FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                     U.S. Securities and Exchange Commission

                             Washington, D.C. 20549

                                   Form 10-QSB

(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, 2000


[ ] 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 0-14187

                  CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3
         (Exact name of small business issuer as specified in its charter)



              California                                        94-2940208
    (State or other jurisdiction of                          (I.R.S. Employer
     incorporation or organization)                         Identification No.)

                          55 Beattie Place, PO Box 1089

                        Greenville, South Carolina 29602

                      (Address of principal executive offices)

                                 (864) 239-1000

                         (Registrant'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  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___

<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS

a)

                  CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

                                  BALANCE SHEET

                                   (Unaudited)

                          (in thousands, except unit data)

                                  June 30, 2000
<TABLE>
<CAPTION>

Assets

<S>                                                                       <C>
   Cash and cash equivalents                                              $ 3,696
   Receivables and deposits                                                   905
   Restricted escrows                                                         641
   Other assets                                                               571
   Investment properties:
      Land                                               $  8,641
      Buildings and related personal property              45,369
                                                           54,010

      Less accumulated depreciation                       (18,648)         35,362
                                                                         $ 41,175

Liabilities and Partners' (Deficit) Capital

Liabilities

   Accounts payable                                                        $  215
   Due to general partner                                                     125
   Tenant security deposit liabilities                                        315
   Accrued property taxes                                                     283
   Other liabilities                                                          422
   Mortgage notes payable                                                  27,925

Partners' (Deficit) Capital

   General partner                                        $  (721)
   Limited partners (383,033 units outstanding)            12,611          11,890
                                                                         $ 41,175
</TABLE>

                   See Accompanying Notes to Financial Statements

<PAGE>

b)

                  CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

                            STATEMENTS OF OPERATIONS

                                   (Unaudited)

                          (in thousands, except unit data)

<TABLE>
<CAPTION>

                                           For the Three Months      For the Six Months
                                              Ended June 30,           Ended June 30,
                                            2000         1999         2000        1999
Revenues:                                             (Restated)               (Restated)
<S>                                       <C>          <C>          <C>          <C>
  Rental income                           $ 3,174      $ 2,981      $ 6,315      $ 5,946
  Other income                                340          212          549          454
      Total revenues                        3,514        3,193        6,864        6,400

Expenses:
  Operating                                 1,019        1,085        2,244        2,329
  General and administrative                  166          178          319          323
  Depreciation                                723          650        1,439        1,276
  Interest                                    524          524        1,047        1,048
  Property taxes                              186          179          365          336
      Total expenses                        2,618        2,616        5,414        5,312

Income from continuing operations             896          577        1,450        1,088

Income from discontinued operations            --           48           --          165
Gain on sale of discontinued
  operations                                   --        2,300           --        2,300

Net income                                 $  896      $ 2,925      $ 1,450      $ 3,553

Net income allocated to general
  partner (1%)                             $    9      $    29      $    15      $    36
Net income allocated to limited
  partners (99%)                              887        2,896        1,435        3,517

                                           $ 896       $ 2,925      $ 1,450      $ 3,553
Per limited partnership unit:

  Income from continuing operations        $ 2.27       $ 1.49       $ 3.73      $  2.81
  Income from discontinued operations        0.05         0.13         0.02         0.43
  Gain on sale of discontinued
   operations                                  --         5.94           --         5.94

Net income                                 $ 2.32       $ 7.56       $ 3.75      $  9.18

Distributions per limited
  partnership unit                         $ 6.01        $  --       $ 9.88      $ 25.59

</TABLE>

                   See Accompanying Notes to Financial Statements

<PAGE>

c)

                  CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

                STATEMENTS OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
                                   (Unaudited)

                          (in thousands, except unit data)


<TABLE>
<CAPTION>

                                     Limited
                                    Partnership     General     Limited
                                       Units        Partner     Partners      Total

<S>                                   <C>           <C>         <C>          <C>
Original capital contributions        383,033       $    1      $95,758      $95,759

Partners' (deficit) capital
   at December 31, 1999               383,033       $ (698)     $14,960      $14,262

Distributions to partners                  --          (38)      (3,784)      (3,822)

Net income for the six months
   ended June 30, 2000                     --           15        1,435        1,450

Partners' (deficit) capital at
   June 30, 2000                      383,033       $ (721)     $12,611      $11,890
</TABLE>

                   See Accompanying Notes to Financial Statements

<PAGE>

d)

                  CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

                            STATEMENTS OF CASH FLOWS

                                   (Unaudited)

                                   (in thousands)

<TABLE>
<CAPTION>

                                                                   Six Months Ended
                                                                        June 30,
                                                                   2000        1999
Cash flows from operating activities:
<S>                                                               <C>         <C>
  Net income                                                      $ 1,450     $ 3,553
  Adjustments to reconcile net income to net cash
   provided by operating activities:
      Depreciation                                                  1,439       1,429
      Amortization of lease commissions and loan costs                 44          68
      Gain on sale of investment property                              --      (2,300)
      Change in accounts:
        Receivables and deposits                                     (352)        129
        Other assets                                                  (28)         15
        Accounts payable                                              (98)         95
        Due to affiliate                                               --        (256)
        Tenant security deposit liabilities                            34        (109)
        Accrued property taxes                                         96          33
        Other liabilities                                             (28)         27

         Net cash provided by operating activities                  2,557       2,684

Cash flows from investing activities:

  Property improvements and replacements                             (717)       (902)
  Net receipts from restricted escrows                                227          38
  Proceeds from sale of investment property                            --       6,573

         Net cash (used in) provided by investing activities         (490)      5,709

Cash flows used in financing activities:

  Distributions to partners                                        (3,822)     (9,900)

Net decrease in cash and cash equivalents                          (1,755)     (1,507)

Cash and cash equivalents at beginning of period                    5,451      14,189

Cash and cash equivalents at end of period                        $ 3,696     $12,682

Supplemental disclosure of cash flow information:
  Cash paid for interest                                          $ 1,003     $ 1,003

</TABLE>

At  December  31,  1999  and  June  30,  2000,  accounts  payable  and  property
improvements and replacements were adjusted by approximately $91,000.

                   See Accompanying Notes to Financial Statements

<PAGE>

e)

                  CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

                          NOTES TO FINANCIAL STATEMENTS

                                   (Unaudited)

Note A - Basis of Presentation

The  accompanying   unaudited  financial   statements  of  Consolidated  Capital
Institutional   Properties/3  (the  "Partnership"  or  "Registrant")  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 ConCap  Equities,  Inc.  (the "General
Partner"),  all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included.  Operating results for the
three and six month periods ended June 30, 2000, are not necessarily  indicative
of the results  that may be expected  for the fiscal  year ending  December  31,
2000. For further  information,  refer to the financial statements and footnotes
thereto included in the Partnership's  Annual Report on Form 10-K for the fiscal
year ended December 31, 1999.

Certain  reclassifications  have been made to the 1999 information to conform to
the 2000 presentation.

Note B - Transfer of Control

Pursuant  to a series  of  transactions  which  closed  on  October  1, 1998 and
February 26, 1999,  Insignia Financial Group, Inc. and Insignia Properties Trust
merged into Apartment  Investment and Management Company  ("AIMCO"),  a publicly
traded real estate investment trust, with AIMCO being the surviving  corporation
(the "Insignia Merger").  As a result, AIMCO acquired 100% ownership interest in
the General Partner.  The General Partner does not believe that this transaction
has had or will have a material  effect on the  affairs  and  operations  of the
Partnership.

Note C - Related Party Transactions

The  Partnership has no employees and is dependent on the General Partner and/or
its  affiliates  for  the  management  and  administration  of  all  Partnership
activities. The limited partnership agreement ("Partnership Agreement") provides
for  payments  to  affiliates  for  property  management  services  based  on  a
percentage of revenue. The Partnership Agreement also provides for reimbursement
to the General  Partner and its affiliates for costs incurred in connection with
the administration of Partnership activities.

The following amounts were paid or accrued to the General Partner and affiliates
during each of the six month periods ended June 30, 2000 and 1999:

                                                                  2000      1999
                                                                  (in thousands)

 Property management fees (included in operating expenses)        $335      $315
 Reimbursements for services of affiliates (included in
   investment properties, general and administrative
   expenses, and operating expenses)                               171       166
 Real estate brokerage commissions (included in gain on
   sale of investment property)                                     --       209

<PAGE>

During the six months  ended June 30, 2000 and 1999,  affiliates  of the General
Partner were entitled to receive 5% of gross receipts from all the Partnership's
residential   properties  as  compensation  for  providing  property  management
services.  The Partnership  paid to such affiliates  approximately  $335,000 and
$315,000  for  management  fees for the six months ended June 30, 2000 and 1999,
respectively.

An  affiliate  of the General  Partner  received  reimbursement  of  accountable
administrative expenses amounting to approximately $171,000 and $166,000 for the
six month periods ended June 30, 2000 and 1999, respectively.

For  acting as real  estate  broker in  connection  with the sale of South  City
Business  Center,  the  General  Partner was paid a real  estate  commission  of
approximately  $209,000  during the year ended  December 31, 1999. For acting as
real estate  broker in connection  with the sale of Corporate  Center in October
1999,  the General  Partner  earned a real estate  commission  of  approximately
$125,000.   This  amount  is  included  in  "Due  to  General  Partner"  on  the
accompanying  balance sheet. For acting as real estate broker in connection with
the sale of City Heights in November  1998,  the General  Partner  earned a real
estate  commission of  approximately  $465,000.  The  commission  was accrued at
December 31, 1998, and was paid during the first quarter of 1999.

AIMCO and its affiliates  currently own 178,282.4  limited  partnership units in
the Partnership  representing 46.55% of the outstanding units. A number of these
units were acquired  pursuant to tender offers made by AIMCO or its  affiliates.
It is possible  that AIMCO or its  affiliates  will make one or more  additional
offers to acquire  additional limited  partnership  interests in the Partnership
for cash or in exchange for units in the operating partnership of AIMCO. In this
regard,  on July 24, 2000,  an  affiliate  of AIMCO  commenced a tender offer to
purchase any and all of the remaining partnership interests for a purchase price
of $106.00. Under the Partnership  Agreement,  unitholders holding a majority of
the Units are entitled to take action with respect to a variety of matters. As a
result  of its  ownership  of  46.55% of the  outstanding  units,  AIMCO is in a
position to  significantly  influence all voting  decisions  with respect to the
Registrant. When voting on matters, AIMCO would in all likelihood vote the Units
it acquired in a manner favorable to the interest of the General Partner because
of their affiliation with the General Partner.

Note D - Commitment

The  Partnership is required by the  Partnership  Agreement to maintain  working
capital reserves for  contingencies of not less than 5% of Net Invested Capital,
as defined in the Partnership Agreement. In the event expenditures are made from
this reserve, operating revenue shall be allocated to such reserve to the extent
necessary  to  maintain  the  foregoing  level.  Reserves,  including  cash  and
securities available for sale, totaling approximately $4.2 million, were greater
than the reserve requirement of approximately $2.6 million at June 30, 2000.

Note E - Distributions

The  Partnership  paid  distributions  of  cash  generated  from  operations  of
approximately  $3,822,000  (approximately  $3,784,000 to the limited partners or
$9.88 per limited  partnership unit) for the six months ended June 30, 2000. The
Partnership   distributed   cash  generated  from  operations  of  approximately
$4,113,000  (approximately  $4,072,000  to the  limited  partners  or $10.63 per
limited partnership unit) and approximately $5,787,000 (approximately $5,729,000
to the  limited  partners  or  $14.96  per  limited  partnership  unit) of sales
proceeds from City Heights for the six months ended June 30, 1999.

<PAGE>

Note F - Discontinued Operations

In June 1999,  South City Business Center,  located in Chula Vista,  California,
was sold to an  unaffiliated  party for  $6,962,000.  After  payment  of closing
expenses,  the net sales proceeds received by the Partnership were approximately
$6,573,000.  For financial  statement  purposes,  the sale resulted in a gain of
approximately $2,300,000.

South City Business  Center and Corporate  Center which was sold in October 1999
to an  unaffiliated  third  party  were the last  commercial  properties  in the
commercial segment of the Partnership. Due to the sale of the properties in June
1999 and October 1999,  respectively,  the income of both of the  properties has
been classified as "Income from  discontinued  operations" for the three and six
month  periods  ended  June  30,  1999.   Revenues  of  these   properties  were
approximately  $785,000 for the six months ended June 30, 1999 and approximately
$344,000 for the three months ended June 30,  1999.  Income from  operations  of
these  properties was  approximately  $165,000 for the six months ended June 30,
1999 and  approximately  $48,000  for the  three  months  ended  June 30,  1999,
respectively.

Note G - Segment Reporting

Description  of the types of products  and  services  from which the  reportable
segment  derives its revenues:  The  Partnership  had two  reportable  segments:
residential properties and commercial properties.  The Partnership's residential
property  segment  consists of seven  apartment  complexes one each in Colorado,
Florida,  Michigan,  North  Carolina,  and  Utah  and  two  in  Washington.  The
Partnership rents apartment units to tenants for terms that are typically twelve
months or less. The commercial property segment consisted of two business parks,
one located in Florida and one in California. These properties leased space to a
variety of  businesses  at terms  ranging  from month to month to ten years.  On
October 4, 1999, the final commercial  property held by the Partnership was sold
to an  unrelated  party.  Therefore,  the  commerical  segment is  reflected  as
discontinued operations.

Measurement  of segment profit or loss: The  Partnership  evaluates  performance
based on segment profit (loss) before  depreciation.  The accounting policies of
the  reportable  segments are the same as those  described in the  Partnership's
Annual Report on Form 10-K for the fiscal year ended December 31, 1999.

Factors management used to identify the enterprise's  reportable  segments:  The
Partnership's reportable segments are investment properties that offer different
products and  services.  The  reportable  segments  are each managed  separately
because they provide  distinct  services  with  different  types of products and
customers.

<PAGE>

Segment  information for the three and six month periods ended June 30, 2000 and
1999 is shown in the tables  below.  The  "Other"  column  includes  Partnership
administration  related  items and  income  and  expense  not  allocated  to the
reportable segments (in thousands).

        Six months ended
         June 30, 2000           Residential      Other       Totals

Rental income                      $ 6,315        $   --     $ 6,315
Other income                           510            39         549
Interest expense                     1,047            --       1,047
Depreciation                         1,439            --       1,439
General and administrative
  expenses                              --           319         319
Segment profit (loss)                1,730          (280)      1,450
Total assets                        25,198        15,977      41,175
Capital expenditures for
  investment properties                626            --         626


       Three months ended
         June 30, 2000           Residential      Other       Totals

Rental income                      $ 3,174        $   --      $ 3,174
Other income                           319            21         340
Interest expense                       524            --         524
Depreciation                           723            --         723
General and administrative
  expenses                              --           166         166
Segment profit (loss)                1,041          (145)        896

<PAGE>

<TABLE>
<CAPTION>

        Six months ended
         June 30, 1999            Residential    Commercial        Other      Totals
                                               (discontinued)
<S>                                 <C>             <C>             <C>     <C>
Rental income                       $ 5,946         $   --          $ --    $ 5,946
Other income                            331             --           123        454
Interest expense                      1,048             --            --      1,048
Depreciation                          1,276             --            --      1,276
General and administrative
  expenses                               --             --           323        323
Gain on sale of discontinued
  operations                             --          2,300            --      2,300
Income from discontinued
  operations                             --            165            --        165
Segment profit (loss)                 1,288          2,465          (200)     3,553
Total assets                         27,952          2,442        23,828     54,222
Capital expenditures for
  investment properties                 826             76            --        902
</TABLE>

<TABLE>
<CAPTION>

       Three months ended
         June 30, 1999            Residential    Commercial        Other      Totals
                                               (discontinued)
<S>                                 <C>             <C>             <C>     <C>
Rental income                       $ 2,981         $   --          $ --    $ 2,981
Other income                            173             --            39        212
Interest expense                        524             --            --        524
Depreciation                            650             --            --        650
General and administrative
  expenses                               --             --           178        178
Gain on sale of discontinued
  operations                             --          2,300            --      2,300
Income from discontinued
  operations                             --             48            --         48
Segment profit (loss)                   716          2,348          (139)     2,925
</TABLE>

<PAGE>

Note H - 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. 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  General  Partner  and  several  of  their   affiliated
partnerships  and corporate  entities.  The action  purports to assert claims on
behalf of a class of limited  partners and derivatively on behalf of a number of
limited  partnerships  (including  the  Partnership)  which are named as nominal
defendants,  challenging the acquisition of interests in certain general partner
entities by Insignia Financial Group, Inc. and entities which were, at one time,
affiliates of Insignia; past tender offers by the Insignia affiliates to acquire
limited  partnership  units;  the  management  of  partnerships  by the Insignia
affiliates;  and the Insignia  Merger.  The plaintiffs seek monetary damages and
equitable relief, including judicial dissolution of the Partnership. On June 25,
1998,  the General  Partner filed a motion seeking  dismissal of the action.  In
lieu  of  responding  to the  motion,  the  plaintiffs  have  filed  an  amended
complaint.  The General Partner filed  demurrers to the amended  complaint which
were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims,  subject to final court approval,  on behalf of the Partnership
and all limited  partners  who owned  units as of November 3, 1999.  Preliminary
approval of the settlement  was obtained on November 3, 1999 from the Court,  at
which time the Court set a final approval  hearing for December 10, 1999.  Prior
to the December 10, 1999 hearing,  the Court received various  objections to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December  14,  1999,  the General  Partner  and its  affiliates  terminated  the
proposed settlement.  In February 2000, counsel for some of the named plaintiffs
filed a motion to disqualify plaintiff's lead and liaison counsel who negotiated
the settlement.  On June 27, 2000, the Court entered an order disqualifying them
from the case. The Court will entertain applications for lead counsel which must
be filed by August 4, 2000. The Court has scheduled a hearing on August 21, 2000
to address the issue of appointing  lead counsel.  The General  Partner does not
anticipate  that  costs  associated  with  this  case  will be  material  to the
Partnership's overall operations.

The  Partnership is unaware of any other pending or outstanding  litigation that
is not of a routine nature arising in the ordinary course of business.

<PAGE>

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The  matters  discussed  in this Form  10-QSB  contain  certain  forward-looking
statements  and  involve  risks and  uncertainties  (including  changing  market
conditions,   competitive  and  regulatory   matters,   etc.)  detailed  in  the
disclosures  contained  in this  Form  10-QSB  and the  other  filings  with the
Securities and Exchange Commission made by the Registrant from time to time. The
discussion of the  Registrant's  business and results of  operations,  including
forward-looking  statements  pertaining  to such  matters,  does not  take  into
account the effects of any changes to the  Registrant's  business and results of
operations.  Accordingly,  actual  results  could differ  materially  from those
projected in the forward-looking  statements as a result of a number of factors,
including those identified herein.

The  Partnership's  investment  properties  at June 30,  2000  consist  of seven
apartment complexes. The following table sets forth the average occupancy of the
properties for each of the six month periods ended June 30, 2000 and 1999:

                                                  Average Occupancy

      Property                                     2000       1999

      Cedar Rim                                     94%        92%
        New Castle, Washington
      Hidden Cove by the Lake                       94%        87%
        Belleville, Michigan
      Lamplighter Park                              97%        95%
        Bellevue, Washington
      Park Capital                                  95%        97%
        Salt Lake City, Utah
      Sandpiper I and II                            97%        94%
        St. Petersburg, Florida
      Tamarac Village I, II, III, IV                97%        97%
        Denver, Colorado
      Williamsburg Manor                            96%        97%
        Cary, North Carolina

The General Partner attributes the occupancy increase at Hidden Cove by the Lake
to the rental of the damaged  units from the ice storm in January  1999 that are
now repaired as well as increased  marketing  and  advertising.  The increase in
occupancy at Sandpiper I and II is due to increased  marketing  and  advertising
and increased traffic in the area of the property.

Results of Operations

The  Partnership had net income of  approximately  $1,450,000 for the six months
ended June 30, 2000  compared  to  approximately  $3,553,000  for the six months
ended June 30, 1999. The  Partnership had net income of  approximately  $896,000
for the three months ended June 30, 2000  compared to  approximately  $2,925,000
for the three months ended June 30, 1999. Net income decreased for the three and
six month  periods ended June 30, 2000 due to the gain on sale  recognized  from
the sale of South City Business Center as well as a reduction in income from the
property as well as Corporate Center which was sold during the fourth quarter of
1999.  As the result of the sale of South  City  Business  Center and  Corporate
Center in 1999,  as  discussed  below,  the results of  operations  of these two
commercial  properties were classified as "Income from discontinued  operations"
on the statements of operations.

Excluding  the  results of the  discontinued  operations  discussed  above,  the
Partnership had income from continuing  operations of  approximately  $1,450,000
for the six months ended June 30, 2000 compared to approximately  $1,088,000 for
the six months ended June 30, 1999.  Excluding  the results of the  discontinued
operations,   the  Partnership   had  income  from   continuing   operations  of
approximately  $896,000  for the three  months  ended June 30, 2000  compared to
approximately $577,000 for the three months ended June 30, 1999. The increase in
income from continuing operations for the three and six month periods ended June
30, 2000 is due to an increase in total revenues partially offset by an increase
in total expenses.  Total revenues  increased for the comparable  periods due to
increases  in both  rental and other  income.  Rental  income  increased  due to
increased  average  rental  rates  at all of the  Partnership's  properties  and
decreased  concession  costs at Hidden Cove by the Lake and  Sandpiper I and II.
Decreased  occupancy  at Park  Capital  and  Williamsburg  Manor  was  offset by
increased occupancy at Cedar Rim, Hidden Cove by the Lake, Lamplighter Park, and
Sandpiper I and II. Other income  increased due to increased  utility  income at
Tamarac Village and increased interest income.

Total expenses increased for the three and six month periods ended June 30, 2000
due  primarily to increased  depreciation  and property tax expenses  which were
partially offset by decreased operating expenses. Depreciation expense increased
due to capital  improvements  completed  during the past twelve months which are
now being  depreciated.  Property  tax  expense  increased  primarily  due to an
increase in  assessed  value at Cedar Rim and a refund  received  during 1999 at
City  Heights,  which was sold in November  1998,  of taxes paid in prior years.
Operating expenses decreased primarily due to the decreased maintenance expenses
at all the Partnership's  properties during 2000. These decreases were partially
offset by increased  utility charges and manager  salaries  primarily at Tamarac
Village.

General and administrative  expenses remained relatively  constant.  Included in
general and administrative expenses at June 30, 2000 and 1999 are reimbursements
to the General Partner allowed under the Partnership  Agreement  associated with
its  management  of the  Partnership.  In addition,  costs  associated  with the
quarterly and annual  communications  with investors and regulatory agencies and
the annual audit required by the Partnership Agreement are included.

In June 1999,  South City Business Center,  located in Chula Vista,  California,
was sold to an  unaffiliated  party for  $6,962,000.  After  payment  of closing
expenses,  the net sales proceeds received by the Partnership were approximately
$6,573,000.  For financial  statement  purposes,  the sale resulted in a gain of
approximately $2,300,000.

South City Business  Center and Corporate  Center which was sold in October 1999
to an  unaffiliated  third  party  were the last  commercial  properties  in the
commercial segment of the Partnership. Due to the sale of the properties in June
1999 and October 1999,  respectively,  the income of both of the  properties has
been classified as "Income from  discontinued  operations" for the three and six
month  periods  ended  June  30,  1999.   Revenues  of  these   properties  were
approximately  $785,000 for the six months ended June 30, 1999 and approximately
$344,000 for the three months ended June 30,  1999.  Income from  operations  of
these  properties was  approximately  $165,000 for the six months ended June 30,
1999 and  approximately  $48,000  for the  three  months  ended  June 30,  1999,
respectively.

As part of the ongoing  business plan of the  Partnership,  the General  Partner
monitors the rental market  environment of each of its investment  properties to
assess the feasibility of increasing rents,  maintaining or increasing occupancy
levels and protecting  the  Partnership  from increases in expenses.  As part of
this plan,  the General  Partner  attempts to protect the  Partnership  from the
burden of  inflation-related  increases  in  expenses  by  increasing  rents and
maintaining a high overall  occupancy  level.  However,  due to changing  market
conditions,  which  can  result  in the use of  rental  concessions  and  rental
reductions to offset softening market conditions, there is no guarantee that the
General Partner will be able to sustain such a plan.

<PAGE>

Liquidity and Capital Resources

At  June  30,  2000,  the  Partnership   held  cash  and  cash   equivalents  of
approximately $3,696,000 compared to approximately $12,682,000 at June 30, 1999.
The  decrease  in cash and cash  equivalents  for the six months  ended June 30,
2000,  from the  Partnership's  year ended  December 31, 1999 was  approximately
$1,755,000.  This  decrease is due to  approximately  $3,822,000 of cash used in
financing  activities  and  approximately  $490,000  of cash  used in  investing
activities  which was  partially  offset  by  approximately  $2,557,000  of cash
provided by operating activities. Cash used in financing activities consisted of
distributions to the partners.  Cash used in investing  activities  consisted of
property  improvements  and  replacements  which  was  partially  offset  by net
receipts from restricted  escrows.  The Partnership  invests its working capital
reserves in money market accounts.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at the  properties  to  adequately  maintain the physical
assets and other  operating  needs of the Registrant and to comply with Federal,
state, and local legal and regulatory requirements. Capital improvements planned
for each of the Registrant's properties are detailed below.

Cedar Rim

During  the  six  months  ended  June  30,  2000,  the   Partnership   completed
approximately  $31,000  of  capital  improvements  at the  property,  consisting
primarily  of  sewer  replacement,  carpet  replacement,   interior  decorating,
building structural improvements, and appliances. These improvements were funded
primarily from the property's operating cash flow. The Partnership has evaluated
the capital  improvement needs of the property for the year. The amount budgeted
is approximately $56,000,  consisting primarily of appliances,  carpet and vinyl
replacements,  and plumbing upgrades.  Additional improvements may be considered
and will depend on the physical condition of the property as well as replacement
reserves and anticipated cash flow generated by the property.

