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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

                  For the quarterly period ended March 31, 1999

                                       OR

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

                        For the transition period from     to

                         Commission file number 0-14466

          CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
             (Exact name of registrant as specified in its charter)

                 Connecticut                      06-1115374
          (State of Organization)    (I.R.S. Employer Identification No.)


                     900 Cottage Grove Road, South Building
                          Bloomfield, Connecticut 06002
                    (Address of principal executive offices)


                        Telephone Number: (860) 726-6000



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

                  Yes       X                No               


                                       1

<PAGE>



Part I - Financial Information

<TABLE>
          CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
                       (a Connecticut limited partnership)

                                 Balance Sheets
<CAPTION>
                                                                                         March 31,                 December 31,
                                                                                           1999                        1998
                                                               Assets                   (Unaudited)                  (Audited)
<S>                                                                                  <C>                          <C>
Property and improvements, at cost:
     Land and land improvements                                                      $    3,017,188               $    3,009,898
     Buildings                                                                           16,688,744                   16,661,970
     Furniture and fixtures                                                               1,468,506                    1,462,984
                                                                                     --------------               --------------
                                                                                         21,174,438                   21,134,852
     Less accumulated depreciation                                                        8,750,342                    8,693,273
                                                                                     --------------               --------------
              Net property and improvements                                              12,424,096                   12,441,579

Cash and cash equivalents                                                                   661,936                      739,751
Accounts receivable (net of allowance of $8,674
   in 1999 and $8,956 in 1998)                                                               31,772                        7,185
Escrow deposits                                                                             117,601                      143,422
Prepaid insurance                                                                            13,897                           --
Other asset                                                                                   1,000                        1,000
Deferred charges, net                                                                       773,839                      776,542
Escrowed debt service funds                                                                 553,328                      506,660
                                                                                     --------------               --------------
              Total                                                                  $   14,577,469               $   14,616,139
                                                                                     ==============               ==============

                   Liabilities and Partners' Capital (Deficit)

Liabilities:
     Notes and mortgages payable                                                     $   15,230,506               $   15,249,984
     Accounts payable and accrued expenses (including $29,872
       in 1999 and $18,906 in 1998 due to affiliates)                                       173,719                      241,892
     Tenant security deposits                                                                86,206                       82,092
     Unearned income                                                                         20,114                       26,611
                                                                                     --------------               --------------
              Total liabilities                                                          15,510,545                   15,600,579
                                                                                     --------------               --------------

Partners' capital (deficit):
     General Partner:
         Capital contributions                                                                1,000                        1,000
         Cumulative net income                                                               29,571                       27,513
         Cumulative cash distributions                                                      (35,295)                     (33,751)
                                                                                     --------------               --------------
                                                                                             (4,724)                      (5,238)
                                                                                     --------------               --------------
     Limited partners (24,856 Units)
         Capital contributions, net of offering costs                                    22,408,052                   22,408,052
         Cumulative net loss                                                            (14,747,042)                 (14,950,756)
         Cumulative cash distributions                                                   (8,589,362)                  (8,436,498)
                                                                                     --------------               --------------
                                                                                           (928,352)                    (979,202)
                                                                                     --------------               --------------
              Total partners' deficit                                                      (933,076)                    (984,440)
                                                                                     --------------               --------------
              Total                                                                  $   14,577,469               $   14,616,139
                                                                                     ==============               ==============



The Notes to Financial  Statements  are an integral  part of these statements.
</TABLE>

                                        2

<PAGE>

<TABLE>


          CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
                       (a Connecticut limited partnership)

                            Statements of Operations

               For the Three Months Ended March 31, 1999 and 1998
                                   (Unaudited)
<CAPTION>


                                                                                               1999                    1998
                                                                                               ----                    ----
<S>                                                                                       <C>                      <C>
Income:
     Rental income                                                                        $      817,960           $     775,774
     Other income                                                                                 21,989                  13,254
     Interest income                                                                              16,282                  16,262
                                                                                          --------------           -------------
                                                                                                 856,231                 805,290
                                                                                          --------------           -------------

Expenses:
     Property operating expenses                                                                 218,604                 218,281
     General and administrative                                                                  108,939                 108,632
     Fees and reimbursements to affiliates                                                        33,500                  26,129
     Interest expense                                                                            229,644                 233,149
     Depreciation and amortization                                                                59,772                 195,621
                                                                                          --------------           -------------
                                                                                                 650,459                 781,812
                                                                                          --------------           -------------

              Net income                                                                  $      205,772           $      23,478
                                                                                          ==============           =============

Net income:
     General Partner                                                                      $        2,058           $         235
     Limited partners                                                                            203,714                  23,243
                                                                                          --------------           -------------
                                                                                          $      205,772           $      23,478
                                                                                          ==============           =============

Net income per Unit                                                                       $         8.20           $        0.94
                                                                                          ==============           =============

Cash distribution per Unit                                                                $         6.15           $        5.70
                                                                                          ==============           =============
















  The Notes to Financial Statements are an integral part of these statements.
</TABLE>

                                        3

<PAGE>

<TABLE>


          CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
                       (a Connecticut limited partnership)

                            Statements of Cash Flows

               For the Three Months Ended March 31, 1999 and 1998
                                   (Unaudited)
<CAPTION>

                                                                                         1999                      1998
                                                                                         ----                      ----
<S>                                                                               <C>                      <C>
Cash flows from operating activities:
     Net income                                                                   $       205,772           $        23,478
     Adjustment to reconcile net income to net cash
       provided by operating activities:
         Depreciation and amortization                                                     59,772                   195,621
         Accounts receivable                                                              (24,587)                    3,339
         Accounts payable and accrued expenses                                            (68,173)                  (51,295)
         Escrow deposits                                                                   25,821                    62,312
         Other, net                                                                       (16,280)                   (6,317)
                                                                                  ---------------           ---------------
              Net cash provided by operating activities                                   182,325                   227,138
                                                                                  ---------------           ---------------

Cash flows from investing activities:
     Purchase of property and improvements                                                (39,586)                  (13,547)
                                                                                  ---------------           ---------------

Cash flows from financing activities:
     Repayment of notes and mortgage loans                                                (19,478)                  (52,986)
     Contribution to debt service escrow funds                                            (46,668)                       --
     Distribution to limited partners                                                    (152,864)                 (141,679)
     Distribution to General Partner                                                       (1,544)                   (1,431)
                                                                                  ---------------           ---------------
              Net cash used in financing activities                                      (220,554)                 (196,096)
                                                                                  ---------------           ---------------

Net increase (decrease) in cash and cash equivalents                                      (77,815)                   17,495
Cash and cash equivalents, beginning of year                                              739,751                   682,614
                                                                                  ---------------           ---------------
Cash and cash equivalents, end of period                                          $       661,936           $       700,109
                                                                                  ===============           ===============

Supplemental disclosure of cash information:
     Interest paid during period                                                  $       229,644           $       233,149
                                                                                  ===============           ===============













The Notes to Financial  Statements  are an integral part of these statements.
</TABLE>


                                        4

<PAGE>



          CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
                       (a Connecticut limited partnership)

                          Notes to Financial Statements
                                   (Unaudited)


     Readers of this quarterly report should refer to CONNECTICUT GENERAL REALTY
INVESTORS  III  LIMITED  PARTNERSHIP'S  (the  "Partnership")  audited  financial
statements  for the year  ended  December  31,  1998 which are  included  in the
Partnership's  1998 Annual Report,  as certain footnote  disclosures which would
substantially  duplicate  those contained in such audited  financial  statements
have been omitted from this report.

1.   Summary of Significant Accounting Policies

a)   Basis of  Presentation:  The  financial  statements  have been  prepared in
     conformity  with  generally  accepted  accounting  principles,  and reflect
     management's estimates and assumptions that affect the reported amounts. It
     is the  opinion  of  management  that the  financial  statements  presented
     reflect  all  the  adjustments  necessary  for a fair  presentation  of the
     financial condition and results of operations.  All such adjustments are of
     a normal recurring nature.

b)   Cash and Cash Equivalents:  Short term investments with a maturity of three
     months or less at the time of purchase are reported as cash equivalents.

2.   Deferred Charges

     Deferred charges consist of the following:
<TABLE>
<CAPTION>

                                                                                       March 31,               December 31,
                                                                                         1999                      1998
<S>                                                                               <C>                       <C>
     Surety fee - Waterford Apartments mortgage note                              $       963,910           $       963,910
     Costs of obtaining financing                                                         660,522                   660,522
                                                                                  ---------------           ---------------
                                                                                        1,624,432                 1,624,432
     Accumulated amortization                                                            (850,593)                 (847,890)
                                                                                  ---------------           ----------------
                                                                                  $       773,839           $       776,542
                                                                                  ===============           ===============
</TABLE>

3.   Transactions with Affiliates

     Fees and expenses  related to the General  Partner or its affiliates are as
follows:
<TABLE>
<CAPTION>

                                                                                  Three Months Ended          Unpaid at
                                                                                      March 31,               March 31,
                                                                                1999             1998           1999
                                                                                ----             ----           ----
<S>                                                                          <C>             <C>              <C>
     Property management fees (a)                                            $     5,137     $     4,857      $     3,423
     Partnership management fees                                                  19,517          13,036           19,517
     Reimbursement (at cost) for
      out-of-pocket expenses                                                       8,846           8,236            6,932
                                                                             -----------     -----------      -----------
                                                                             $    33,500     $    26,129      $    29,872
                                                                             ===========     ===========      ===========
</TABLE>



                                        5

<PAGE>



          CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
                       (a Connecticut limited partnership)

                    Notes to Financial Statements (Continued)
                                   (Unaudited)


(a)  Does not include  on-site  property  management  fees earned by independent
     property  management  companies of $36,190 and $34,369 for the three months
     ended March 31, 1999 and 1998,  respectively.  On-site property  management
     services  have been  contracted  by an affiliate of the General  Partner on
     behalf of the  Partnership  and are paid directly by the Partnership to the
     third party companies.

4.   Subsequent Event

     On April 14, 1999, the Partnership  completed the sale of its investment in
the Waterford  Apartments to Case Ventures,  Inc., an Oklahoma Corporation for a
gross sales price of  $14,675,000.  The purchaser  assumed the bond financing of
$11,355,000  as  part  of the  sale.  The  property  had a  depreciated  cost of
approximately  $9,550,000 as of the date of sale. After deducting closing costs,
the Partnership expects to record a gain of approximately $4,850,000.

     On May 17, 1999, the  Partnership  paid a distribution of $3,808,933 to the
limited partners and $1,973 to the General Partner.































                                        6

<PAGE>



          CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
                       (a Connecticut limited partnership)

                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations

     Except for historical information provided in this Management's  Discussion
and Analysis,  statements made in this document are  forward-looking and contain
information about financial  results,  economic  conditions,  trends,  and known
uncertainties.  The  Partnership  cautions the reader that actual  results could
differ materially from those expected by the Partnership.

Liquidity and Capital Resources

     At  March  31,  1999,  the  Partnership  had  $661,936  in  cash  and  cash
equivalents  which  was  available  for  working  capital   requirements,   cash
distributions,  and the Partnership's cash reserves. For the quarter ended March
31, 1999, the  Partnership  generated  $197,000 of adjusted cash from operations
after debt service,  capital improvements,  and adjustments to the Partnership's
cash reserves.  The  Partnership  will pay a cash  distribution of $3,808,933 or
$153.24 per Unit on May 17, 1999 representing the first quarter's  adjusted cash
from operations of $195,368 or $7.86 per Unit and the net proceeds from the sale
of Waterford Apartments of $145.38 per Unit. The Partnership plans to distribute
cash  quarterly  to the extent  cash is  available  from  operations  after debt
service,  capital,  and changes to cash  reserves  for  liabilities  and capital
expenditures, until the sale of the Partnership's remaining property.

     On April 14, 1999, the Partnership  completed the sale of its investment in
the Waterford  Apartments to Case Ventures,  Inc., an Oklahoma Corporation for a
gross sales price of  $14,675,000.  The purchaser  assumed the bond financing of
$11,355,000 as part of the sale. After deducting  closing costs, the Partnership
netted approximately  $3,614,000.  On May 17, 1999, the Partnership is scheduled
to  distribute  the  net  proceeds  from  the  sale  to  limited  partners.  The
Partnership  expects to record a gain for both book and tax  purposes.  With the
sale of Waterford completed, the Partnership will commence the sales process for
Versailles Village. The property will likely be sold on a leveraged basis. Based
on the anticipated  sale of Versailles  Village by the end of the third quarter,
the Partnership plans to liquidate and terminate by the end of the year.

Results of Operations

     Rental income  increased 7% at Waterford  and 4% at Versailles  Village for
the three months ended March 31, 1999, as compared with the same period in 1998,
due to an increase in rates.  Versailles  Village  plans to continue to increase
rental rates in the second quarter.  Other income increased due to the write off
of a disputed payable relating to maintenance work at Stonebridge Manor in 1997.

     Fees and  reimbursements  to affiliates  increased  primarily due to higher
partnership  management fees as a result of more cash available for distribution
for the three months ended March 31, 1999 than in the same period in 1998.  More
cash was  available  to  distribute  in 1999 due to improved  operations,  fewer
reserves  required and less debt service  (Waterford  Taxable Series 1993B Bonds
fully amortized by December 1998).  There was no depreciation  and  amortization
expense for  Waterford  in 1999 as the property was held for sale as of November
1998.










                                        7

<PAGE>


          CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
                       (a Connecticut limited partnership)

                Management's Discussion and Analysis of Financial
                 Condition and Results of Operations (Continued)


                                    Occupancy

     The  following is a listing of  approximate  physical  occupancy  levels by
quarter for the Partnership's investment properties:
<TABLE>
<CAPTION>

                                                                1998                                      1999
                                           -----------------------------------------------               -------
                                            At 3/31      At 6/30      At 9/30     At 12/31               At 3/31
                                            -------      -------      -------     --------               -------
<S>                                           <C>         <C>           <C>          <C>                   <C>
1.   Versailles Village Apartments
     Forest Park, Ohio                        97%         100%          94%          94%                   99%

2.   Waterford Apartments
     Tulsa, Oklahoma                          94%          97%          94%          95%                   90%

</TABLE>


Part II- Other Information

     Item 6.  Exhibits and Reports on Form 8-K

     (a) Exhibits:

         27 Financial Data Schedules.

     (b) No Form 8-Ks were filed during the three months ended March 31, 1999.


                                                                 8

<PAGE>



                                   SIGNATURES



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                    CONNECTICUT GENERAL REALTY INVESTORS III
                    LIMITED PARTNERSHIP


                        By:      CIGNA Realty Resources, Inc. - Fifth,
                                 General Partner




Date: May 12, 1999      By:      /s/ John D. Carey                           
      ------------               ----------------------------
                                 John D. Carey, President
                                 (Principal Executive Officer)



Date: May 12, 1999      By:      /s/ Josephine C. Donofrio                   
      ------------               -----------------------------
                                 Josephine C. Donofrio, Controller
                                 (Principal Accounting Officer)


                                        9

<PAGE>