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 September 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)

                               September 30, 2000


Assets
   Cash and cash equivalents                                            $ 4,165
   Receivables and deposits                                               1,102
   Restricted escrows                                                       298
   Other assets                                                             565
   Investment properties:
      Land                                               $  8,641
      Buildings and related personal property              45,923
                                                           54,564
      Less accumulated depreciation                       (19,363)       35,201
                                                                       $ 41,331
Liabilities and Partners' (Deficit) Capital
Liabilities
   Accounts payable                                                       $ 134
   Tenant security deposit liabilities                                      325
   Accrued property taxes                                                   443
   Other liabilities                                                        406
   Mortgage notes payable                                                27,925

Partners' (Deficit) Capital
   General partner                                        $  (720)
   Limited partners (383,033 units outstanding)            12,818        12,098
                                                                       $ 41,331

                   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 Nine Months
                                           Ended September 30,       Ended September 30,
                                            2000         1999         2000        1999
Revenues:
<S>                                       <C>          <C>          <C>          <C>
  Rental income                           $ 3,221      $ 3,041      $ 9,536      $ 8,987
  Other income                                343          285          892          739
      Total revenues                        3,564        3,326       10,428        9,726

Expenses:
  Operating                                 1,133        1,138        3,377        3,467
  General and administrative                  238          154          557          477
  Depreciation                                715          715        2,154        1,991
  Interest                                    533          523        1,580        1,571
  Property taxes                              201          162          566          498
      Total expenses                        2,820        2,692        8,234        8,004

Income from continuing operations             744          634        2,194        1,722
Income from discontinued operations            --           11           --          176
Gain on sale of discontinued
  operations                                   --            2           --        2,302

Net income                                 $  744        $ 647      $ 2,194      $ 4,200

Net income allocated to general
  partner (1%)                              $   7          $ 6         $ 22         $ 42
Net income allocated to limited
  partners (99%)                              737          641        2,172        4,158

                                           $  744        $ 647      $ 2,194      $ 4,200
Per limited partnership unit:
  Income from continuing operations        $ 1.92       $ 1.64       $ 5.67      $  4.45
  Income from discontinued operations          --         0.03           --         0.46
  Gain on sale of discontinued
   operations                                  --           --           --         5.95

Net income                                 $ 1.92       $ 1.67       $ 5.67      $ 10.86

Distributions per limited
  partnership unit                         $ 1.38      $ 21.76      $ 11.26      $ 47.35

                   See Accompanying Notes to Financial Statements
</TABLE>

<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                  --          (44)      (4,314)      (4,358)

Net income for the nine months
   ended September 30, 2000                --            22       2,172        2,194

Partners' (deficit) capital at
   September 30, 2000                 383,033       $ (720)     $12,818      $12,098
</TABLE>


                   See Accompanying Notes to Financial Statements

<PAGE>

d)

                  CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                   Nine Months Ended
                                                                      September 30,
                                                                    2000        1999
Cash flows from operating activities:
<S>                                                               <C>         <C>
  Net income                                                      $ 2,194     $ 4,200
  Adjustments to reconcile net income to net cash
   provided by operating activities:
      Depreciation                                                  2,154       1,991
      Amortization of lease commissions and loan costs                 76          67
      Gain on sale of investment property                              --      (2,302)
      Loss on disposal of property                                     --          97
      Change in accounts:
        Receivables and deposits                                     (549)         64
        Other assets                                                  (54)        121
        Accounts payable                                             (179)        334
        Due to affiliate                                             (125)       (465)
        Tenant security deposit liabilities                            44         (14)
        Accrued property taxes                                        256         105
        Other liabilities                                             (44)         27

         Net cash provided by operating activities                  3,773       4,225

Cash flows from investing activities:
  Property improvements and replacements                           (1,271)     (1,360)
  Net receipts from restricted escrows                                570         103
  Proceeds from sale of investment property                            --       6,575

         Net cash (used in) provided by investing activities         (701)      5,318

Cash flows used in financing activities:
  Distributions to partners                                        (4,358)    (11,419)

Net decrease in cash and cash equivalents                          (1,286)     (1,876)

Cash and cash equivalents at beginning of period                    5,451      13,993

Cash and cash equivalents at end of period                        $ 4,165    $ 12,117

Supplemental disclosure of cash flow information:
  Cash paid for interest                                          $ 1,504     $ 1,504

Supplemental disclosure of non-cash financing activity:
  Distribution payable                                            $    --     $ 6,900

At December  31, 1999 and  September  30,  2000,  accounts  payable and property
improvements and replacements were adjusted by approximately $91,000.
</TABLE>

                   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 nine month  periods  ended  September  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 nine month periods ended September 30, 2000 and 1999:

                                                                  2000      1999
                                                                  (in thousands)

 Property management fees (included in operating expenses)        $511      $479
 Reimbursements for services of affiliates (included in
   investment properties, general and administrative
   expenses, and operating expenses)                               368       257
 Real estate brokerage commissions (included in gain on
   sale of discontinued operations)                                 --       334

During the nine months  ended  September  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
$511,000 and $479,000 for  management  fees for the nine months ended  September
30, 2000 and 1999, respectively.

An  affiliate  of the General  Partner  received  reimbursement  of  accountable
administrative expenses amounting to approximately $368,000 and $257,000 for the
nine month periods ended September 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 nine months ended  September  30, 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. The commission was accrued at December 31, 1999 and paid
during 2000.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,   AIMCO  and  its  affiliates   currently  own  190,114.8   limited
partnership  units in the  Partnership  representing  49.63% 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.  Under the Partnership  Agreement,  unitholders  holding a
majority of the Units are  entitled to take action with  respect to a variety of
matters, which would include without limitation, voting on certain amendments to
the Partnership  Agreement and voting to remove the General Partner. As a result
of its ownership of 49.63% 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

Until  October  17,  2000,  the  Partnership  was  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  were made from this reserve,  operating  revenue were to be
allocated  to such reserve to the extent  necessary  to maintain  the  foregoing
level.  Reserves,  including  cash and securities  available for sale,  totaling
approximately   $4,200,000,   were  greater  than  the  reserve  requirement  of
approximately  $2,600,000 at September 30, 2000.  During the third quarter,  the
Partnership  solicited the vote of the Limited  Partners to approve an amendment
to the  Partnership  Agreement.  The effect of the  amendment was to change such
provision to require the Partnership to maintain  reasonable reserves for normal
working capital and  contingencies in an amount  determined from time to time by
the General  Partner in its sole  discretion.  The  Solicitation  Statement  was
mailed to Limited  Partners on September  16, 2000.  Upon the  expiration of the
solicitation  period  (close of  business on October 16,  2000),  the  requisite
number of positive votes were received to effect this amendment.

Note E - Distributions

The  Partnership  paid  distributions  of  cash  generated  from  operations  of
approximately  $4,358,000  (approximately  $4,314,000 to the limited partners or
$11.26 per limited  partnership  unit) for the nine months ended  September  30,
2000.  Subsequent  to  September  30,  2000,  the  General  Partner  declared  a
distribution   from  operations  of  approximately   $3,638,000   (approximately
$3,602,000 to the limited partners or $9.40 per limited  partnership  unit). The
Partnership   distributed   cash  generated  from  operations  of  approximately
$5,632,000  (approximately  $5,576,000  to the  limited  partners  or $14.56 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 nine  months  ended  September  30,  1999.
Subsequent to September 30, 1999, the General  Partner paid a distribution  from
operations  of  approximately  $326,000  (approximately  $323,000 to the limited
partners or $0.84 per limited  partnership  unit) and  approximately  $6,574,000
(approximately  $6,508,000  to  the  limited  partners  or  $16.99  per  limited
partnership  unit) from the sale proceeds from South City Business Center,  both
of which were  approved and accrued  during the nine months ended  September 30,
1999.

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
$6,575,000.  For financial  statement  purposes,  the sale resulted in a gain of
approximately $2,302,000.

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 nine
month  periods  ended  September  30, 1999.  Revenues of these  properties  were
approximately  $907,000  for the  nine  months  ended  September  30,  1999  and
approximately  $122,000 for the three months ended  September  30, 1999.  Income
from  operations of these  properties  was  approximately  $176,000 for the nine
months ended September 30, 1999 and  approximately  $11,000 for the three months
ended September 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.

Segment  information  for the three and nine month periods  ended  September 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).


       Nine Months Ended
       September 30, 2000        Residential       Other      Totals

Rental income                      $ 9,536        $   --     $ 9,536
Other income                           818            74         892
Interest expense                     1,580            --       1,580
Depreciation                         2,154            --       2,154
General and administrative
  expenses                              --           557         557
Segment profit (loss)                2,677          (483)      2,194
Total assets                        26,199        15,132      41,331
Capital expenditures for
  investment properties              1,180            --       1,180


       Three Months Ended
       September 30, 2000        Residential       Other      Totals

Rental income                      $ 3,221        $   --     $ 3,221
Other income                           308            35         343
Interest expense                       533            --         533
Depreciation                           715            --         715
General and administrative
  expenses                              --           238         238
Segment profit (loss)                  947          (203)        744

<TABLE>
<CAPTION>

       Nine Months Ended
       September 30, 1999         Residential    Commercial        Other     Totals
                                               (discontinued)
<S>                                 <C>             <C>             <C>     <C>
Rental income                       $ 8,987         $   --          $ --    $ 8,987
Other income                            564             --           175        739
Interest expense                      1,571             --            --      1,571
Depreciation                          1,991             --            --      1,991
General and administrative
  expenses                               --             --           477        477
Gain on sale of discontinued
  operations                             --          2,302            --      2,302
Income from discontinued
  operations                             --            176            --        176
Segment profit (loss)                 2,024          2,478          (302)     4,200
Total assets                         29,001          2,200        22,283     53,484
Capital expenditures for
  investment properties               1,360             --            --      1,360


       Three Months Ended
       September 30, 1999         Residential    Commercial        Other      Totals
                                               (discontinued)
Rental income                       $ 3,041         $   --          $ --     $ 3,041
Other income                            233             --            52         285
Interest expense                        523             --            --         523
Depreciation                            715             --            --         715
General and administrative
  expenses                               --             --           154         154
Gain on sale of discontinued
  operations                             --              2            --           2
Income from discontinued
  operations                             --             11            --          11
Segment profit (loss)                   736             13          (102)        647
</TABLE>

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 is considering  applications  for lead counsel and has
currently  scheduled a hearing on the matter for November 20, 2000.  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 September 30, 2000 consist of seven
apartment complexes. The following table sets forth the average occupancy of the
properties for each of the nine month periods ended September 30, 2000 and 1999:

                                                  Average Occupancy
      Property                                     2000       1999

      Cedar Rim                                     93%        93%
        New Castle, Washington
      Hidden Cove by the Lake                       94%        90%
        Belleville, Michigan
      Lamplighter Park                              97%        95%
        Bellevue, Washington
      Park Capital                                  95%        98%
        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                            97%        96%
        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.  The decrease in occupancy at
Park Capital is due to increased competition due to new construction in the Salt
Lake City area.

Results of Operations

The Partnership had net income of  approximately  $2,194,000 for the nine months
ended  September  30, 2000  compared to  approximately  $4,200,000  for the nine
months ended September 30, 1999. The Partnership had net income of approximately
$744,000 for the three months ended September 30, 2000 compared to approximately
$647,000 for the three months ended September 30, 1999. Net income decreased for
the  nine  month  period  ended  September  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 this property and 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  $2,194,000
for  the  nine  months  ended  September  30,  2000  compared  to  approximately
$1,722,000 for the nine months ended  September 30, 1999.  Excluding the results
of the  discontinued  operations,  the  Partnership  had income from  continuing
operations of  approximately  $744,000 for the three months ended  September 30,
2000 compared to approximately $634,000 for the three months ended September 30,
1999. The increase in income from  continuing  operations for the three and nine
month periods ended  September 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,  increased occupancy primarily at Sandpiper I and II,
Hidden Cove by the Lake, and Lamplighter Park, and decreased concession costs at
Sandpiper I and II. These  increases in rental income were  partially  offset by
decreased  occupancy at Park  Capital.  Other income  increased due to increased
utility  income  primarily  at Tamarac  Village  which was  partially  offset by
decreased  interest income of the Partnership due to lower average cash balances
in interest bearing accounts.

Total expenses  increased for the nine month period ended September 30, 2000 due
primarily   to   increased   depreciation,   property   tax,   and  general  and
administrative  expenses  which were  partially  offset by  decreased  operating
expenses.  Total expenses  increased for the three month period ended  September
30, 2000 due primarily to increased  property tax and general and administrative
expenses. Depreciation expense increased for the nine months ended September 30,
2000 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  values at  Williamsburg  Manor,  Sandpiper I and II, and
Tamarac  Village and a refund  received  during 1999 at City Heights,  which was
sold in November 1998, of taxes paid in prior years.  General and administrative
expenses  increased  due  primarily  to an  increase in fees paid to the General
Partner.  Included in general and administrative  expenses at September 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.  Operating  expenses decreased for the nine month period primarily
due to decreased maintenance expenses at all the Partnership's properties during
2000.  These decreases were partially  offset by increased  utility expenses and
manager salaries primarily at Tamarac Village.

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
$6,575,000.  For financial  statement  purposes,  the sale resulted in a gain of
approximately $2,302,000.

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 nine
month  periods  ended  September  30, 1999.  Revenues of these  properties  were
approximately  $907,000  for the  nine  months  ended  September  30,  1999  and
approximately  $122,000 for the three months ended  September  30, 1999.  Income
from  operations of these  properties  was  approximately  $176,000 for the nine
months ended September 30, 1999 and  approximately  $11,000 for the three months
ended September 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.

Liquidity and Capital Resources

At  September  30,  2000,  the  Partnership  held cash and cash  equivalents  of
approximately $4,165,000 compared to approximately  $12,117,000 at September 30,
1999.  The  decrease  in cash and cash  equivalents  for the nine  months  ended
September  30, 2000,  from the  Partnership's  year ended  December 31, 1999 was
approximately  $1,286,000.  This decrease is due to approximately  $4,358,000 of
cash used in financing  activities  and  approximately  $701,000 of cash used in
investing  activities which was partially offset by approximately  $3,773,000 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 nine months ended  September  30,  2000,  the  Partnership  completed
approximately  $45,000  of  capital  improvements  at the  property,  consisting
primarily  of  plumbing  fixtures,  carpet  replacement,   interior  decorating,
building structural improvements, and appliances. These improvements were funded
primarily from the property's operating cash flow and replacement reserves.  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 nine months ended  September  30,  2000,  the  Partnership  completed
approximately   $85,000  of  budgeted  and  non-budgeted  capital  improvements,
consisting primarily of building structural improvements,  air conditioning unit
replacement,  major  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 nine months ended  September  30,  2000,  the  Partnership  completed
approximately  $64,000 of capital  improvements,  consisting primarily of carpet
and vinyl replacement,  appliances,  plumbing upgrades,  and building structural
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.

Park Capital

During the nine months ended  September  30,  2000,  the  Partnership  completed
approximately  $132,000 of capital improvements,  consisting primarily of carpet
and vinyl  replacement,  parking lot  enhancements,  and light  fixtures.  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  $139,000,  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 nine months ended  September  30,  2000,  the  Partnership  completed
approximately  $550,000 of capital improvements,  consisting primarily of carpet
and vinyl replacement,  interior  decoration,  parking lot upgrades,  electrical
upgrades,  major landscaping,  pool enhancements,  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 nine months ended  September  30,  2000,  the  Partnership  completed
approximately   $86,000  of  budgeted  and  non-budgeted  capital  improvements,
consisting primarily of air conditioning unit replacement, cabinet replacements,
carpet and vinyl  replacement,  counter top replacement,  and appliances.  These
expenditures 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  $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 nine months ended  September  30,  2000,  the  Partnership  completed
approximately  $218,000  of capital  improvements  consisting  primarily  of air
conditioning unit 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  $353,000,  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
from 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.

Until  October  17,  2000,  the  Partnership  was  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  were made from this reserve,  operating  revenue were to be
allocated  to such reserve to the extent  necessary  to maintain  the  foregoing
level.  Reserves,  including  cash and securities  available for sale,  totaling
approximately   $4,200,000,   were  greater  than  the  reserve  requirement  of
approximately  $2,600,000 at September 30, 2000.  During the third quarter,  the
Partnership  solicited the vote of the Limited  Partners to approve an amendment
to the  Partnership  Agreement.  The effect of the  amendment was to change such
provision to require the Partnership to maintain  reasonable reserves for normal
working capital and  contingencies in an amount  determined from time to time by
the General  Partner in its sole  discretion.  The  Solicitation  Statement  was
mailed to Limited  Partners on September  16, 2000.  Upon the  expiration of the
solicitation  period  (close of  business on October 16,  2000),  the  requisite
number of positive votes were received to effect this amendment.

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 nine months ended  September 30, 2000, the  Partnership  declared and
paid  distributions  in the amount of  approximately  $4,358,000  (approximately
$4,314,000 to the limited partners or $11.26 per limited  partnership unit) from
operations.  Subsequent to September 30, 2000,  the General  Partner  declared a
distribution   from  operations  of  approximately   $3,638,000   (approximately
$3,602,000  to the  limited  partners or $9.40 per  limited  partnership  unit).
During  the nine  months  ended  September  30,  1999,  the  Partnership  made a
distribution in the amount of approximately $5,632,000 (approximately $5,576,000
to the limited partners or $14.56 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.
Subsequent to September 30, 1999, the General  Partner paid a distribution  from
operations  of  approximately  $326,000  (approximately  $323,000 to the limited
partners or $0.84 per limited  partnership  unit) and  approximately  $6,574,000
(approximately  $6,508,000  to  the  limited  partners  or  $16.99  per  limited
partnership  unit) from the sale proceeds from South City Business Center,  both
of which were  approved and accrued  during the nine months ended  September 30,
1999. 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 is considering  applications  for lead counsel and has
currently  scheduled a hearing on the matter for November 20, 2000.  The General
Partner  does not  anticipate  that  costs  associated  with  this  case will be
material to the Partnership's overall operations.

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On September 16, 2000, the  Partnership  sought the vote of limited  partners to
amend the Partnership Agreement to eliminate the requirement for the Partnership
to  maintain  reserves  equal to at least 5% of the  limited  partners'  capital
contributions  less  distributions  to limited  partners and instead  permit the
General Partner to determine reasonable reserve requirements of the Partnership.
The vote was sought pursuant to a Consent  Solicitation  that expired on October
16, 2000 at which time the amendment  was approved by the  requisite  percent of
limited  partnership  interests.  Upon expiration of the consent period, a total
number of 231,362.1  units had voted of which 220.242.9 units had voted in favor
of the  amendment,  9,425.7  voted  against  the  amendment  and  1,693.5  units
abstained.


<PAGE>

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 September 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: