--------------------------------------------------------------------------------


--------------------------------------------------------------------------------



                                  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 June 30, 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>
                                                                                         June 30,                  December 31,
                                                                                           1999                        1998
                                                               Assets                   (Unaudited)                  (Audited)
<S>                                                                                  <C>                          <C>
Property and improvements, at cost:
     Land and land improvements                                                      $      784,121               $    3,009,898
     Buildings                                                                            5,208,937                   16,661,970
     Furniture and fixtures                                                                 895,101                    1,462,984
                                                                                     --------------               --------------
                                                                                          6,888,159                   21,134,852
     Less accumulated depreciation                                                        3,297,173                    8,693,273
                                                                                     --------------               --------------
              Net property and improvements                                               3,590,986                   12,441,579

Cash and cash equivalents                                                                   442,545                      739,751
Accounts receivable (net of allowance of $9,052
   in 1999 and $8,956 in 1998)                                                               10,414                        7,185
Escrow deposits                                                                               7,144                      143,422
Prepaid insurance                                                                             2,774                           --
Other asset                                                                                   8,348                        1,000
Deferred charges, net                                                                        18,499                     776,542
Escrowed debt service funds                                                                      --                      506,660
                                                                                     --------------               --------------
              Total                                                                  $    4,080,710               $   14,616,139
                                                                                     ==============               ==============

                        Liabilities and Partners' Capital (Deficit)

Liabilities:
     Notes and mortgages payable                                                     $    3,855,635               $   15,249,984
     Accounts payable and accrued expenses (including $19,004
       in 1999 and $18,906 in 1998 due to affiliates)                                        95,122                      241,892
     Tenant security deposits                                                                42,529                       82,092
     Unearned income                                                                          4,285                       26,611
                                                                                     --------------               --------------
              Total liabilities                                                           3,997,571                   15,600,579
                                                                                     --------------               --------------

Partners' capital (deficit):
     General Partner:
         Capital contributions                                                                1,000                        1,000
         Cumulative net income                                                               34,142                       27,513
         Cumulative cash distributions                                                      (37,268)                     (33,751)
                                                                                     --------------               --------------
                                                                                             (2,126)                      (5,238)
                                                                                     --------------               --------------
     Limited partners (24,856 Units)
         Capital contributions, net of offering costs                                    22,408,052                   22,408,052
         Cumulative net loss                                                             (9,924,492)                 (14,950,756)
         Cumulative cash distributions                                                  (12,398,295)                  (8,436,498)
                                                                                     --------------               --------------
                                                                                             85,265                     (979,202)
                                                                                     ---------------              --------------
              Total partners' capital (deficit)                                              83,139                     (984,440)
                                                                                     ---------------              --------------
              Total                                                                  $    4,080,710               $   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
                                   (Unaudited)
<CAPTION>

                                                                           Three Months Ended                 Six Months Ended
                                                                                June 30,                          June 30,
                                                                                --------                          --------
                                                                        1999               1998            1999             1998
                                                                        ----               ----            ----             ----
<S>                                                               <C>               <C>              <C>              <C>
Income:
     Rental income                                                $      385,589    $     818,434    $    1,203,549   $   1,594,208
     Other income                                                         10,144           17,153            32,133          30,407
     Interest income                                                      21,851           19,474            38,133          35,736
                                                                  --------------    -------------    --------------   -------------
                                                                         417,584          855,061         1,273,815       1,660,351
                                                                  --------------    -------------    --------------   -------------

Expenses:
     Property operating expenses                                         143,386          237,110           361,990         455,391
     General and administrative                                          117,840          133,888           226,779         242,520
     Fees and reimbursements to affiliates                                12,678           29,385            46,178          55,514
     Interest expense                                                     99,315          232,451           328,959         465,600
     Depreciation and amortization                                        59,674          196,344           119,446         391,965
                                                                  --------------    -------------    --------------   -------------
                                                                         432,893          829,178         1,083,352       1,610,990
                                                                  --------------    -------------    --------------   -------------

         Income (loss) operations                                        (15,309)          25,883           190,463          49,361

     Gain on sale of property                                          4,842,430               --         4,842,430              --
                                                                 ---------------    -------------    --------------   -------------

         Net income                                               $    4,827,121    $      25,883    $    5,032,893   $      49,361
                                                                  ==============    =============    ==============   =============

Net income:
     General Partner                                              $        4,571    $         259    $        6,629   $         494
     Limited partners                                                  4,822,550           25,624         5,026,264          48,867
                                                                  --------------    -------------    --------------   -------------
                                                                  $    4,827,121    $      25,883    $    5,032,893   $      49,361
                                                                  ==============    =============    ==============   =============

Net income per Unit                                               $       194.02    $        1.03    $       202.22   $        1.97
                                                                  ==============    =============    ==============   =============

Cash distribution per Unit                                        $       153.24    $        5.25    $       159.39   $       10.95
                                                                  ==============    =============    ==============   =============













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 Six Months Ended June 30, 1999 and 1998
                                   (Unaudited)
<CAPTION>

                                                                                         1999                      1998
                                                                                         ----                      ----

<S>                                                                               <C>                       <C>
Cash flows from operating activities:
     Net income                                                                   $     5,032,893           $        49,361
     Adjustment to reconcile net income to net cash
       provided by operating activities:
         Gain on sale of property                                                      (4,842,430)                       --
         Depreciation and amortization                                                    119,446                   391,965
         Accounts receivable                                                               (3,229)                    4,564
         Accounts payable and accrued expenses                                           (146,770)                  (76,305)
         Escrow deposits                                                                  136,278                    66,074
         Other, net                                                                       (72,011)                       50
                                                                                  ---------------           ---------------
              Net cash provided by operating activities                                   224,177                   435,709
                                                                                  ---------------           ---------------

Cash flows from investing activities:
     Proceeds from sale of property                                                    14,675,000                        --
     Payment of closing costs related to sale of property                                (286,215)                       --
     Purchase of property and improvements                                                (57,165)                  (70,793)
                                                                                  ---------------           ---------------
              Net cash provided by (used in) investing activities                      14,331,620                   (70,793)
                                                                                  ---------------           ---------------

Cash flows from financing activities:
     Proceeds from escrowed debt service funds                                            506,660                        --
     Distribution to limited partners                                                  (3,961,797)                 (272,173)
     Distribution to General Partner                                                       (3,517)                   (2,749)
     Repayment of notes and mortgage loans                                            (11,394,349)                 (106,333)
                                                                                  ---------------           ---------------
              Net cash used in financing activities                                   (14,853,003)                 (381,255)
                                                                                  ---------------           ---------------

Net decrease in cash and cash equivalents                                                (297,206)                  (16,339)
Cash and cash equivalents, beginning of year                                              739,751                   682,614
                                                                                  ---------------           ---------------
Cash and cash equivalents, end of period                                          $       442,545           $       666,275
                                                                                  ===============           ===============

Supplemental disclosure of cash information:
     Interest paid during period                                                  $       328,959           $       465,600
                                                                                  ===============           ===============









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
<TABLE>
     Deferred charges consist of the following:

<CAPTION>

                                                                                       June 30,                December 31,
                                                                                         1999                      1998

<S>                                                                               <C>                       <C>
     Surety fee - Waterford Apartments mortgage note                              $            --           $       963,910
     Costs of obtaining financing                                                         143,660                   660,522
                                                                                  ---------------           ---------------
                                                                                          143,660                 1,624,432
     Accumulated amortization                                                            (125,161)                 (847,890)
                                                                                  ---------------           ---------------
                                                                                  $        18,499           $       776,542
                                                                                  ===============           ===============
</TABLE>

3.   Transactions with Affiliates
<TABLE>
     Fees and expenses  related to the General  Partner or its affiliates are as
follows:

<CAPTION>

                                                   Three Months Ended             Six Months Ended              Unpaid at
                                                        June 30,                      June 30,                   June 30,
                                                        --------                      --------                   --------
                                                 1999              1998         1999             1998              1999
                                                 ----              ----         ----             ----              ----

<S>                                        <C>              <C>              <C>             <C>              <C>
     Property management fees (a)          $        595     $       5,172    $     5,732     $    10,029      $        --
     Partnership management fees                     --            12,515         19,517          25,551               --
     Reimbursement (at cost) for
      out-of-pocket expenses                     12,083            11,698         20,929          19,934           19,004
                                           ------------     -------------    -----------     -----------      -----------
                                           $     12,678     $      29,385    $    46,178     $    55,514      $    19,004
                                           ============     =============    ===========     ===========      ===========

</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 $16,000 and $36,334 for the three months
     ended June 30, 1999 and 1998, respectively, and $52,190 and $70,703 for the
     six months  ended June 30, 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.   Sale of 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.  The  property  had a  depreciated  cost of
$9,546,354 as of the date of sale. After deducting closing costs, the
Partnership recorded a gain of $4,842,430.


5.   Subsequent Event

     On August 13, 1999, the Partnership  paid a distribution of $125,274 to the
limited partners.


























                                        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 June 30, 1999, the Partnership had $442,545 in cash and cash equivalents
which was available for working capital  requirements,  cash distributions,  and
the  Partnership's  cash  reserves.  For the three and six months ended June 30,
1999, the Partnership  generated $199,000 of adjusted cash from operations after
debt service,  capital  improvements,  and adjustments to the Partnership's cash
reserves.  The  Partnership's  first quarter 1999  distribution of $3,808,933 or
$153.24 per Unit was paid on May 17, 1999 and  represented  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's
second quarter 1999 cash  distribution of $125,274 or $5.04 per Unit was paid on
August 13, 1999 and represented the  Partnership's  second quarter adjusted cash
from operations including an adjustment to cash reserves.  The Partnership plans
to distribute  cash  quarterly to the extent cash is available  from  operations
after debt service,  capital improvements,  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 return of the debt  escrows,  including
accrued  interest,   and  deducting   closing  costs,  the  Partnership   netted
approximately  $3,614,000.  On May 17, 1999, the Partnership distributed the net
proceeds  from the  sale to  limited  partners.  A gain  was  recorded  for book
purposes  of  $4,842,430.  The  Partnership  expects  to  record  a gain for tax
purposes. The Partnership has commenced the marketing phase of the sales process
for Versailles Village, the Partnership's sole remaining property.  Based on the
anticipated  sale of Versailles  Village by the fourth quarter,  the Partnership
plans to liquidate and terminate by the end of the year.


Results of Operations

     Generally, decreases in the income statement accounts for 1999, as compared
with 1998, are the result of the sale of Waterford Apartments in April 1999. The
Partnership's  sole  remaining  property,   Versailles  Village,   had  improved
operations  for both the three and six months ended June 30,  1999,  as compared
with the same periods in 1998.

     At Versailles Village,  rental income increased $3,166 for the three months
and $13,609 for the six months  ended June 30, 1999,  as compared  with the same
periods  in 1998,  due to an  increase  in rates.  Property  operating  expenses
decreased  $1,585 for the three  months and $5,911 for the six months ended June
30, 1999.  Savings in utility costs,  insurance and maintenance more than offset
an increase in property taxes caused by a school levy. There were no significant
fluctuations in other income,  general and administrative,  interest expense and
depreciation  and  amortization  for  Versailles  Village  for the three and six
months ended June 30, 1999, as compared with the same periods in 1998.

     Partnership  other income  increased  overall for the six months ended June
30, 1999 due to the write off of a disputed payable relating to maintenance work
at Stonebridge Manor in 1997. Fees and  reimbursements  to affiliates  decreased
for the three and six  months  ended June  30,1999,  as  compared  with the same
periods in 1998, primarily due to lower

                                        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)


partnership  management fees as a result of less cash available for distribution
resulting  from the sale of  Waterford  Apartments  in April 1999.  There was no
depreciation and amortization  expense for Waterford in 1999 as the property was
held for sale as of November 1998.





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

<CAPTION>

                                                                1998                                             1999
                                          -------------------------------------------------          ------------------------------

                                            At 3/31      At 6/30      At 9/30     At 12/31               At 3/31             At 6/30
                                            -------      -------      -------     --------               -------             -------
<S>                                           <C>         <C>           <C>          <C>                   <C>                 <C>
1.   Versailles Village Apartments
     Forest Park, Ohio                        97%         100%          94%          94%                   99%                 96%

2.   Waterford Apartments
     Tulsa, Oklahoma                          94%          97%          94%          95%                   90%                 N/A
</TABLE>

An N/A indicates  that the property was not owned by the  partnership at the end
of the quarter.

     (a) Waterford Apartments was sold April 14, 1999.

Part II- Other Information

     Item 6.  Exhibits and Reports on Form 8-K

     (a) Exhibits:

         27 Financial Data Schedules.

     (b) Reports on Form 8-K:

         Registrant  reported the sale of the  Waterford  Apartments on Form 8-K
dated April 27, 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: August 16, 1999         By:      /s/ John D. Carey
      ----------------                 ------------------------
                                        John D. Carey, President
                                        (Principal Executive Officer)



Date: August 16, 1999         By:      /s/ Josephine C. Donofrio
      ---------------                  -------------------------------
                                        Josephine C. Donofrio, Controller
                                        (Principal Accounting Officer)


                                        9

<PAGE>