<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D. C. 20549

                                   Form 10-Q



(Mark one)

[X]  Quarterly report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934

For the quarterly period ended              September 30, 2001              or
                               --------------------------------------------

[_]  Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934

For the transition period from ________________________ to _____________________

Commission file number                          0-18407
                       ---------------------------------------------------------

                       WELLS REAL ESTATE FUND III, L.P.
--------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)

            Georgia                                        58-1800833
---------------------------------------     ------------------------------------
 (State or other jurisdiction of            (I.R.S. Employer Identification No.)
  incorporation or organization)

6200 The Corners Parkway, Suite 250 Norcross, Georgia           30092
-----------------------------------------------------  ------------------------
       (Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code         (770) 449-7800
                                                   -----------------------------

________________________________________________________________________________
  (Former name, former address and former fiscal year, if changed since last
                                    report)

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

         Yes     X        No
              -------         ------

                                       1
<PAGE>

                                   Form 10-Q

                       WELLS REAL ESTATE FUND III, L.P.

                        (A Georgia Limited Partnership)

                                     INDEX

<TABLE>
<CAPTION>
                                                                                                 Page No.
                                                                                                 --------
<S>                                                                                              <C>
PART I.       FINANCIAL INFORMATION

 Item 1.      Financial Statements

              Balance Sheets - September 30, 2001 and December 31, 2000                              3

              Statements of Income for the Three Months and Nine Months
                 Ended September 30, 2001 and 2000                                                   4

              Statements of Partners' Capital for the Nine Months Ended September 30, 2001
                 and the Year Ended December 31, 2000                                                5

              Statements of Cash Flows for the Nine Months Ended September 30, 2001
                 and 2000                                                                            6

              Condensed Notes to Financial Statements                                                7

 Item 2.      Management's Discussion and Analysis of Financial Condition and Results of
                 Operations                                                                          9

PART II.      OTHER INFORMATION                                                                     12
</TABLE>

                                       2
<PAGE>

                       WELLS REAL ESTATE FUND III, L.P.

                    (A Georgia Public Limited Partnership)

                                BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                                  September 30,       December 31,
                                                                                       2001              2000
                                                                                  -------------     --------------
<S>                                                                               <C>               <C>
ASSETS:
    Real estate, at cost:
       Land                                                                       $     576,350     $      576,350
    Building and improvements, less accumulated depreciation
       of $1,404,717 at September 30, 2001 and $1,267,475 at
       December 31, 2000                                                              2,316,834          2,429,457
                                                                                  -------------     --------------
                 Total real estate assets, net                                        2,893,184          3,005,807

    Cash and cash equivalents                                                           118,613            409,476
    Investment in joint ventures (Note 2)                                            10,844,085         10,862,926
    Due from affiliates                                                                 317,431            231,630
    Accounts receivable                                                                  12,358              5,313
    Prepaid expenses and other assets                                                    29,443             16,948
                                                                                  -------------     --------------
                 Total assets                                                     $  14,215,114     $   14,532,100
                                                                                  =============     ==============
LIABILITIES AND PARTNERS' CAPITAL:
    Liabilities:
       Accounts payable                                                           $       5,287     $       13,169
       Partnership distributions payable                                                300,021              6,769
                                                                                  -------------     --------------
                 Total liabilities                                                      305,308             19,938
                                                                                  -------------     --------------
    Partners' capital:
       Limited partners:
           Class A - 19,635,965 units outstanding                                    13,909,806         14,512,162
           Class B - 2,544,540 units outstanding                                              0                  0
                                                                                  -------------     --------------
                 Total partners' capital                                             13,909,806         14,512,162
                                                                                  -------------     --------------
                 Total liabilities and partners' capital                          $  14,215,114     $   14,532,100
                                                                                  =============     ==============
</TABLE>


            See accompanying condensed notes to financial statements

                                       3

<PAGE>

                       WELLS REAL ESTATE FUND III, L.P.

                    (A Georgia Public Limited Partnership)

                             STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                            Three Months Ended                Nine Months Ended
                                                     -----------------------------------------------------------------
                                                     September 30,    September 30,    September 30,     September 30,
                                                          2001            2000              2001             2000
                                                     -----------------------------------------------------------------
<S>                                                  <C>              <C>               <C>              <C>
Revenues:
     Rental income                                    $   48,744       $  145,683       $  223,164        $  430,089
     Equity in earnings of joint ventures
       (Note 2)                                          126,470           50,067          456,095           238,171
     Interest income                                       6,107            6,006            8,574             6,083
                                                     -----------------------------------------------------------------
                                                         181,321          201,756          687,833           674,343
                                                     -----------------------------------------------------------------
Expenses:
     Operating costs-rental properties, net
       of tenant reimbursements                           42,365           51,722          146,029           119,605
     Depreciation                                         44,384           42,763          137,242           128,289
     Partnership administration                           14,417           10,436           47,858            41,597
     Management and leasing fees                           5,511           19,234           27,608            57,706
     Legal and accounting                                  1,475              500           14,790            14,700
     Computer costs                                        2,997            1,153            8,504             5,247
                                                     -----------------------------------------------------------------
                                                         111,149          125,808          382,031           367,144
                                                     -----------------------------------------------------------------
     Net income                                       $   70,172       $   75,948       $  305,802        $  307,199
                                                     =================================================================

Net income allocated to Class A Limited
     Partners                                         $   70,172       $   75,948       $  305,802        $  307,199
                                                     =================================================================

Net loss allocated to Class B Limited
     Partners                                         $        0       $        0       $        0        $        0
                                                     =================================================================

Net income per Class A Limited Partner
     Unit                                             $     0.00       $     0.00       $     0.02        $     0.02
                                                     =================================================================

Cash distribution per Class A Limited
     Partner Unit                                     $     0.02       $     0.00       $     0.05        $     0.02
                                                     =================================================================
</TABLE>

            See accompanying condensed notes to financial statements

                                       4
<PAGE>

                       WELLS REAL ESTATE FUND III, L.P.

                    (A Georgia Public Limited Partnership)

                        STATEMENTS OF PARTNERS' CAPITAL

                     FOR THE YEAR ENDED DECEMBER 31, 2000

                 AND THE NINE MONTHS ENDED SEPTEMBER 30, 2001

<TABLE>
<CAPTION>
                                                     Limited Partners
                                    --------------------------------------------------
                                            Class A                     Class B              Total
                                    ------------------------    ----------------------     Partners'
                                       Units       Amounts        Units       Amounts       Capital
                                    ----------   -----------    ---------   ----------    -----------
    <S>                             <C>          <C>            <C>         <C>           <C>
    BALANCE, December 31, 1999      19,635,965   $14,521,435    2,544,540   $        0    $14,521,435

      Net income                             0       334,287            0            0        334,287
      Partnership distributions              0      (343,560)           0            0       (343,560)
                                    ----------   -----------    ---------   ----------    -----------
    BALANCE, December 31, 2000      19,635,965    14,512,162    2,544,540            0     14,512,162

      Net income                             0       305,802            0            0        305,802
      Partnership distributions              0      (908,158)           0            0       (908,158)
                                    ----------   -----------    ---------   ----------    -----------
    BALANCE, September 30, 2001     19,635,965   $13,909,806    2,544,540   $        0    $13,909,806
                                    ==========   ===========    =========   ==========    ===========
</TABLE>

            See accompanying condensed notes to financial statements.

                                       5
<PAGE>

                       WELLS REAL ESTATE FUND III, L.P.

                    (A Georgia Public Limited Partnership)

                           STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                    Nine Months Ended
                                                                         -------------------------------------
                                                                           September 30,         September 30,
                                                                                2001                 2000
                                                                         ---------------      ----------------
<S>                                                                      <C>                  <C>
Cash flow from operating activities:
  Net income                                                               $     305,802         $     307,199
  Adjustments to reconcile net income to net cash (used in)
   provided by operating activities:
         Equity in income of joint ventures                                     (456,095)             (238,171)
         Depreciation                                                            137,242               128,289
         Changes in assets and liabilities:
         Accounts receivable                                                      (7,045)                4,059
         Prepaids and other assets                                               (12,495)                1,783
         Accounts payable                                                         (7,882)               (4,321)
         Due from affiliates                                                       3,216                     0
                                                                         ---------------      ----------------
              Total adjustments                                                 (343,059)             (108,361)
                                                                         ---------------      ----------------
              Net cash (used in) provided by operating activities                (37,257)              198,838
                                                                         ---------------      ----------------
Cash flow from investing activities:

  Investment in real estate                                                      (24,619)              (23,591)
  Investment in joint ventures                                                  (502,340)             (135,166)
  Distributions received from joint ventures                                     888,259               844,343
                                                                         ---------------      ----------------
              Net cash provided by investing activities                          361,300               685,586
                                                                         ---------------      ----------------
Cash flow from financing activities:
 Partnership distribution paid                                                  (614,906)             (772,166)
                                                                         ---------------      ----------------

Net (decrease) increase in cash and cash equivalents                            (290,863)              112,258

Cash and cash equivalents, beginning of year                                     409,476               128,536
                                                                         ---------------      ----------------
Cash and cash equivalents, end of period                                   $     118,613         $     240,794
                                                                         ===============      ================
</TABLE>

            See accompanying condensed notes to financial statements.

                                       6
<PAGE>

                       WELLS REAL ESTATE FUND III, L.P.

                    (A Georgia Public Limited Partnership)

                    CONDENSED NOTES TO FINANCIAL STATEMENTS

                              SEPTEMBER 30, 2001


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     (a) General

     Wells Real Estate Fund III, L.P. (the "Partnership") is a Georgia public
     limited partnership with Leo F. Wells, III and Wells Capital, Inc., a
     Georgia corporation, serving as General Partners. The Partnership was
     formed on July 31, 1988, for the purpose of acquiring, developing,
     constructing, owning, operating, improving, leasing and otherwise managing
     income-producing commercial properties for investment purposes. The
     Partnership has two classes of limited partnership interests, Class A and
     Class B units. Limited partners may vote to, among other things, (a) amend
     the partnership agreement, subject to certain limitations, (b) change the
     business purpose or investment objectives of the Partnership, and (c) add
     or remove a general partner. A majority vote on any of the above described
     matters will bind the Partnership, without the concurrence of the general
     partners. Each limited partner unit has equal voting rights, regardless of
     class.

     On October 24, 1988, the Partnership commenced a public offering of its
     limited partnership units pursuant to a Registration Statement filed on
     Form S-11 under the Securities Act of 1933. The Partnership terminated its
     offering on October 23, 1990, and received gross proceeds of $22,206,319
     representing subscriptions from 2,700 Limited Partners, comprised of two
     classes of limited partnership interests, Class A and Class B limited
     partnership units.

     The Partnership owns interests in properties directly and through ownership
     in the following joint ventures with other Wells Real Estate Funds: (i)
     Fund II and Fund III Associates, a joint venture between the Partnership
     and Fund II-Fund IIOW Joint Venture ("Fund II - III Joint Venture"), (ii)
     Fund II, Fund III, Fund VI and Fund VII Associates, a joint venture between
     the Partnership, Fund II-Fund IIOW Joint Venture, Wells Real Estate Fund
     VI, L.P., and Wells Real Estate Fund VII, L.P. ("Fund II-III-VI-VII Joint
     Venture"), and (iii) Fund III and Fund IV Associates, a joint venture
     between the Partnership and Wells Real Estate Fund IV, L.P. ("Fund III - IV
     Joint Venture"). Fund II-Fund IIOW Joint Venture is a joint venture between
     Wells Real Estate Fund II and Wells Real Estate Fund IIOW.

     As of September 30, 2001, the Partnership owned interests in the following
     properties directly and through interests in the foregoing joint ventures:
     (i) Greenville Center, an office building in Greenville, North Carolina,
     owned by the Partnership, (ii) Boeing at the Atrium, an office building in
     Houston, Texas, owned by Fund II - III Joint Venture, (iii) Brookwood
     Grill, a restaurant located in Roswell, Georgia, owned by Fund II - III
     Joint Venture, (iv) Stockbridge Village Shopping Center, a retail shopping
     center located in Stockbridge, Georgia, southeast of Atlanta, owned by Fund
     III - IV Joint Venture, (v) Reciprocal Group Building located in Richmond,
     Virginia, owned by Fund III - IV Joint Venture, and (vi) the Holcomb Bridge
     Road Property, an office/retail center in Roswell, Georgia, owned by Fund
     II-III-VI-VII Joint Venture. All of the foregoing properties were acquired
     on an all cash basis.

                                       7
<PAGE>

     (b) Basis of Presentation

     The financial statements of the Partnership have been prepared in
     accordance with instructions to Form 10-Q and do not include all of the
     information and footnotes required by generally accepted accounting
     principles for complete financial statements. These quarterly statements
     have not been examined by independent accountants, but in the opinion of
     the General Partners, the statements for the unaudited interim periods
     presented include all adjustments, which are of a normal and recurring
     nature and necessary to present a fair presentation of the results for such
     periods. For further information, refer to the financial statements and
     footnotes included in the Partnership's Form 10-K for the year ended
     December 31, 2000.

2.   INVESTMENT IN JOINT VENTURES

     The Partnership owns interests in five properties through its investment in
     joint ventures. The Partnership does not have control over the operations
     of the joint ventures; however, it does exercise significant influence.
     Accordingly, investment in joint ventures is recorded on the equity method.
     For a description of the joint ventures and properties owned by the
     Partnership, please refer to the Partnership's Form 10-K for the year ended
     December 31, 2000.

     SUMMARY OF OPERATIONS

     The following information summarizes the operations of the unconsolidated
     joint ventures in which the Partnership had ownership interests as of
     September 30, 2001 and 2000, respectively.

<TABLE>
<CAPTION>
                                                                                               Partnership's Share of Net
                                       Total Revenues               Net (Loss) Income                 (Loss) Income
                                ----------------------------   ----------------------------   ------------------------------
                                     Three Months Ended              Three Months Ended              Three Months Ended
                                ----------------------------   ----------------------------   ------------------------------
                                September 30,  September 30,   September 30,  September 30,   September 30,    September 30,
                                    2001           2000            2001           2000           2001              2000
                                ------------   -------------   -------------  -------------   ------------    -------------
     <S>                        <C>            <C>             <C>            <C>             <C>             <C>
     Fund II - III Boeing       $    368,814   $     367,536   $     (88,199) $    (125,292)  $    (34,133)   $     (40,633)
     Fund II - III Brookwood          79,533          68,855          35,744         47,063         13,458           17,719
     Fund II-III-VI-VII Joint
       Venture                       215,407         214,052          84,664         52,629          7,672            4,769
     Fund III - IV Joint
       Venture                       479,025         320,912         243,784        119,227        139,473           68,212
                                ------------   -------------   -------------  -------------   ------------    -------------
                                $  1,142,779   $     971,355   $     275,993  $      93,627   $    126,470    $      50,067
                                ============   =============   =============  =============   ============    =============

<CAPTION>
                                                                                               Partnership's Share of Net
                                       Total Revenues                Net (Loss) Income                 (Loss) Income
                                ----------------------------   ----------------------------   ------------------------------
                                     Nine Months Ended               Nine Months Ended               Nine Months Ended
                                ----------------------------   ----------------------------   ------------------------------
                                September 30,  September 30,   September 30,  September 30,   September 30,    September 30,
                                    2001           2000            2001           2000           2001              2000
                                ------------   -------------   -------------  -------------   ------------    -------------
     <S>                        <C>            <C>             <C>            <C>             <C>             <C>
     Fund II - III Boeing       $  1,109,273   $   1,101,248   $    (126,659) $    (238,911)  $    (49,017)   $     (84,604)
     Fund II - III Brookwood         214,013         214,599         108,832        109,126         40,975           41,086
     Fund II-III-VI-VII Joint
       Venture                       631,698         658,907         175,834        191,051         15,935           17,314
     Fund III - IV Joint
       Venture                     1,384,249       1,085,376         783,410        462,099        448,202          264,375
                                ------------   -------------   -------------  -------------   ------------    -------------
                                $  3,339,233   $   3,060,130   $     941,417  $     523,365   $    456,095    $     238,171
                                ============   =============   =============  =============   ============    =============
</TABLE>

                                       8
<PAGE>

     SUMMARY OF OPERATIONS

     The following information summarizes the operations of the property, which
     is owned by one of the above joint ventures and is significant to the
     Partnership, for the three months and nine months ended September 30, 2001
     and September 30, 2000, respectively. Audited financial statements of this
     property are included in the Partnership's Annual Report on Form 10-K filed
     for the year ended December 31, 2000:

