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



                      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 March 31, 2001


[ ] 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 0-10273


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



         California                                              94-2653686
(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
                           (Issuer'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 past 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___


                         PART I - FINANCIAL INFORMATION


ITEM 1.     FINANCIAL STATEMENTS

a)

                       CONSOLIDATED CAPITAL PROPERTIES III

                           CONSOLIDATED BALANCE SHEET
                                   (Unaudited)
                          (in thousands, except unit data)

                                 March 31, 2001


<TABLE>
<CAPTION>

Assets
<S>                                                          <C>             <C>
   Cash and cash equivalents                                                 $  383
   Receivables and deposits                                                      96
   Restricted escrows                                                            35
   Other assets                                                                 218
   Investment properties:
      Land                                                   $   507
      Buildings and related personal property                 11,082
                                                              11,589
      Less accumulated depreciation                           (8,102)         3,487
                                                                            $ 4,219
Liabilities and Partners' (Deficit) Capital
Liabilities
   Accounts payable                                                         $    83
   Tenant security deposit liabilities                                           96
   Accrued property taxes                                                        44
   Other liabilities                                                            186
   Mortgage notes payable                                                     5,319

Partners' (Deficit) Capital
   General partners                                           $(1,850)
   Limited partners (158,582 units issued and
      outstanding)                                                341        (1,509)
                                                                            $ 4,219

            See Accompanying Notes to Consolidated Financial Statements
</TABLE>


<PAGE>




b)

                       CONSOLIDATED CAPITAL PROPERTIES III

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                        (in thousands, except per unit data)


                                                      Three Months Ended
                                                           March 31,
                                                      2001          2000
Revenues:
   Rental income                                      $  739        $ 733
   Other income                                           53           50
      Total revenues                                     792          783

Expenses:
   Operating                                             358          370
   General and administrative                            113           65
   Depreciation                                          145          137
   Interest                                              107          115
   Property taxes                                         48           51
      Total expenses                                     771          738

Net income                                            $   21        $  45

Net income allocated to general partners (4%)         $    1        $   2
Net income allocated to limited partners (96%)            20           43
                                                      $   21        $  45

Net income per limited partnership unit               $ 0.13       $ 0.27

Distribution per limited partnership unit             $ 2.01       $ 4.10


            See Accompanying Notes to Consolidated Financial Statements

<PAGE>


c)

                       CONSOLIDATED CAPITAL PROPERTIES III

          CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
                                   (Unaudited)
                          (in thousands, except unit data)


<TABLE>
<CAPTION>

                                      Limited
                                     Partnership     General      Limited
                                        Units        Partners    Partners      Total


<S>                                    <C>             <C>       <C>          <C>
Original capital contributions         158,945       $     1      $ 79,473     $ 79,474

Partners' (deficit) capital
   at December 31, 2000                158,582       $(1,838)     $    639     $ (1,199)

Distributions to partners                  --            (13)         (318)        (331)

Net income for the three months
   ended March 31, 2001                    --              1            20           21

Partners' (deficit) capital
   at March 31, 2001                   158,582       $(1,850)     $    341     $ (1,509)


            See Accompanying Notes to Consolidated Financial Statements
</TABLE>

<PAGE>


d)
                       CONSOLIDATED CAPITAL PROPERTIES III

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                   (in thousands)

<TABLE>
<CAPTION>

                                                                 Three Months Ended
                                                                       March 31,
                                                                  2001         2000
Cash flows from operating activities:
<S>                                                               <C>          <C>
  Net income                                                      $  21         $  45
  Adjustments to reconcile net income to net cash
   provided by operating activities:
   Depreciation                                                      145          137
   Amortization of loan costs                                          8            8
   Change in accounts:
      Receivables and deposits                                       (24)          13
      Other assets                                                   (26)          (3)
      Accounts payable                                                --          (48)
      Tenant security deposit liabilities                             (3)           1
      Accrued property taxes                                          44           41
      Other liabilities                                               14          (75)

       Net cash provided by operating activities                     179          119

Cash flows from investing activities:
  Property improvements and replacements                            (114)        (193)
  Net withdrawals from (deposits to) restricted escrows              110          (19)
       Net cash used in investing activities                          (4)        (212)

Cash flows from financing activities:
  Payment of loan costs                                               --          (10)
  Payments on mortgage note payable                                   (6)          (6)
  Distributions to partners                                         (331)        (650)

       Net cash used in financing activities                        (337)        (666)

Net decrease in cash and cash equivalents                           (162)        (759)

Cash and cash equivalents at beginning of period                     545        1,460

