure of non-cash activity:              |                  |          
|Property improvements and replacements in accounts payable | $200             | $51      



Included in property improvements and replacements for the six months ended June 30, 2007 and 2006 are approximately $137,000 and $38,000, respectively, of property improvements and replacements, which were included in accounts payable at December 31, 2006 and 2005.



See Accompanying Notes to Consolidated Financial Statements











SHELTER PROPERTIES III

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



Note A  Correction of an Error



For the three and six months ended June 30, 2007, the Partnership did not properly accrue for property improvements and replacements purchased prior to the sale of Essex Park Apartments. This resulted in the corresponding gain on sale being calculated incorrectly.  The following tables set forth the adjustments to the balance sheet as of June 30, 2007 and the statement of operations for the three and  six months ended June 30, 2007.  The only financial statement line items included below are those that have been restated from the originally reported amounts.



|                                                    |                                      |                                     |               |            
|--------------------------------------------------- | ------------------------------------ | ----------------------------------- | ------------- | -----------
|                                                    | As of June 30, 2007                  |                                    
|                                                    | (in thousands)                       |                                    
|                                                    |                                      |                                    
|                                                    | As Previously                        | As Restated                         |              
|                                                    | Reported                             |                                     |              
|                                                    |                                      |                                     |              
|Accounts payable                                    | $    490                             | $    690                            |              
|Total liabilities                                   | 917                                  | 1,117                               |              
|Net assets in liquidation                           | 5,324                                | 5,124                               |              
|                                                    |                                      |                                     |              
|                                                    |                                      |                                     |              
|                                                    | Three Months Ended
June 30, 2007     | Six Months Ended
June 30, 2007     
|                                                    | (in thousands, except per unit data) | (in thousands, except per unit data
|                                                    |                                      |                                    
|                                                    | As Previously                        | As Restated                         | As Previously | As Restated
|                                                    | Reported                             |                                     | Reported      |            
|Gain on sale of discontinued                        | $12,058                              | $11,858                             | $12,058       | $11,858    
|operations                                          |                                      |                                     |               |            
|Net income                                          | 10,430                               | 10,230                              | 10,245        | 10,045     
|Net income allocated to
limited partners            | 10,345                               | 10,145                              | 10,162        | 9,962      
|                                                    |                                      |                                     |               |            
|Gain on sale of discontinued
operations per limited |                                      |                                     |               |            
|partnership unit                                    | 217.39                               | 213.75                              | 217.39        | 213.75     
|Net income per limited
partnership unit             | 188.09                               | 184.45                              | 184.76        | 181.12     



Note

B

  Basis of Presentation



As of June 30, 2007, Shelter Properties III (the Partnership or Registrant) adopted the liquidation basis of accounting due to the sale of its remaining investment properties (as discussed in Note

E

  Disposition of Investment Properties). The general partner responsible for management of the Partnerships business is Shelter Realty III Corporation, a South Carolina corporation (the Corporate General Partner) a subsidiary of Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust.



As a result of the decision to liquidate the Partnership, the Partnership changed its basis of accounting for its consolidated financial statements at June 30, 2007, to the liquidation basis of accounting.  Consequently, assets have been valued at estimated net realizable value and liabilities are presented at their estimated settlement amounts, including estimated costs associated with carrying out the liquidation of the Partnership. The valuation of assets and liabilities necessarily requires many estimates and assumptions and there are substantial uncertainties in carrying out the liquidation. The actual realization of assets and settlement of liabilities could be higher or lower than amounts indicated as they are based upon the Corporate General Partners estimates as of the date of the consolidated financial statements.



The Corporate General Partner estimates that the liquidation process will be completed by June 30, 2008.  Because the success in realization of assets and the settlement of liabilities is based on the Corporate General Partners best estimates, the liquidation period may be shorter than projected or it may be extended beyond the projected date of liquidation.



The accompanying unaudited consolidated financial statements of the Partnership have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B.  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 the Corporate General Partner, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  For further information, refer to the consolidated financial statements and footnotes included in the Partnerships Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006.



In accordance with Statement of Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the accompanying consolidated statements of discontinued operations for the three and six months ended June 30, 2007 and 2006 are presented to reflect the operations of both of the Partnerships investment properties as discontinued operations as a result of the sale of both of the investment properties on June 29, 2007.



Certain reclassifications have been made to the 2006 balances to conform to the 2007 presentation.



Note

C

  Adjustment to Liquidation Basis of Accounting



In accordance with the liquidation basis of accounting, at June 30, 2007, assets were adjusted to their estimated net realizable value and liabilities were adjusted to their estimated settlement amount. The net adjustment required to convert to the liquidation basis of accounting was a decrease in net assets of approximately $105,000, which is included in the Consolidated Statement of Changes in Partners (Deficit) Capital/Net Assets in Liquidation. The net adjustments are summarized as follows:



|                                                |               
|----------------------------------------------- | --------------
|                                                | Decrease in   
|                                                | Net Assets    
|                                                | (in thousands)
|                                                |               
|Adjustment of other assets and liabilities, net | $105          



Note

D

 - Transactions with Affiliated Parties



The Partnership has no employees and depends on the Corporate General Partner and its affiliates for the management and administration of all Partnership activities. The Partnership Agreement provides for certain payments to affiliates for services and reimbursement of certain expenses incurred by affiliates on behalf of the Partnership.



Affiliates of the Corporate General Partner received 5% of gross receipts from the Partnership's properties as compensation for providing property management services. The Partnership paid to such affiliates approximately $81,000 and $77,000 during the six months ended June 30, 2007 and 2006 respectively, which is included in operating expenses on the accompanying consolidated statements of discontinued operations.



An affiliate of the Corporate General Partner charged the Partnership for reimbursement of accountable administrative expenses amounting to approximately $124,000 and $73,000 for the six months ended June 30, 2007 and 2006, respectively, which is included in general and administrative expenses and gain on sale of discontinued operations.  The portion of these reimbursements included in gain on sale of discontinued operations for the six months ended June 30, 2007 and 2006 are construction management services provided by an affiliate of the Corporate General Partner of approximately $62,000 and $26,000, respectively.  At June 30, 2007, the Partnership owed approximately $201,000 for accountable administrative expenses, which is included in due to affiliates on the accompanying consolidated statement of net assets in liquidation. This amount was paid in full subsequent to June 30, 2007 with the funds from the sale of the Partnerships properties.



During 1986, a liability of approximately $185,000 was incurred to the general partners for sales commissions earned.  In connection with the sale of North River Village Apartments in 2002, the Corporate General Partner earned a commission of approximately $68,000 for its assistance in the sale.  In connection with the sale of Colony House Apartments in 2004, the Corporate General Partner earned a commission of approximately $61,000.  Payment of such commissions is subordinate to the limited partners receiving a cumulative 7% return on their investment. During the six months ended June 30, 2007, the Corporate General Partner determined that the limited partners would not receive both their adjusted capital investment and applicable return from the sale of the Partnerships remaining investment properties. Therefore, the Corporate General Partner reversed the sales commissions previously accrued and mentioned above. This amount of approximately $314,000 is included in gain on sale of discontinued operations for the three and six months ended June 30, 2007.



Pursuant to the Partnership Agreement, an affiliate of the Corporate General Partner advanced the Partnership approximately $564,000 and $79,000 during the six months ended June 30, 2007 and 2006 for operating expenses at both Essex Park and Willowick Apartments and for property taxes at Essex Park Apartments. Interest on advances is charged at the prime rate plus 2%, or 10.25% at June 30, 2007. Interest expense was approximately $70,000 and $23,000 for the six months ended June 30, 2007 and 2006, respectively. During the six months ended June 30, 2007, the Partnership repaid advances and accrued interest of approximately $1,733,000. There were no such repayments during the six months ended June 30, 2006.



The Partnership insured its properties up to certain limits through coverage provided by AIMCO which is generally self-insured for a portion of losses and liabilities related to workers compensation, property casualty, general liability, and vehicle liability.  The Partnership insured its properties above the AIMCO limits through insurance policies obtained by AIMCO from insurers unaffiliated with the Corporate General Partner.  During the six months ended June 30, 2007, the Partnership was charged by AIMCO and its affiliates approximately $100,000 for hazard insurance coverage and fees associated with policy claims administration.  The Partnership was charged by AIMCO and its affiliates approximately $76,000 for insurance coverage and fees associated with policy claims administration during the year ended December 31, 2006.



Note

E

  Disposition of Investment Properties



On June 29, 2007, the Partnership sold its last remaining investment properties, Essex Park Apartments and Willowick Apartments, to third parties. In addition to Essex Park Apartments and Willowick Apartments, affiliates of the third parties also purchased eight other apartment properties; all of which were owned by entities affiliated with AIMCO Properties, L.P., an affiliate of the Corporate General Partner of the Partnership. The total sales price for all ten apartment properties was $95,800,000 of which $10,900,000 and $6,500,000 represent the portions of the sales price allocated to Essex Park Apartments and Willowick Apartments, respectively.



The net proceeds realized by the Partnership for Essex Park Apartments was approximately $10,771,000 after payment of closing costs.  The Partnership used approximately $5,744,000 to repay the mortgage encumbering the property and approximately $826,000 for a prepayment penalty.  The Partnership realized a gain of approximately

$6,604,000

 as a result of the sale.  The propertys operations of approximately $235,000 and $69,000 are included in loss from discontinued operations and include revenues of approximately $1,062,000 and $1,047,000 for the six months ended June 30, 2007 and 2006, respectively.  In addition, the Partnership recorded a loss on extinguishment of debt of approximately $941,000 as a result of the write-off of unamortized loan costs of approximately $115,000 and a prepayment penalty of approximately $826,000. This amount is included in loss from discontinued operations.



The net proceeds realized by the Partnership for Willowick Apartments was approximately $6,466,000 after payment of closing costs.  The Partnership used approximately $2,543,000 to repay the mortgage encumbering the property and approximately $366,000 for a prepayment penalty. The Partnership realized a gain of approximately $4,940,000 as a result of the sale. The propertys operations of approximately $40,000 and $23,000 are included in loss from discontinued operations and include revenues of approximately $550,000 and $517,000 for the six months ended June 30, 2007 and 2006, respectively.  In addition, the Partnership recorded a loss on extinguishment of debt of approximately $425,000 as a result of the write-off of unamortized loan costs of approximately $59,000 and a prepayment penalty of approximately $366,000.  This amount is included in loss from discontinued operations.



Note

F

  Casualty Event



During December 2005, one of the Partnerships investment properties, Willowick Apartments, incurred approximately $17,000 in damages from an ice storm.  During the six months ended June 30, 2006, the Partnership received insurance proceeds of approximately $12,000 and wrote off undepreciated damaged assets of approximately $2,000 resulting in a casualty gain of approximately $10,000.



Note

G

 - Contingencies



In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, its Corporate General Partner and several of their affiliated partnerships and corporate entities. The action purported to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) that are named as nominal defendants, challenging, among other things, the acquisition of interests in certain Corporate General Partner entities by Insignia Financial Group, Inc. ("Insignia") and entities that were, at one time, affiliates of Insignia; past tender offers by the Insignia affiliates to acquire limited partnership units; management of the partnerships by the Insignia affiliates; and the series of transactions which closed on October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties Trust, respectively, were merged into AIMCO. The plaintiffs sought monetary damages and equitable relief, including judicial dissolution of the Partnership. In addition, during the third quarter of 2001, a complaint captioned Heller v. Insignia Financial Group (the "Heller action") was filed against the same defendants that are named in the Nuanes action. On or about August 6, 2001, plaintiffs filed a first amended complaint. The Heller action was brought as a purported derivative action, and asserted claims for, among other things, breach of fiduciary duty, unfair competition, conversion, unjust enrichment, and judicial dissolution. On January 28, 2002, the trial court granted defendants motion to strike the complaint.  Plaintiffs took an appeal from this order.



On January 8, 2003, the parties filed a Stipulation of Settlement in proposed settlement of the Nuanes action and the Heller action. On June 13, 2003, the court granted final approval of the settlement and entered judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector ("Objector") filed an appeal (the Appeal) seeking to vacate and/or reverse the order approving the settlement and entering judgment thereto. On May 4, 2004, the Objector filed a second appeal challenging the courts use of a referee and its order requiring Objector to pay those fees.



On March 21, 2005, the Court of Appeals issued opinions in both pending appeals.  With regard to the settlement and judgment entered thereto, the Court of Appeals vacated the trial courts order and remanded to the trial court for further findings on the basis that the state of the record is insufficient to permit meaningful appellate review.  The matter was transferred back to the trial court on June 21, 2005.  With regard to the second appeal, the Court of Appeals reversed the order requiring the Objector to pay referee fees. With respect to the related Heller appeal, on July 28, 2005, the Court of Appeals reversed the trial courts order striking the first amended complaint.



On August 18, 2005, Objector and his counsel filed a motion to disqualify the trial court based on a peremptory challenge and filed a motion to disqualify for cause on October 17, 2005, both of which were ultimately denied and/or struck by the trial court.  On or about October 13, 2005 Objector filed a motion to intervene and on or about October 19, 2005 filed both a motion to take discovery relating to the adequacy of plaintiffs as derivative representatives and a motion to dissolve the anti-suit injunction in connection with settlement.  On November 14, 2005, Plaintiffs filed a Motion For Further Findings pursuant to the remand ordered by the Court of Appeals. Defendants joined in that motion.  On February 3, 2006, the Court held a hearing on the various matters pending before it and ordered additional briefing from the parties and Objector.  On June 30, 2006, the trial court entered an order confirming its approval of the class action settlement and entering judgment thereto after the Court of Appeals had remanded the matter for further findings.  The substantive terms of the settlement agreement remain unchanged.  The trial court also entered supplemental orders on July 1, 2006, denying Objectors Motion to File a Complaint in Intervention, Objectors Motion for Leave of Discovery and Objectors Motion to Dissolve the Anti-Suit Injunction.  Notice of Entry of Judgment was served on July 10, 2006. On August 31, 2006, the Objector filed a Notice of Appeal to the Courts June 30, 2006 and July 1, 2006 orders.  On December 14, 2006, Objector filed his Appellants Brief.  The Partnership and its affiliates, as well as counsel for the Settlement Class, both filed Respondents Briefs on May 17, 2007.  Objector filed his response on August 3, 2007.  No hearing date has yet been scheduled.



The Corporate General Partner does not anticipate that any costs to the Partnership, whether legal or settlement costs, associated with these cases will be material to the Partnerships overall operations.



The Partnership is unaware of any other pending or outstanding litigation matters involving it or its investment properties that are not of a routine nature arising in the ordinary course of business.



Excise Taxes



The Partnership operated in a state that has recently assessed a state excise tax on other partnerships with similar structures and operations.  While the Partnership has not received an assessment from the state, the Partnership does not believe it should be subject to excise tax and would formally contest any such assessment.



Environmental



Various Federal, state and local laws subject property owners or operators to liability for management, and the costs of removal or remediation, of certain hazardous substances present on a property. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release or presence of the hazardous substances. The presence of, or the failure to manage or remedy properly, hazardous substances may adversely affect occupancy at affected apartment communities and the ability to sell or finance affected properties. In addition to the costs associated with investigation and remediation actions brought by government agencies, and potential fines or penalties imposed by such agencies in connection therewith, the presence of hazardous substances on a property could result in claims by private plaintiffs for personal injury, disease, disability or other infirmities. Various laws also impose liability for the cost of removal, remediation or disposal of hazardous substances through a licensed disposal or treatment facility. Anyone who arranges for the disposal or treatment of hazardous substances is potentially liable under such laws. These laws often impose liability whether or not the person arranging for the disposal ever owned or operated the disposal facility. In connection with the ownership, operation and management of its properties, the Partnership could potentially be liable for environmental liabilities or costs associated with its properties.



Mold



The Partnership is aware of lawsuits against owners and managers of multifamily properties asserting claims of personal injury and property damage caused by the presence of mold, some of which have resulted in substantial monetary judgments or settlements.  The Partnership has only limited insurance coverage for property damage loss claims arising from the presence of mold and for personal injury claims related to mold exposure.  Affiliates of the Corporate General Partner have implemented policies, procedures, third-party audits and training and the Corporate General Partner believes that these measures will prevent or eliminate mold exposure and will minimize the effects that mold may have on residents.  To date, the Partnership has not incurred any material costs or liabilities relating to claims of mold exposure or to abate mold conditions.  Because the law regarding mold is unsettled and subject to change the Corporate General Partner can make no assurance that liabilities resulting from the presence of or exposure to mold will not have a material adverse effect on the Partnerships consolidated financial condition or results of operations.



Note

H

  Subsequent Event



Subsequent to June 30, 2007, the Partnership distributed approximately $4,279,000 or $77.80 per limited partnership unit of sales proceeds to the limited partners.













Item 2.

Management's Discussion and Analysis or Plan of Operation



The matters discussed in this report contain certain forward-looking statements, including, without limitation, statements regarding future financial performance and the effect of government regulations. Actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors including, without limitation: national and local economic conditions; the terms of governmental regulations that affect the Registrant and interpretations of those regulations; litigation, including costs associated with prosecuting and defending claims and any adverse outcomes, and possible environmental liabilities. Readers should carefully review the Registrant's consolidated financial statements and the notes thereto, as well as the risk factors described in the documents the Registrant files from time to time with the Securities and Exchange Commission.



Results of Operations



As of June 30, 2007, the Partnership adopted the liquidation basis of accounting, due to the sale of its remaining investment properties, Essex Park Apartments and Willowick Apartments, on June 29, 2007. In accordance with Statement of Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the consolidated statements of discontinued operations included in Item 1. Financial Statements for the three and six months ended June 30, 2007 and 2006 are presented to reflect the operations of both of the Partnerships investment properties as discontinued operations as a result of the sale of both of the investment properties on June 29, 2007.  Prior to adopting the liquidation basis of accounting, the Partnerships net income was approximately

$10,230,000

 and

$10,045,000

 for the three and six months ended June 30, 2007 compared to net loss of approximately $109,000 and $187,000 for the three and six months ended June 30, 2006.  The increase in net income is due to a gain on sale of discontinued operations in 2007, partially offset by an increase in loss from discontinued operations.



On June 29, 2007, the Partnership sold its last remaining investment properties, Essex Park Apartments and Willowick Apartments, to third parties. In addition to Essex Park Apartments and Willowick Apartments, affiliates of the third parties also purchased eight other apartment properties; all of which were owned by entities affiliated with AIMCO Properties, L.P., an affiliate of the Corporate General Partner of the Partnership. The total sales price for all ten apartment properties was $95,800,000 of which $10,900,000 and $6,500,000 represent the portions of the sales price allocated to Essex Park Apartments and Willowick Apartments, respectively.



The net proceeds realized by the Partnership for Essex Park Apartments was approximately $10,771,000 after payment of closing costs.  The Partnership used approximately $5,744,000 to repay the mortgage encumbering the property and approximately $826,000 for a prepayment penalty.  The Partnership realized a gain of approximately

$6,604,000

 as a result of the sale.  The propertys operations of approximately $235,000 and $69,000 are included in loss from discontinued operations and include revenues of approximately $1,062,000 and $1,047,000 for the six months ended June 30, 2007 and 2006, respectively.  In addition, the Partnership recorded a loss on extinguishment of debt of approximately $941,000 as a result of the write-off of unamortized loan costs of approximately $115,000 and a prepayment penalty of approximately $826,000.  This amount is included in loss from discontinued operations.



The net proceeds realized by the Partnership for Willowick Apartments was approximately $6,466,000 after payment of closing costs.  The Partnership used approximately $2,543,000 to repay the mortgage encumbering the property and approximately $366,000 for a prepayment penalty. The Partnership realized a gain of approximately $4,940,000 as a result of the sale. The propertys operations of approximately $40,000 and $23,000 are included in loss from discontinued operations and include revenues of approximately $550,000 and $517,000 for the six months ended June 30, 2007 and 2006, respectively.  In addition, the Partnership recorded a loss on extinguishment of debt of approximately $425,000 as a result of the write-off of unamortized loan costs of approximately $59,000 and a prepayment penalty of approximately $366,000.  This amount is included in loss from discontinued operations.



Excluding the impact of the gain on sale of discontinued operations, the Partnerships loss from discontinued operations was approximately $1,628,000 and $1,813,000 for the three and six months ended June 30, 2007, respectively, as compared to loss from discontinued operations of approximately $119,000 and $197,000 for the three and six months ended June 30, 2006 respectively.  The increase in loss from discontinued operations is due to an increase in total expenses partially offset by an increase in total revenues.



Total revenues increased for the three and six months ended June 30, 2007 due to an increase in rental income. Other income remained relatively constant for both periods. The increase in rental income for both periods is due to an increase in occupancy and rental rates at Willowick Apartments.



During December 2005, one of the Partnerships investment properties, Willowick Apartments, incurred approximately $17,000 in damages from an ice storm.  During the six months ended June 30, 2006, the Partnership received insurance proceeds of approximately $12,000 and wrote off undepreciated damaged assets of approximately $2,000 resulting in a casualty gain of approximately $10,000.



Total expenses increased for both the three and six months ended June 30, 2007 primarily due to the loss on extinguishment of debt recognized in connection with the sales of Essex Park Apartments and Willowick Apartments on June 29, 2007 and increases in operating, interest, and depreciation expenses. Property tax and general and administrative expenses remained relatively constant for the comparable periods. Operating expenses increased during the three and six months ended June 30, 2007 as a result of increases in property, administrative, insurance, and maintenance expenses. Additionally, advertising expense increased for the six months ended June 30, 2007 due to increases in internet and print advertising and leasing promotions at Essex Park Apartments. Property expenses increased primarily due to an increase in salaries and related benefits at Essex Park Apartments and due to the accrual of costs associated with the sale of both of the Partnerships investment properties in June 2007. Administrative expense increased due to an increase in training and travel at Essex Park Apartments and Willowick Apartments. Insurance expense increased due to increases in general liability, umbrella, and flood insurance premiums at Essex Park Apartments.  Maintenance expense increased due to an increase in contract services at Essex Park Apartments.  Interest expense increased due to an increase in interest expense on advances from an affiliate of the Corporate General Partner due to a higher average balance outstanding and an increase in the interest rate charged on such advances, partially offset a decrease in interest expense on the mortgages encumbering the investment properties due to regularly scheduled principal payments, which reduced the carrying balance of the mortgages.   Depreciation expense increased due to assets placed in service at Essex Park Apartments over the past twelve months.



Included in general and administrative expenses are management reimbursements charged by the Corporate General Partner as allowed under the Partnership Agreement, costs associated with the quarterly and annual communications with investors and regulatory agencies and the annual audit required by the Partnership Agreement.















Liquidity and Capital Resources



The Partnership expects to liquidate by June 30, 2008 due to the sale of its remaining investment properties (see Note

B

 to the consolidated financial statements included in Item 1. Financial Statements).



At June 30, 2007, the Partnership had cash and cash equivalents of approximately $5,745,000 compared to approximately $139,000 at June 30, 2006.  Cash and cash equivalents increased approximately $5,702,000 since December 31, 2006 due to approximately $16,456,000 of cash provided by investing activities partially offset by approximately $10,684,000 and $70,000 of cash used in financing and operating activities, respectively. Cash provided by investing activities consisted of net proceeds from the sales of Essex Park Apartments and Willowick Apartments partially offset by property improvements and replacements and deposits to restricted escrows. Cash used in financing activities consisted of repayments of advances from affiliates, principal payments made on the mortgage encumbering the Partnership's investment property and repayment of the mortgage notes payable and prepayment penalties as a result of the sale of Essex Park Apartments and Willowick Apartments, partially offset by advances received from affiliates. The Partnership invests its working capital reserves in interest bearing accounts.



Essex Park Apartments



During the six months ended June 30, 2007, the Partnership completed approximately

$741,000

 of capital improvements at Essex Park Apartments, consisting primarily of structural upgrades, major landscaping, office computers, apartment model improvements, interior painting, and appliance and floor covering replacements. These improvements were funded from operating cash flow and advances from an affiliate of the Corporate General Partner. The property was sold to a third party on June 29, 2007.



Willowick Apartments



During the six months ended June 30, 2007, the Partnership completed approximately $102,000 of capital improvements at Willowick Apartments, consisting primarily of structural upgrades, office computers, grounds lighting, electrical upgrades and appliance and floor covering replacements. These improvements were funded from operating cash flow. The property was sold to a third party on June 29, 2007.



As a result of the decision to liquidate the Partnership, the Partnership changed its basis of accounting for its consolidated financial statements at June 30, 2007, to the liquidation basis of accounting.  Consequently, assets have been valued at estimated net realizable value and liabilities are presented at their estimated settlement amounts, including estimated costs associated with carrying out the liquidation of the Partnership. The valuation of assets and liabilities necessarily requires many estimates and assumptions and there are substantial uncertainties in carrying out the liquidation. The actual realization of assets and settlement of liabilities could be higher or lower than amounts indicated as they are based upon estimates of the Corporate General Partner as of the date of the consolidated financial statements.



In accordance with the liquidation basis of accounting, at June 30, 2007, assets were adjusted to their estimated net realizable value and liabilities were adjusted to their estimated settlement amount. The net adjustment required to convert to the liquidation basis of accounting was a decrease in net assets of approximately $105,000, which is included in the Consolidated Statement of Changes in Partners (Deficit) Capital/Net Assets in Liquidation. The net adjustments are summarized as follows:



|                                                |               
|----------------------------------------------- | --------------
|                                                | Decrease in   
|                                                | Net Assets    
|                                                | (in thousands)
|                                                |               
|Adjustment of other assets and liabilities, net | $105          



There were no distributions paid during the six months ended June 30, 2007 and 2006. Subsequent to June 30, 2007, the partnership distributed sales proceeds of approximately $4,279,000 or $77.80 per limited partnership unit to the limited partners. The Partnerships cash available for distribution will be reviewed on a quarterly basis. Future cash distributions will depend on the amount of cash remaining after fully liquidating the Partnership.



The Partnership Agreement provides for partners to receive distributions from the net proceeds of the sales of properties, the net proceeds from refinancings and net cash from operations as those terms are defined in the Partnership Agreement. The Partnership Agreement requires that the limited partners be furnished with a statement of Net Cash from Operations as such term is defined in the Partnership Agreement. Net Cash from Operations should not be considered an alternative to net income (loss) as an indicator of the Partnership's operating performance or to cash flows as a measure of liquidity. Below is a reconciliation of net cash (used in) provided by operating activities as disclosed in the consolidated statements of cash flows included in Item 1. Financial Statements to Net Cash from Operations as defined in the Partnership Agreement.



|                                                    |                          |       
|--------------------------------------------------- | ------------------------ | ------
|                                                    | For the Six Months Ended
|                                                    | June 30,                
|                                                    | 2007                     | 2006  
|                                                    | (in thousands)          
|Net cash (used in) provided by operating activities | $   (70)                 | $  345
|Payments on mortgage notes payable                  | (176)                    | (164) 
|Property improvements and replacements              | (780)                    | (270) 
|Net increase in restricted escrow                   | (1)                      | (1)   
|Changes in reserves for net operating               |                          |       
|assets/liabilities                                  | (44)                     | (234) 
|Net cash used in operations                         | $(1,071)                 | $(324)



Other



In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates owned 36,382 limited partnership units (the "Units") in the Partnership representing 66.15% of the outstanding Units at June 30, 2007. A number of these Units were acquired pursuant to tender offers made by AIMCO or its affiliates. Pursuant to the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the Corporate General Partner. As a result of its ownership of 66.15% of the outstanding Units, AIMCO and its affiliates are in a position to control all such voting decisions with respect to the Partnership. Although the Corporate General Partner owes fiduciary duties to the limited partners of the Partnership, the Corporate General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of the Corporate General Partner, as corporate general partner, to the Partnership and its limited partners may come into conflict with the duties of the Corporate General Partner to AIMCO as its sole stockholder.















ITEM 3.

CONTROLS AND PROCEDURES



(a)

Disclosure Controls and Procedures. The Partnerships management, with the participation of the principal executive officer and principal financial officer of the Corporate General Partner, who are the equivalent of the Partnerships principal executive officer and principal financial officer, respectively, has evaluated the effectiveness of the Partnerships disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this report. Based on such evaluation, the principal executive officer and principal financial officer of the Corporate General Partner, who are the equivalent of the Partnerships principal executive officer and principal financial officer, respectively, have concluded that, as of the end of such period, the Partnerships disclosure controls and procedures

were not effective due to the Partnerships failure to properly accrue for property improvements and replacements purchased prior to the sale of Essex Park Apartments. Actions taken include improving the education of accounting personnel to ensure the understanding and application of appropriate accounting treatment, as well as improving the Partnerships accounting review procedures.  The Partnerships management believes that, as of the date of this filing, the Partnerships ineffective disclosure controls have been fully remediated.



(b)

Internal Control Over Financial Reporting. There have not been any changes in the Partnerships internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Partnerships internal control over financial reporting.











PART II - OTHER INFORMATION





ITEM 1.

LEGAL PROCEEDINGS



In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, its Corporate General Partner and several of their affiliated partnerships and corporate entities. The action purported to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) that are named as nominal defendants, challenging, among other things, the acquisition of interests in certain Corporate General Partner entities by Insignia Financial Group, Inc. ("Insignia") and entities that were, at one time, affiliates of Insignia; past tender offers by the Insignia affiliates to acquire limited partnership units; management of the partnerships by the Insignia affiliates; and the series of transactions which closed on October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties Trust, respectively, were merged into AIMCO. The plaintiffs sought monetary damages and equitable relief, including judicial dissolution of the Partnership. In addition, during the third quarter of 2001, a complaint captioned Heller v. Insignia Financial Group (the "Heller action") was filed against the same defendants that are named in the Nuanes action. On or about August 6, 2001, plaintiffs filed a first amended complaint. The Heller action was brought as a purported derivative action, and asserted claims for, among other things, breach of fiduciary duty, unfair competition, conversion, unjust enrichment, and judicial dissolution. On January 28, 2002, the trial court granted defendants motion to strike the complaint.  Plaintiffs took an appeal from this order.



On January 8, 2003, the parties filed a Stipulation of Settlement in proposed settlement of the Nuanes action and the Heller action. On June 13, 2003, the court granted final approval of the settlement and entered judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector ("Objector") filed an appeal (the Appeal) seeking to vacate and/or reverse the order approving the settlement and entering judgment thereto. On May 4, 2004, the Objector filed a second appeal challenging the courts use of a referee and its order requiring Objector to pay those fees.



On March 21, 2005, the Court of Appeals issued opinions in both pending appeals.  With regard to the settlement and judgment entered thereto, the Court of Appeals vacated the trial courts order and remanded to the trial court for further findings on the basis that the state of the record is insufficient to permit meaningful appellate review.  The matter was transferred back to the trial court on June 21, 2005.  With regard to the second appeal, the Court of Appeals reversed the order requiring the Objector to pay referee fees. With respect to the related Heller appeal, on July 28, 2005, the Court of Appeals reversed the trial courts order striking the first amended complaint.



On August 18, 2005, Objector and his counsel filed a motion to disqualify the trial court based on a peremptory challenge and filed a motion to disqualify for cause on October 17, 2005, both of which were ultimately denied and/or struck by the trial court.  On or about October 13, 2005 Objector filed a motion to intervene and on or about October 19, 2005 filed both a motion to take discovery relating to the adequacy of plaintiffs as derivative representatives and a motion to dissolve the anti-suit injunction in connection with settlement.  On November 14, 2005, Plaintiffs filed a Motion For Further Findings pursuant to the remand ordered by the Court of Appeals. Defendants joined in that motion.  On February 3, 2006, the Court held a hearing on the various matters pending before it and ordered additional briefing from the parties and Objector.  On June 30, 2006, the trial court entered an order confirming its approval of the class action settlement and entering judgment thereto after the Court of Appeals had remanded the matter for further findings.  The substantive terms of the settlement agreement remain unchanged.  The trial court also entered supplemental orders on July 1, 2006, denying Objectors Motion to File a Complaint in Intervention, Objectors Motion for Leave of Discovery and Objectors Motion to Dissolve the Anti-Suit Injunction.  Notice of Entry of Judgment was served on July 10, 2006. On August 31, 2006, the Objector filed a Notice of Appeal to the Courts June 30, 2006 and July 1, 2006 orders.  On December 14, 2006, Objector filed his Appellants Brief.  The Partnership and its affiliates, as well as counsel for the Settlement Class, both filed Respondents Briefs on May 17, 2007.  Objector filed his response on August 3, 2007.  No hearing date has yet been scheduled.



The Corporate General Partner does not anticipate that any costs to the Partnership, whether legal or settlement costs, associated with these cases will be material to the Partnerships overall operations.



ITEM 5.

OTHER INFORMATION



None.



ITEM 6.

EXHIBITS



See Exhibit Index.











SIGNATURES







In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                           |                                     
|-------------------------- | ------------------------------------
|                           | SHELTER PROPERTIES III              
|                           |                                     
|                           | By:   Shelter Realty III Corporation
|                           | Corporate General Partner           
|                           |                                     
|Date:

November 19

, 2007 | By:   /s/Martha L. Long             
|                           | Martha L. Long                      
|                           | Senior Vice President               
|                           |                                     
|Date:

November 19

, 2007 | By:   /s/Stephen B. Waters          
|                           | Stephen B. Waters                   
|                           | Vice President                      











SHELTER PROPERTIES III



EXHIBIT INDEX



Exhibit

Description



3

See Exhibit 4(a)



4      (a)

Amended and Restated Certificate and Agreement of Limited Partnership, [included as Exhibit A to the Prospectus of Registrant dated September 2, 1981 contained in Amendment No. 1 to Registration Statement No. 2-72567 of Registrant filed September 2, 1981 (the "Prospectus") and incorporated herein by reference].



(b)

Subscription Agreements and Signature Pages [Filed with Amendment No. 1 of Registration Statement No. 2-72567 of Registrant and incorporated herein by reference].



(d)

Modification Agreement between Citibank, N.A. and Southern Associates Limited Partnership and a Title to Real Estate between Southern Associates Limited Partnership and Shelter Properties III to acquire Essex Park Apartments filed as Exhibit 4(d), respectively, to Form 10-K of Registrant for the year ended December 31, 1987 and incorporated herein by reference.



10(i)

Contracts related to acquisition/disposition of properties:



(b)

Purchase Agreement dated July 31, 1981, between Southern Associates Limited Partnership and U.S. Shelter Corporation to purchase Essex Park Apartments filed as Exhibit 12(b) to Amendment No. 1 of Registration Statement No. 2-72567 of Registrant filed September 2, 1981 and incorporated herein by reference.



(e)

Purchase Agreement dated May 14, 1982 between Lincoln Willowick Greenville Associates and U.S. Shelter Corporation to purchase Willowick Apartments.  [Filed with Current Report on Form 8-K of Registrant dated May 14, 1982 and incorporated herein by reference.]



(g)

Amendment to Purchase and Sale Contract between Shelter Properties III, a South Carolina Limited Partnership, and the affiliated Selling Partnerships and Northview Realty Group, Inc., a Canadian corporation, dated June 5, 2007. (Filed with Current Report on Form 8-K of Registrant dated June 13, 2007 and incorporated herein by reference).



(h)

Second Amendment to Purchase and Sale Contract between Shelter Properties III, a South Carolina Limited Partnership, and the affiliated Selling Partnerships and Northview Realty Group, Inc., a Canadian corporation, dated June 6, 2007. (Filed with Current Report on Form 8-K of Registrant dated June 13, 2007 and incorporated herein by reference).



(i)

Third Amendment to and Reinstatement of Purchase and Sale Contract between Shelter Properties III, a South Carolina Limited Partnership, and the affiliated Selling Partnerships and Northview Realty Group, Inc., a Canadian corporation, dated June 15, 2007. (Filed with Current Report on Form 8-K of Registrant dated June 13, 2007 and incorporated herein by reference).



10(iii)

Contracts related to refinancing of debt:



(m)

Multifamily Note dated December 15, 2000 between Shelter Properties III and Reilly Mortgage Group, Inc., a District of Columbia corporation securing Essex Park Apartments and Willowick Apartments (filed on Current Report on Form 8-K dated February 1, 2001 and incorporated herein by reference).



(n)

Multifamily Deed of Trust, Assignment of Rents, and Security Agreement dated December 15, 2000 between Shelter Properties III and Reilly Mortgage Group, Inc., a District of Columbia corporation, securing Essex Park Apartments and Willowick Apartments (filed on Current Report on Form 8-K dated February 1, 2001 and incorporated herein by reference).



31.1

Certification of equivalent of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.



31.2

Certification of equivalent of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.



32.1

Certification of the equivalent of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



99     (a)

Prospectus of Registrant dated September 2, 1981 [included in Registration Statement No. 2-72567, of Registrant] and incorporated herein by reference.