<TABLE>
<CAPTION>
                                                                                                Partnership's Share of Net
                                       Total Revenues                    Net Loss                          Loss
                                -------------------------------------------------------------------------------------------
                                     Three Months Ended              Three Months Ended              Three Months Ended
                                -------------------------------------------------------------------------------------------
                                September 30,  September 30,   September 30,  September 30,   September 30,    September 30,
                                    2001           2000            2001           2000           2001              2000
                                -------------------------------------------------------------------------------------------
     <S>                        <C>            <C>             <C>            <C>             <C>             <C>
     Boeing at the
      Atrium                    $    368,814   $     367,536   $     (88,199) $    (125,292)  $    (34,133)   $     (40,633)
                                ===========================================================================================

<CAPTION>
                                                                                                Partnership's Share of Net
                                       Total Revenues                    Net Loss                          Loss
                                -------------------------------------------------------------------------------------------
                                      Nine Months Ended              Nine Months Ended              Three Months Ended
                                -------------------------------------------------------------------------------------------
                                September 30,  September 30,   September 30,  September 30,   September 30,    September 30,
                                    2001           2000            2001           2000           2001              2000
                                -------------------------------------------------------------------------------------------
     <S>                        <C>            <C>             <C>            <C>             <C>             <C>
     Boeing at the
      Atrium                    $  1,109,273   $   1,101,248   $    (126,659) $    (238,911)  $    (49,017)   $     (84,604)
                                ===========================================================================================
</TABLE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     The following discussion and analysis should be read in conjunction with
     the accompanying financial statements of the Partnership and notes thereto.
     This Report contains forward-looking statements, with the meaning of
     Section 27A of the Securities Act of 1993 and 21E of the Securities
     Exchange Act of 1934, including discussion and analysis of the financial
     condition of the Partnership, anticipated capital expenditures required to
     complete certain projects and certain other matters. Readers of this Report
     should be aware that there are various factors that could cause actual
     results to differ materially from any forward-looking statement made in the
     Report, which include construction costs which may exceed estimates,
     construction delays, lease-up risks, inability to obtain new tenants upon
     the expiration of existing leases, and the potential need to fund tenant
     improvements or other capital expenditures out of operating cash flow.

1.   RESULTS OF OPERATIONS AND CHANGES IN FINANCIAL CONDITIONS

     General

     As of September 30, 2001, the properties owned by the Partnership were
     86.2% occupied as compared to 82.5% as of September 30, 2000. Occupancy
     increased due to leasing of the Reciprocal Group Building in 2001.

     Gross revenues of the Partnership were $687,833 for the nine months ended
     September 30, 2001, as compared to $674,343 for the nine months ended
     September 30, 2000. The increase in gross revenues is primarily due to an
     increase in equity in income of joint ventures resulting from leasing the
     Reciprocal Group Building in 2001, decreased depreciation and the increase
     in common area maintenance reimbursements billed in 2001 to the tenant at
     Boeing at the Atrium and decreased depreciation at the Holcomb Bridge Road
     property, offset by decreased rent and bad debt at the

                                       9
<PAGE>

     Holcomb Bridge Road property and decreased rental income from Greenville
     Center, resulting from IBM's (anchor tenant) lease expiring February 28,
     2001. The management team is currently working on leasing this space. In
     contrast, the net income from Fund II-III-VI-VII Joint Venture increased
     for the three months ended September 30, 2001, as compared to the same
     period in 2000 due to decreased depreciation. Expenses of the Partnership
     decreased to $111,149 for the three months ended September 30, 2001, from
     $125,808 for the three months ended September 30, 2000, primarily due to
     decreased operating costs, management and leasing expenses as a result of
     IBM's lease expiring. Expenses of the Partnership increased to $382,031 for
     the nine months ended September 30, 2001, from $367,144 for the nine months
     ended September 30, 2000. The increase in expenses is primarily due to
     increased depreciation and operating costs at Greenville Center, resulting
     from roof repairs, additional advertising and other repair expenses to
     prepare the property for increased occupancy, offset by decreased
     management fee and leasing commissions. As a result, net income decreased
     to $305,802 from $307,199 for the nine months ended September 30, 2001 and
     2000, respectively.

     Net cash provided by (used in) operating activities decreased from $198,838
     in 2000 to $(37,257) in 2001, due to decreased rental income at Greenville
     Center resulting from the IBM lease expiration February 28, 2001. Cash
     flows provided by investing activities and used in financing activities
     decreased for the nine months ended September 30, 2001, as compared to the
     nine months ended September 30, 2000, as a result of investing in tenant
     improvements for the Reciprocal Group Building and reserving operating cash
     flows to fund such future improvements. The Partnership reserved
     distributions for the second, third, and fourth quarters of 2000. Since,
     the Partnership paid distributions in the first and second quarters of 2001
     and funded tenant improvements at the Reciprocal Group Building, cash and
     cash equivalents decreased in 2001 from 2000.

     The Partnership declared cash distributions to the Limited Partners holding
     Class A Units of $0.05 per Class A Unit for the nine months ended September
     30, 2001, as compared to distributions of $0.02 per Class A Unit for the
     nine months ended September 30, 2000. There were no cash distributions to
     the Limited Partners holding Class A Units for the second and third
     quarters of 2000. No cash distributions were made to Limited Partners
     holding Class B Units or the General Partners for the nine months ended
     September 30, 2001 and 2000. Substantially all cash generated from the
     operations of properties owned by the Partnership was reserved in 2000 to
     fund the required tenant improvements and refurbishments at the Reciprocal
     Group Building.

     The Partnership's distributions payable through the third quarter of 2001
     have been paid from net cash from operations and from distributions
     received from its investments in joint ventures. The Partnership expects to
     continue to meets its short-term liquidity requirements generally through
     net cash provided by operations which the Partnership believes will
     continue to be adequate to meet both operating requirements and
     distributions to limited partners.

     General Electric elected not to renew its lease at the Reciprocal Group
     Building, which expired March 31, 2000. Management leased this building to
     the Reciprocal Group on October 4, 2000 for a term of eight years, with
     rent commencing in February 2001. The total cost of refurbishments, tenant
     improvements and building maintenance is $1,407,002. These costs have been
     funded out of cash from operations of the Partnership and Wells Real Estate
     Fund IV, L.P., which caused a substantial reduction in distributions paid
     to the Partnership from Fund III-IV Joint Venture and, consequently,
     distributions payable from the Partnership to the Limited Partners in the
     year 2000. The Partnership has funded $836,087 of these reimbursements.

     The Partnership previously made the decision to begin the process of
     selling its properties. As the properties are sold, net sales proceeds will
     be distributed to limited partners in accordance with the Partnership
     Agreement. Management estimates that the fair market value of each of the
     properties exceeds the carrying value of the corresponding real estate
     assets; consequently, no impairment losses

                                       10
<PAGE>

     have been recorded. In the event that the net sales proceeds are less than
     the carrying value of the properties sold, the Partnership would recognize
     losses on the sales. Upon finalizing negotiations with purchasers,
     management will reclassify the real estate assets of such properties as
     "Held for Sale" and, pursuant to FAS No. 121, discontinue depreciation at
     that point. Management is not contractually or financially obligated to
     sell any of its properties, and it is management's current intent to fully
     realize the Partnership's investment in real estate. The success of the
     Partnership's future operations and the ability to realize the investment
     in its assets will be dependent on the Partnership's ability to maintain
     rental rates, occupancy and an appropriate level of operating expenses in
     future years. Management believes that the steps that it is taking will
     enable the Partnership to realize its investment in its assets.

                                       11
<PAGE>

                          PART II - OTHER INFORMATION

Item 6(b.) No reports on Form 8-K were filed during the third quarter of 2001.

                                  SIGNATURES

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


                                   WELLS REAL ESTATE FUND III, L.P.
                                   (Registrant)
Dated: November 9, 2001      By:   /s/ Leo F. Wells, III
                                   -------------------------------------------
                                   Leo F. Wells, III, as Individual
                                   General Partner and as President and
                                   Chief Financial Officer of Wells Capital,
                                   Inc., the General Partner of Wells
                                   Partners, L.P.

                                       12