Cash and cash equivalents at end of period                        $  383       $  701

Supplemental disclosure of cash flow information:
  Cash paid for interest                                          $   99       $   99

</TABLE>

            See Accompanying Notes to Consolidated Financial Statements

<PAGE>



e)

                       CONSOLIDATED CAPITAL PROPERTIES III

                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


Note A - Basis of Presentation

The accompanying  unaudited  consolidated  financial  statements of Consolidated
Capital Properties III (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") which is wholly-owned by Apartment  Investment and Management  Company
("AIMCO"),  all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included.  Operating results for the
three month period ended March 31, 2001, are not  necessarily  indicative of the
results that may be expected for the fiscal year ending  December 31, 2001.  For
further  information,   refer  to  the  consolidated  financial  statements  and
footnotes thereto included in the Partnership's Annual Report on Form 10-KSB for
the fiscal year ended December 31, 2000.

Consolidation

The Partnership's  financial  statements  include the accounts of ConCap Village
Green Associates,  Ltd. The Partnership owns a 99% interest in this partnership,
and it has the ability to control the major operating and financial  policies of
this partnership. All inter-partnership transactions have been eliminated.

Segment Reporting: Statement of Financial Accounting Standards ("SFAS") No. 131,
"Disclosure about Segments of an Enterprise and Related Information" established
standards for the way that public business  enterprises report information about
operating  segments  in annual  financial  statements  and  requires  that those
enterprises  report selected  information  about  operating  segments in interim
financial reports.  It also establishes  standards for related disclosures about
products and services, geographic areas, and major customers. As defined in SFAS
No. 131, the Partnership has only one reportable  segment.  The Managing General
Partner  believes  that  segment-based  disclosures  will not  result  in a more
meaningful presentation than the financial statements as currently presented.

Note B - Transactions with Affiliated Parties

The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all Partnership  activities.
The  Limited  Partnership  Agreement  ("Partnership   Agreement")  provides  for
payments to affiliates of the General Partner for property  management  services
based on a percentage of revenue;  for a partnership  management fee equal to 9%
of the  total  distributions  made to  limited  partners  from  cash  flow  from
operations; and for reimbursements of certain expenses incurred by affiliates of
the General Partner on behalf of the Partnership.

The following  amounts were paid or accrued to the General Partner or affiliates
during the three month periods ended March 31, 2001 and 2000, respectively:

                                                                  2001      2000
                                                                  (in thousands)

 Property management fees (included in operating expenses)        $ 40      $ 39

 Reimbursement for services of affiliates (included in
  investment properties and general and
  administrative expenses)                                         105        29

 Partnership management fees (included in general and
   administrative expenses)                                         31        --

Affiliates of the General  Partner are entitled to receive 5% of gross  receipts
from  all  of  the  Registrant's  residential  properties  as  compensation  for
providing property management  services.  The Registrant paid to such affiliates
approximately  $40,000 and $39,000 for the three months ended March 31, 2001 and
2000, respectively.

An  affiliate  of the General  Partner  received  reimbursement  of  accountable
administrative  expenses amounting to approximately $105,000 and $29,000 for the
three  months  ended  March  31,  2001  and  2000,  respectively.  Included  are
approximately  $50,000 and $10,000 of construction  oversight charges during the
three months ended March 31, 2001 and 2000, respectively. At March 31, 2001, the
Partnership has accrued  approximately  $11,000 of these reimbursements which is
included in other liabilities.

The Partnership  Agreement  provides for a special management fee equal to 9% of
the  total  distributions  made to the  limited  partners  from  cash  flow from
operations to be paid to the General  Partner for  executive and  administrative
management  services.  During the three  months  ended March 31,  2001, a fee of
approximately  $31,000 was paid to the General  Partner.  No management  fee was
paid to the General Partner during the corresponding period in 2000.

In addition to its indirect  ownership of the general  partner  interests in the
Partnership,  AIMCO and its affiliates  currently own 78,319 limited partnership
units ("Units") in the Partnership representing 49.39% 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 49.39% 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 its
affiliation with the General Partner.


<PAGE>



Note C - Distributions

During the three  months ended March 31, 2001,  distributions  of  approximately
$331,000  (approximately  $318,000 to the limited  partners or $2.01 per limited
partnership  unit)  were  declared  and paid from  operations.  During the three
months ended March 31, 2000, a distribution of approximately $650,000 ($4.10 per
limited  partnership  unit)  was paid to the  limited  partners  from  financing
proceeds from West Chase  Apartments in December  1999.  Subsequent to March 31,
2001 a distribution of  approximately  $153,000  (approximately  $147,000 to the
limited  partners  or  $0.93  per  limited   partnership  unit)  was  paid  from
operations.

Note D - 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,  among other things,  the  acquisition of interests in
certain general partner entities by Insignia Financial Group, Inc.  ("Insignia")
and entities which were, at one time, affiliates of Insignia; past tender offers
by the Insignia affiliates to acquire limited  partnership units;  management of
the  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  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 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 and an appeal was taken  from the order on  October  5,  2000.  On
December 4, 2000, the Court  appointed the law firm of Lieff Cabraser  Heimann &
Bernstein  LLP as new  lead  counsel  for  plaintiffs  and the  putative  class.
Plaintiffs  filed a third  amended  complaint on January 19,  2001.  On March 2,
2001,  the  General  Partner  and its  affiliates  filed a demurrer to the third
amended  complaint.  The demurrer is scheduled to be heard on May 14, 2001.  The
Court has also  scheduled  a hearing  on a motion  for class  certification  for
August 27, 2001.  Plaintiffs must file their motion for class  certification  no
later than June 15, 2001.  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>



Note E - Casualty

On January 31,  2001,  a fire  occurred at West Chase  Apartments  resulting  in
damage to two units.  Negotiations concerning this casualty are ongoing with the
insurance  carrier.  No insurance  proceeds  have been  received as of March 31,
2001, and thus the financial  statement impact cannot be practicably  determined
at this time.


<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 disclosure
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 discussions 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 consist of three apartment  complexes.
The following table sets forth the average  occupancy of the properties for each
of the three month periods ended March 31, 2001 and 2000:

                                                   Average Occupancy
      Property                                      2001       2000

      Ventura Landing Apartments                    93%        93%
        Orlando, Florida

      Village Green Apartments                      94%        95%
        Altamonte Springs, Florida

      West Chase Apartments                         89%        92%
        Lexington, Kentucky

The  General  Partner  attributes  the  decrease  in  occupancy  at  West  Chase
Apartments  to a fire which  resulted  in twelve  units  being  unleaseable  and
also to increased evictions.

Results of Operations

The  Partnership's  net income for the three  months  ended  March 31,  2001 was
approximately  $21,000 as compared to approximately $45,000 for the three months
ended March 31, 2000. The decrease in net income is primarily attributable to an
increase in total  expenses which was partially  offset by a slight  increase in
total income.

Total  expenses   increased   primarily  due  to  an  increase  in  general  and
administrative expenses. General and administrative expenses increased primarily
due to the asset  management  fee charged as a result of the  distribution  from
operations  and to an increase in the costs of services  provided by the General
Partner  which  is  reimbursable  pursuant  to  the  Partnership  Agreement.  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 also included in general and administrative expenses.

Total revenues increased  primarily due to an increase in rental income.  Rental
income increased  primarily due to increased  average rental rates at all of the
Partnership's residential properties which was partially offset by a decrease in
occupancy at Village Green and West Chase.

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

As of March  31,  2001,  the  Partnership  held  cash and  cash  equivalents  of
approximately  $383,000  compared to  approximately  $701,000 at March 31, 2000.
Cash and cash  equivalents  decreased  approximately  $162,000 from December 31,
2000, the Partnership's  year end. This decrease is due to approximately  $4,000
of cash used in investing activities and approximately  $337,000 of cash used in
financing activities partially offset by approximately $179,000 of cash provided
by operating activities. Cash used in investing activities consisted of property
improvements  and  replacements  offset by net withdrawals  from escrow accounts
maintained by the mortgage lenders.  Cash used in financing activities consisted
of  distributions  to the  partners,  and, to a lesser  extent,  payments on the
mortgage note payable encumbering West Chase Apartments.  The Registrant invests
its working capital reserves in interest bearing 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.

Village Green

During  the  three  months  ended  March 31,  2001,  the  Partnership  completed
approximately  $22,000  of capital  improvements  at  Village  Green  Apartments
consisting primarily of carpet and vinyl replacements, plumbing enhancements and
appliance  replacements.  These  improvements  were funded from cash provided by
operations and  replacement  reserves.  The  Partnership had budgeted but is not
limited  to  approximately  $45,000  for  the  year  ended  December  31,  2001,
consisting  primarily of office  equipment and carpet and cabinet  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.

West Chase

During  the  three  months  ended  March 31,  2001,  the  Partnership  completed
approximately   $61,000  of  capital   improvements  at  West  Chase  Apartments
consisting primarily of carpet and vinyl replacement,  structural  improvements,
and appliance replacements. These improvements were funded from cash provided by
operations and  replacement  reserves.  The  Partnership has budgeted but is not
limited  to  approximately  $33,000  for the  year  ending  December  31,  2001,
consisting primarily of interior and exterior building 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.  The  property  has spent more than its  budget  during the first
quarter  primarily due to repairs  related to a fire in January 2001 (see Note E
to the financial statements).

Ventura Landing

During  the  three  months  ended  March 31,  2001,  the  Partnership  completed
approximately  $31,000 of capital  improvements  at Ventura  Landing  Apartments
consisting  primarily of flooring  replacements.  These improvements were funded
from cash provided by operations and replacement  reserves.  The Partnership has
budgeted  but is not  limited  to  approximately  $51,000  for the  year  ending
December 31,  2001,  consisting  primarily  of interior  and  exterior  building
improvements.  Additional  improvements may be considered and will depend on the
physical  condition  of  the  property  as  well  as  replacement  reserves  and
anticipated cash flow generated by the property.


<PAGE>



The  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 at least in the short term.

The  Registrant's  current assets are thought to be sufficient for any near-term
needs  (exclusive  of capital  improvements)  of the  Registrant.  The  mortgage
indebtedness  at Village  Green and Ventura  Landing  Apartments  of  $4,200,000
requires interest only payments with the principal balance due in November 2003.
The mortgage  indebtedness at West Chase Apartments of approximately  $1,119,000
requires  principal  and  interest  payments  due on the first day of each month
until the loan matures on December 1, 2019. The General  Partner will attempt to
refinance the  indebtedness  at Village Green and Ventura  Landing  indebtedness
and/or sell the  properties  prior to their  maturity  date.  If the  properties
cannot be refinanced or sold for a sufficient  amount,  the  Registrant may risk
losing such properties through foreclosure.

During the three  months ended March 31, 2001,  distributions  of  approximately
$331,000  (approximately  $318,000 to the limited  partners or $2.01 per limited
partnership unit) was declared and paid from operations. During the three months
ended March 31,  2000,  a  distribution  of  approximately  $650,000  ($4.10 per
limited  partnership  unit)  was paid to the  limited  partners  from  financing
proceeds from West Chase  Apartments in December  1999.  Subsequent to March 31,
2001, a distribution of approximately  $153,000  (approximately  $147,000 to the
limited  partners  or  $0.93  per  limited   partnership  unit)  was  paid  from
operations.  Future  cash  distributions  will  depend on the levels of net cash
generated from operations,  the availability of cash reserves, and the timing of
debt  maturities,   property  sales,  and/or  refinancings.   The  Partnership's
distribution  policy is reviewed on a quarterly basis. There can be no assurance
that the  Partnership  will  generate  sufficient  funds from  operations  after
required  capital  expenditures  to permit any additional  distributions  to its
partners during the remainder of 2001 or subsequent periods.

In addition to its indirect  ownership of the general  partner  interests in the
Partnership,  AIMCO and its affiliates  currently own 78,319 limited partnership
units ("Units") in the Partnership representing 49.39% 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 49.39% 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 its
affiliation with the General Partner.


<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,  among other things,  the  acquisition of interests in
certain general partner entities by Insignia Financial Group, Inc.  ("Insignia")
and entities which were, at one time, affiliates of Insignia; past tender offers
by the Insignia affiliates to acquire limited  partnership units;  management of
the  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  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 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 and an appeal was taken  from the order on  October  5,  2000.  On
December 4, 2000, the Court  appointed the law firm of Lieff Cabraser  Heimann &
Bernstein  LLP as new  lead  counsel  for  plaintiffs  and the  putative  class.
Plaintiffs  filed a third  amended  complaint on January 19,  2001.  On March 2,
2001,  the  General  Partner  and its  affiliates  filed a demurrer to the third
amended  complaint.  The demurrer is scheduled to be heard on May 14, 2001.  The
Court has also  scheduled  a hearing  on a motion  for class  certification  for
August 27, 2001.  Plaintiffs must file their motion for class  certification  no
later than June 15, 2001.  The General  Partner does not  anticipate  that costs
associated  with  this  case  will  be  material  to the  Partnership's  overall
operations.


<PAGE>



ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            a)    Exhibits:

                  None.

            b)    Reports on Form 8-K:

                  None filed during the quarter ended March 31, 2001.


<PAGE>


                                   SIGNATURES



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



                                    CONSOLIDATED CAPITAL PROPERTIES III


                                    By:   CONCAP EQUITIES, INC.
                                          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: May 7, 2001