<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549


                                   FORM 10-Q

               Quarterly Report Pursuant to Section 13 or 15 (d)
                    of the Securities Exchange Act of 1934

               For the quarterly period ended September 30, 1999
                       Commission File Number 33-28493-A

                          CONDEV LAND FUND III, LTD.
                          --------------------------
            (Exact name of registrant as specified in its charter)

            FLORIDA                                 59-2943405
            -------                                 ----------
 (State or other jurisdiction of                 (I.R.S. Employer
  incorporation of organization)                 Identification No.)

                               2479 Aloma Avenue
                          Winter Park, Florida 32792
                   (Address of principal executive offices)

Registrant's telephone number, including area code: (407) 679-1748


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 report), and (2) has been subject to such filing
requirements for the past 90 days.  YES  X    NO ______.
                                        ---
<PAGE>

                          CONDEV LAND FUND III, LTD.

                                     INDEX

                                                                           PAGE
                                                                          NUMBER
PART I.   FINANCIAL INFORMATION:

          Statement of Assets, Liabilities and
          Partner's Capital - September 30, 1999
          and December 31, 1998                                                1

          Statement of Income & Expense -
          Three Months Ended September 30, 1999
          and September 30, 1998                                               2

          Statement of Income & Expense -
          Nine Months Ended September 30, 1999
          and September 30, 1998                                               3

          Statement of Cash Flows -
          Nine months ended September 30, 1999
          and September 30, 1998                                               4

          Notes to Financial Statements                                    5 - 6

          Management's Discussion and Analysis of
          Financial Condition and Results of Operations                    7 - 8

PART II.  OTHER INFORMATION:

          Item 1.   Legal Proceedings                                          8

          Item 6.   Exhibits and Reports on Form 8-K                           8

Signatures                                                                     9

Third Quarter 1999 Report to Limited Partners                                 10
<PAGE>

                         PART I. FINANCIAL INFORMATION



                          CONDEV LAND FUND III, LTD.
            STATEMENT OF ASSETS, LIABILITIES AND PARTNERS' CAPITAL
                   SEPTEMBER 30, 1999 AND DECEMBER 31, 1998


                                    ASSETS
                                    ------


                                        September 30, 1999   December 31, 1998
                                        -------------------  -----------------
                                            (Unaudited)              *

     Cash and Cash Equivalents                    $ 63,393          $   67,118
     Accounts Receivable                                 -                   -
     Investment in Joint Venture (2)                     -             533,596
     Land, at cost (3)                             455,846             405,625
     Organization Costs                              2,311               2,311
                                                  --------          ----------

     Total Assets:                                $521,550          $1,008,650
                                                  ========          ==========

                          LIABILITIES AND PARTNERS' CAPITAL
                          ---------------------------------


     Liabilities

     Accounts Payable                             $ 48,572          $        -
                                                  --------          ----------


     Partner's Capital:
        General Partner                          ($    874)        ($      996)
        Limited Partners                           473,852           1,009,646
                                                  --------          ----------
         Total Partners' Capital:                 $472,978          $1,008,650
                                                  --------          ----------

     Total Liabilities and Partners'
      Capital:                                    $521,550          $1,008,650
                                                  ========          ==========

* Condensed from audited financial statements.


   The accompanying notes are an integral part of these financial statements

                                       1
<PAGE>

                          CONDEV LAND FUND III, LTD.
                        STATEMENT OF INCOME AND EXPENSE
         THREE MONTHS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998
                                  (UNAUDITED)


                                   September 30, 1999  September 30, 1998
                                   ------------------  ------------------
     INCOME
     ------

Interest and Other Income                  $2,398           $     960

Equity in Income of Joint Venture               -                   -
                                           ------           ---------

Total Income                               $2,398           $     960
                                           ------           ---------


     OPERATING EXPENSES
     ------------------

Professional fees                               -                   -

Equity in loss of Joint Venture                 -                 225

Management fees                               936                 936

Other expense                                   -                 526

Office expense                                609                 982
                                           ------           ---------

     Total Operating Expenses:             $1,545           $   2,669
                                           ------           ---------

     Net Profit (Loss)                     $  853          ($   1,709)
                                           ======           =========

The accompanying notes are an integral part of these financial statements

                                       2
<PAGE>

                          CONDEV LAND FUND III, LTD.
                        STATEMENT OF INCOME AND EXPENSE
          NINE MONTHS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998
                                  (UNAUDITED)


<TABLE>
<CAPTION>
                                     September 30, 1999  September 30, 1998
                                     ------------------  ------------------
<S>                                  <C>                 <C>
          INCOME
          ------

Interest and Other Income                 $  3,675            $   4,618

Equity in Income of Joint Venture           20,993                    -
                                          --------            ---------

Total Income                              $ 24,668            $   4,618
                                          --------            ---------


          OPERATING EXPENSES
          ------------------

Professional fees                            7,000                7,100

Equity in loss of Joint Venture                  -                2,542

Management fees                              2,808                2,808

Other expense                                  250                  569

Office expense                               2,378                2,854
                                          --------            ---------

     Total Operating Expenses:            $ 12,346            $  15,873
                                          --------            ---------

     Net Profit (Loss)                    $ 12,232            ($ 11,255)
                                          ========            =========

</TABLE>

The accompanying notes are an integral part of these financial statements

                                       3
<PAGE>

                          CONDEV LAND FUND III, LTD.
                            STATEMENT OF CASH FLOWS
          NINE MONTHS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998

<TABLE>
<CAPTION>
                                         September 30, 1999  September 30, 1998
                                         ------------------  ------------------
<S>                                      <C>                 <C>
Cash Flows from Operating Activities:

     Net Income (Loss)                        $  12,232          ($  11,255)
     Adjustments to reconcile net income
     (loss) to net cash provided by (used
     in) operating activities:
          Equity in (income) loss of
            joint venture                    (   20,993)              2,542
          Cash provided by changes in:
               Accounts receivable                    -               2,494
               Accounts payable                  48,571          (      487)
                                              ---------           ---------

Net Cash Provided in Operating Activities:    $  39,810          ($   6,706)


Cash Flows from Investing Activities:

     Capitalized land related costs          ($  50,220)          $       -
     Investments in joint venture               554,589                   -
                                              ---------           ---------

Net Cash Used in Investing Activities:        $ 504,369           $       -
                                              ---------           ---------


Cash Flows from Financing Activities:
     Distributions to Partners               ($ 547,904)         ($       -)
                                              ---------           ---------

Net Cash Provided by Financing Activities:   ($ 547,904)         ($       -)
                                              ----------          ---------

Net increase (decrease) in Cash              ($   3,725)         ($   6,706)

Cash and cash equivalents, beginning of year     67,118              90,357
                                              ---------           ---------

Cash and cash equivalents, end of period      $  63,393           $  83,651
                                              =========           =========
</TABLE>

The accompanying notes are an integral part of these financial statements

                                       4
<PAGE>

                          CONDEV LAND FUND III, LTD.
                         NOTES TO FINANCIAL STATEMENTS
                                  (Unaudited)


Note 1     BASIS OF PRESENTATION.
           ---------------------

           The accompanying financial statements, in the opinion of Condev
           Associates, the general partner of Condev Land Fund III, Ltd.,
           reflect all adjustments (which include only normal recurring
           adjustments) necessary to a fair statement of the financial position,
           the results of operations and the changes in cash position for the
           periods presented.

Note 2    INVESTMENT IN JOINT VENTURE:
          ---------------------------

          Until the sale of Condev Osceola Joint Venture's last parcel of land,
          the partnership owned a 90% interest in Condev Osceola Joint Venture.
          On April 23, 1999, Condev Osceola Joint Venture concluded the sale of
          its 2.94 acre tract of land in the Kyng's Heath subdivision on SR 535
          and US Hwy 192 in Osceola County, Florida. The buyer was Sierra Land
          Company, and the purchase price was $700,000. After expenses of the
          sale, which included legal fees, closing costs and a 10% real estate
          commission paid to non-affiliated real estate brokers, the Joint
          Venture realized net proceeds of $617,039.74. The Joint Venture has
          distributed a total of $606,000 of the net proceeds to the Joint
          Venture partners, including $545,400 to Condev Land Fund III, Ltd. and
          $60,600 to Condev Osceola, Ltd. In turn, the Partnership distributed a
          total of $547,904, or $56 per unit to limited partners. Since this was
          the last parcel of land owned by Condev Osceola Joint Venture, the
          Joint Venture was terminated.

Note 3    INVESTMENT IN LAND:
          -------------------

          At September 30, 1999 and December 31, 1998, land consisted of a ten-
          acre parcel, zoned commercial in Lake County, Florida. As part of the
          Partnership's commitment to design and construct an entry road from US
          Hwy 27 to service the property, approximately 0.354 acres of land was
          used for construction of the spine road. This road was dedicated to
          Lake County on December 29, 1998, reducing the property size to 9.646
          acres. On March 8, 1999, the Partnership entered into a contract for
          sale of this parcel with the neighboring property owner. This
          transaction was closed on October 7, 1999. The sale price was $762,500
          plus interest from the originally scheduled closing date of July 15,
          1999 in the amount of $17,547.95, for a total of $780,047.95. After
          expenses of the sale, which included $76,250 in real estate
          commissions paid to non-affiliated real estate brokers, the net
          proceeds realized by the Partnership were $685,235.17. The Partnership
          paid $400,000 for this parcel in 1993.

Note 4    DISTRIBUTIONS TO PARTNERS:
          --------------------------

          Pursuant to the partnership agreement, cash flow generated each year
          by the Partnership is to be distributed 99% to the

                                       5
<PAGE>

               limited partners and 1% to the general partner. There were no
               cash flow distributions during the first nine months of 1999.

               Pursuant to the partnership agreement, proceeds realized from the
               sale of properties, after the establishment of reserves for
               future operating costs, are to be distributed at least annually.
               In April, a total of $547,904 was distributed to limited
               partners. See note 2. Investment in Joint Venture.
                                     ---------------------------

Note 5a        RELATED PARTY TRANSACTIONS:
               ---------------------------

               The Partnership Agreement provides for the reimbursement to the
               general partner of administrative expenses incurred in the direct
               operation of the partnership. For the nine months ended September
               30, 1999, a total of $3,443 was reimbursed to the general partner
               for direct expenses incurred.

               When properties are sold, an affiliate of the general partner may
               be paid real estate commissions in amounts customarily charged by
               others rendering similar services with such commissions plus
               commissions paid to nonaffiliated brokers not to exceed 10% of
               the gross sales price. No real estate commissions were paid to
               the general partner or any affiliate during the nine months ended
               September 30, 1999.

               The general partner is obligated to loan up to $100,000 to the
               Partnership during its term to meet working capital requirements.
               No such loans were made to the Partnership during the nine months
               ended September 30, 1999.

                                       6
<PAGE>

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

               During the nine months ended September 30, 1999, the Partnership
               continued to manage the portfolio properties with the objective
               of selling the properties at fair market prices. As discussed in
               Note 2 above, Condev Osceola Joint Venture was terminated after
               its only remaining property was sold and the net proceeds were
               distributed to limited partners. As discussed in Note 3 above,
               the Partnership was successful in working out a satisfactory
               solution for sale of its remaining property. The transaction was
               closed in October, 1999. See note 3. Investment in land. Since
                                                    ------------------
               this is the last property owned by the Partnership, all accounts
               are being reviewed by the Partnership's auditors. A final
               distribution totaling $677,248 was made in October, 1999, and the
               partnership is being terminated.

               Year 2000
               ---------

               The Partnership is heavily dependent upon a computer system to
               accurately maintain limited partner records, including name and
               address information, number of units owned, and distribution
               historical records. The Partnership is utilizing a system which
               was specially designed for the Partnership in 1990, and it is
               possible that the system will be affected by the date change
               which will occur at the end of 1999. The Partnership engaged a
               computer consultant to evaluate the potential problems, and make
               system changes if necessary so the operation of the Partnership
               will not be affected by the date change. Completion of revisions
               to the system is was completed in June, 1999. The cost of
               evaluating the current system and bringing it up to date to be
               year 2000 compliant was less than $1,000. The Partnership's
               computer records are backed up on a weekly basis, so all of the
               stored information is available from a secondary source. Even if
               the system were to be completely shut down by the date change at
               the end of 1999, the data necessary to continue operation of the
               Partnership is available and could readily be adapted to a new
               system which is year 2000 compliant, so no significant
               interruption in the operations of the Partnership is anticipated.

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

               Total revenues for the nine months ended September 30, 1999 were
               $24,668, compared with total revenues of $4,618 for the nine
               months ended September 30, 1998. The 1999 period included equity
               in the income of Joint Venture in the amount of $20,993. See
               Joint Venture below. Other income is generated from short-term
               -------------
               cash investments, and income can be expected to fluctuate,
               depending on the level of cash reserves in the Partnership and
               prevailing interest rates. Operating expenses for the nine months
               ended September 30, 1999 were $12,436, a essentially unchanged
               from $13,331 for the nine months ended September 30 31, 1998. In
               both periods, operating expenses represent the normal costs of

                                       7
<PAGE>

               operating the Partnership and managing the Partnership
               properties.

               Joint Venture. For the nine months ended September 30, 1999,
               -------------
               Condev Osceola Joint Venture had one sale of land in the amount
               of $700,000, and reported a net profit of $23,325. Having sold
               its only remaining land, the Joint Venture distributed all of its
               cash to the joint venture partners and was terminated.

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

               Total assets decreased from $1,008,650 at December 31, 1998 to
               $521,550 at September 30, 1999. This reflects the sale of
               property and liquidation of Condev Osceola Joint Venture and the
               net results of operations for the period. Assets can be expected
               to decline in the future as properties are sold and distributions
               are made to limited partners. As discussed in note 3. Investment
                                                                     ----------
               in Land, the last property owned by the partnership was sold in
               -------
               October, 1999. All liabilities have been paid and all available
               cash in the Partnership was distributed to limited partners in
               October.


                                    PART II

Item 1.  LEGAL PROCEEDINGS:
         -----------------

             As of September 30, 1999, there were no legal proceedings in
             process, nor to the knowledge of the general partner, threatened
             against the Partnership

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K:
         ---------------------------------

         (A) Exhibits

             Third Quarter 1999 Report to Limited Partners

         (B) Reports on Form 8-K

             There were no reports of Form 8-K for the period ended September
             30, 1999.

                                       8
<PAGE>

                          CONDEV LAND FUND III, LTD.
                                  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.


                              CONDEV LAND FUND III, LTD.
                              BY: Condev Associates, General Partner




October 26, 1999              /s/ Robert N. Gardner
------------------------      ---------------------------------
    DATE                      Robert N. Gardner, Partner



 October 26, 1999             /s/ Joseph J. Gardner
------------------------      ---------------------------------
    DATE                      Joseph J. Gardner, Partner

                                       9