Hidden Cove by the Lake

During  the  six  months  ended  June  30,  2000,  the   Partnership   completed
approximately   $65,000  of  budgeted  and  non-budgeted  capital  improvements,
consisting primarily of building structural improvements,  air conditioning unit
replacement,  landscaping, carpet replacement, heating upgrades, and appliances.
These  improvements  were funded from the  property's  replacement  reserves and
operating cash flow. The Partnership has evaluated the capital improvement needs
of the  property for the year.  The amount  budgeted is  approximately  $47,000,
consisting   primarily  of  swimming  pool  upgrades,   air  conditioning   unit
replacement,  appliances, carpet replacement, and major landscaping.  Additional
improvements may be considered and will depend on the physical  condition of the
property as well as replacement  reserves and anticipated cash flow generated by
the property.

Lamplighter Park

During  the  six  months  ended  June  30,  2000,  the   Partnership   completed
approximately  $48,000 of capital  improvements,  consisting primarily of carpet
and  vinyl  replacement,  appliances,  plumbing  upgrades,  and  other  building
improvements.  These  improvements  were funded from  replacement  reserves  and
operating cash flow. The Partnership has evaluated the capital improvement needs
of the  property for the year.  The amount  budgeted is  approximately  $82,000,
consisting  primarily of plumbing upgrades,  carpet and vinyl  replacement,  and
heating improvements.  Additional improvements may be considered and will depend
on the physical  condition of the property as well as  replacement  reserves and
anticipated cash flow generated by the property.

<PAGE>

Park Capital

During  the  six  months  ended  June  30,  2000,  the   Partnership   completed
approximately  $63,000 of capital  improvements,  consisting primarily of carpet
and  vinyl  replacement,   parking  lot  enhancements,   and  appliances.  These
improvements were funded from replacement  reserves and operating cash flow. The
Partnership has evaluated the capital  improvement needs of the property for the
year. The amount  budgeted is  approximately  $89,000,  consisting  primarily of
appliances,   carpet  and  vinyl  replacement,  and  parking  lot  enhancements.
Additional  improvements  may be  considered  and will  depend  on the  physical
condition of the property as well as replacement  reserves and anticipated  cash
flow generated by the property.

Tamarac Village

During  the  six  months  ended  June  30,  2000,  the   Partnership   completed
approximately  $196,000 of capital improvements,  consisting primarily of carpet
and vinyl replacement,  appliances,  electrical upgrades, exterior painting, and
plumbing upgrades.  These improvements were funded from replacement reserves and
operating cash flow. The Partnership has evaluated the capital improvement needs
of the property for the year.  The amount  budgeted is  approximately  $952,000,
consisting primarily of carpet and vinyl replacement,  structural  improvements,
and plumbing upgrades. Additional improvements may be considered and will depend
on the physical  condition of the property as well as  replacement  reserves and
anticipated cash flow generated by the property.

Williamsburg Manor

During  the  six  months  ended  June  30,  2000,  the   Partnership   completed
approximately  $51,000  of capital  improvements,  consisting  primarily  of air
conditioning  unit   replacement,   cabinet   replacements,   carpet  and  vinyl
replacement,  landscaping,  and appliances.  These expenditures were funded from
replacement  reserves.  The  Partnership  has evaluated the capital  improvement
needs of the  property  for the  year.  The  amount  budgeted  is  approximately
$60,000,  consisting primarily of appliances, air conditioning unit replacement,
and carpet and vinyl replacements. Additional improvements may be considered and
will depend on the physical  condition  of the  property as well as  replacement
reserves and anticipated cash flow generated by the property.

Sandpiper I and II

During  the  six  months  ended  June  30,  2000,  the   Partnership   completed
approximately  $172,000 of capital  improvements  consisting  primarily of sewer
replacement,  carpet  and  vinyl  replacement,   plumbing  upgrades,  structural
improvements, roof replacement, and cabinet replacement. These improvements were
funded from  replacement  reserves.  The  Partnership  has evaluated the capital
improvement  needs  of the  property  for  the  year.  The  amount  budgeted  is
approximately   $204,000,   consisting   primarily  of  air  conditioning   unit
replacement,  cabinet  replacement,  carpet and vinyl replacement,  and plumbing
upgrades.  Additional  improvements  may be  considered  and will  depend on the
physical  condition  of  the  property  as  well  as  replacement  reserves  and
anticipated cash flow generated by the property.

The additional  capital  expenditures will be incurred only if cash is available
form operations or from Partnership  reserves.  To the extent that such budgeted
capital improvements are required, the Registrant's  distributable cash flow, if
any, may be adversely affected.

The  Partnership is required by the  Partnership  Agreement to maintain  working
capital  reserves for  contingencies of not less than 5% of Net Invested Capital
as defined by the Partnership Agreement. In the event expenditures are made from
this reserve, operating revenue shall be allocated to such reserve to the extent
necessary to maintain the foregoing level. At June 30, 2000, reserves, including
cash and securities available for sale, totaling approximately $4.2 million were
greater than the reserve requirement of approximately $2.6 million.

The Partnership's  current assets are thought to be sufficient for any near-term
needs  (exclusive  of capital  improvements)  of the  Registrant.  The  mortgage
indebtedness  of  $27,925,000  has maturity dates ranging from 2003 to 2005. The
General  Partner  will attempt to refinance  such  indebtedness  and/or sell the
properties prior to such maturity dates. If the properties  cannot be refinanced
or sold for a sufficient  amount, the Registrant may risk losing such properties
through foreclosure.

During the six months ended June 30,  2000,  the  Partnership  declared and paid
distributions   in  the  amount  of  approximately   $3,822,000   (approximately
$3,784,000 to the limited partners or $9.88 per limited  partnership  unit) from
operations.  During the six months ended June 30, 1999, the  Partnership  made a
distribution in the amount of approximately $4,113,000 (approximately $4,072,000
to the limited partners or $10.63 per limited  partnership unit) from operations
and approximately $5,787,000  (approximately  $5,729,000 to the limited partners
or $14.96 per limited  partnership  unit) of sales  proceeds  from City Heights.
Future  cash  distributions  will  depend on the levels of cash  generated  from
operations, timing of debt maturities,  refinancings, and/or property sales, and
the  availability of cash reserves.  The  Partnership's  distribution  policy is
reviewed on a quarterly  basis.  There can be no  assurance,  however,  that the
Partnership  will  generate  sufficient  funds from  operations  after  required
capital expenditures to permit further  distributions to its partners during the
remainder of 2000 or subsequent periods.

<PAGE>

                           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. 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  General  Partner  and  several  of  their   affiliated
partnerships  and corporate  entities.  The action  purports to assert claims on
behalf of a class of limited  partners and derivatively on behalf of a number of
limited  partnerships  (including  the  Partnership)  which are named as nominal
defendants,  challenging the acquisition of interests in certain general partner
entities by Insignia Financial Group, Inc. and entities which were, at one time,
affiliates of Insignia; past tender offers by the Insignia affiliates to acquire
limited  partnership  units;  the  management  of  partnerships  by the Insignia
affiliates;  and the Insignia  Merger.  The plaintiffs seek monetary damages and
equitable relief, including judicial dissolution of the Partnership. On June 25,
1998,  the General  Partner filed a motion seeking  dismissal of the action.  In
lieu  of  responding  to the  motion,  the  plaintiffs  have  filed  an  amended
complaint.  The General Partner filed  demurrers to the amended  complaint which
were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims,  subject to final court approval,  on behalf of the Partnership
and all limited  partners  who owned  units as of November 3, 1999.  Preliminary
approval of the settlement  was obtained on November 3, 1999 from the Court,  at
which time the Court set a final approval  hearing for December 10, 1999.  Prior
to the December 10, 1999 hearing,  the Court received various  objections to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December  14,  1999,  the General  Partner  and its  affiliates  terminated  the
proposed settlement.  In February 2000, counsel for some of the named plaintiffs
filed a motion to disqualify plaintiff's lead and liaison counsel who negotiated
the settlement.  On June 27, 2000, the Court entered an order disqualifying them
from the case. The Court will entertain applications for lead counsel which must
be filed by August 4, 2000. The Court has scheduled a hearing on August 21, 2000
to address the issue of appointing  lead counsel.  The General  Partner does not
anticipate  that  costs  associated  with  this  case  will be  material  to the
Partnership's overall operations.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            a)    Exhibits:

                  Exhibit 27, Financial Data Schedule, is filed as an exhibit to
                  this report.

            b)    Reports on Form 8-K:

                  None filed during the quarter ended June 30, 2000.

<PAGE>

                                   SIGNATURES

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

                                 CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3


                                 By:   CONCAP EQUITIES, INC.
                                       Its General Partner

                                 By:   /s/Patrick J. Foye
                                       Patrick J. Foye
                                       Executive Vice President

                                 By:   /s/Martha L. Long
                                       Martha L. Long
                                       Senior Vice President
                                       and Controller

                                 Date: