UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549



Form 10-QSB



(Mark One)

[X]

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended September 30, 2007





[ ]

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT





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 ___



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes __ No  X_



PART I  FINANCIAL INFORMATION





ITEM 1.

FINANCIAL STATEMENTS







CONSOLIDATED CAPITAL PROPERTIES III



CONSOLIDATED BALANCE SHEET

(Unaudited)

(in thousands, except unit data)



September 30, 2007



|                                           |          |        
|------------------------------------------ | -------- | -------
|Assets                                     |          |        
|Cash and cash equivalents                  |          | $   583
|Receivables and deposits                   |          | 84     
|Other assets                               |          | 260    
|Investment property:                       |          |        
|Land                                       | $   125  |        
|Buildings and related personal property    | 4,893    |        
|                                           | 5,018    |        
|Less accumulated depreciation              | (3,603)  | 1,415  
|                                           |          | $2,342 
|Liabilities and Partners' Deficit          |          |        
|Liabilities                                |          |        
|Accounts payable                           |          | $    54
|Tenant security deposit liabilities        |          | 50     
|Accrued property taxes                     |          | 78     
|Other liabilities                          |          | 168    
|Mortgage notes payable (Note C)            |          | 6,682  
|                                           |          |        
|Partners' Deficit                          |          |        
|General partners                           | $(1,555) |        
|Limited partners (158,572 units issued and |          |        
|outstanding)                               | (3,135)  | (4,690)
|                                           |          | $2,342 



See Accompanying Notes to Consolidated Financial Statements

















CONSOLIDATED CAPITAL PROPERTIES III



CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per unit data)





|                                  |                     |                     |          |         
|--------------------------------- | ------------------- | ------------------- | -------- | --------
|                                  | Three Months        | Nine Months        
|                                  | Ended September 30, | Ended September 30,
|                                  | 2007                | 2006                | 2007     | 2006    
|                                  |                     |                     |          |         
|Revenues:                         |                     |                     |          |         
|Rental income                     | $   343             | $   339             | $ 1,028  | $   987 
|Other income                      | 37                  | 35                  | 103      | 126     
|Total revenues                    | 380                 | 374                 | 1,131    | 1,113   
|                                  |                     |                     |          |         
|Expenses:                         |                     |                     |          |         
|Operating                         | 242                 | 184                 | 634      | 545     
|General and administrative        | 51                  | 38                  | 156      | 150     
|Depreciation                      | 60                  | 78                  | 178      | 224     
|Interest                          | 90                  | 61                  | 235      | 213     
|Property taxes                    | 26                  | 21                  | 78       | 62      
|Total expenses                    | 469                 | 382                 | 1,281    | 1,194   
|                                  |                     |                     |          |         
|Loss from continuing operations   | (89)                | (8)                 | (150)    | (81)    
|Loss from discontinued operations |                     |                     |          |         
|(Notes A and D)                   | --                  | --                  | --       | (948)   
|Gain from sale of discontinued    |                     |                     |          |         
|operations (Note D)               | --                  | --                  | --       | 10,003  
|Net (loss) income                 | $(89)               | $(8)                | $(150)   | $8,974  
|Net (loss) income allocated to    |                     |                     |          |         
|general partners (4%)             | $    (4)            | $    --             | $    (6) | $   359 
|Net (loss) income allocated to    |                     |                     |          |         
|limited partners (96%)            | (85)                | (8)                 | (144)    | 8,615   
|                                  | $(89)               | $(8)                | $(150)   | $8,974  
|Per limited partnership unit:     |                     |                     |          |         
|Loss from continuing operations   | $ (0.54)            | $ (0.05)            | $ (0.91) | $ (0.49)
|Loss from discontinued operations | --                  | --                  | --       | (5.74)  
|Gain from sale of discontinued    |                     |                     |          |         
|operations                        | --                  | --                  | --       | 60.56   
|Net (loss) income                 | $(0.54)             | $(0.05)             | $(0.91)  | $54.33  
|Distributions per limited         |                     |                     |          |         
|partnership unit                  | $15.04              | $2.27               | $15.04   | $34.55  



See Accompanying Notes to Consolidated Financial Statements













CONSOLIDATED CAPITAL PROPERTIES III



CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT

(Unaudited)

(in thousands, except unit data)







|                               |             |          |            |          
|------------------------------ | ----------- | -------- | ---------- | ---------
|                               | Limited     |          |            |          
|                               | Partnership | General  | Limited    |          
|                               | Units       | Partners | Partners   | Total    
|                               |             |          |            |          
|Original capital contributions | 158,945     | $1       | $79,473    | $79,474  
|                               |             |          |            |          
|Partners' deficit              |             |          |            |          
|at December 31, 2006           | 158,572     | $(1,535) | $    (606) | $ (2,141)
|                               |             |          |            |          
|Distributions to partners      | --          | (14)     | (2,385)    | (2,399)  
|                               |             |          |            |          
|Net loss for the nine months   |             |          |            |          
|ended September 30, 2007       | --          | (6)      | (144)      | (150)    
|                               |             |          |            |          
|Partners' deficit              |             |          |            |          
|at September 30, 2007          | 158,572     | $(1,555) | $(3,135)   | $(4,690) 



See Accompanying Notes to Consolidated Financial Statements











CONSOLIDATED CAPITAL PROPERTIES III



CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)



|                                                       |                   |         
|------------------------------------------------------ | ----------------- | --------
|                                                       | Nine Months Ended
|                                                       | September 30,    
|                                                       | 2007              | 2006    
|Cash flows from operating activities:                  |                   |         
|Net (loss) income                                      | $  (150)          | $ 8,974 
|Adjustments to reconcile net (loss) income to net cash |                   |         
|provided by (used in) operating activities:            |                   |         
|Gain from sale of discontinued operations              | --                | (10,003)
|Depreciation                                           | 178               | 273     
|Amortization of loan costs                             | 9                 | 12      
|Loss on early extinguishment of debt                   | --                | 960     
|Change in accounts:                                    |                   |         
|Receivables and deposits                               | (31)              | 35      
|Other assets                                           | (28)              | 3       
|Accounts payable                                       | (21)              | (23)    
|Tenant security deposit liabilities                    | 10                | (28)    
|Due to affiliates                                      | (15)              | (362)   
|Accrued property taxes                                 | 78                | 62      
|Other liabilities                                      | 23                | (49)    
|                                                       |                   |         
|Net cash provided by (used in) operating activities    | 53                | (146)   
|                                                       |                   |         
|Cash flows from investing activities:                  |                   |         
|Property improvements and replacements                 | (234)             | (394)   
|Net proceeds from sale of discontinued operations      | --                | 10,578  
|Net cash (used in) provided by investing activities    | (234)             | 10,184  
|                                                       |                   |         
|Cash flows from financing activities:                  |                   |         
|Payments on mortgage notes payable                     | (89)              | (114)   
|Repayment of mortgage note payable                     | --                | (3,717) 
|Proceeds from mortgage note payable                    | 3,700             | --      
|Advances from affiliate                                | 197               | 18      
|Repayment of advances from affiliate                   | (559)             | (785)   
|Loan costs paid                                        | (113)             | --      
|Distributions to partners                              | (2,399)           | (5,479) 
|                                                       |                   |         
|Net cash provided by (used in) financing activities    | 737               | (10,077)
|                                                       |                   |         
|Net increase (decrease) in cash and cash equivalents   | 556               | (39)    
|                                                       |                   |         
|Cash and cash equivalents at beginning of period       | 27                | 89      
|Cash and cash equivalents at end of period             | $583              | $50     
|                                                       |                   |         
|Supplemental disclosure of cash flow information:      |                   |         
|Cash paid for interest                                 | $212              | $375    
|Supplemental disclosure of non-cash activity:          |                   |         
|Property improvements and replacements included in     |                   |         
|accounts payable                                       | $26               | $13     



At December 31, 2006, approximately $83,000 of property improvements and replacements were included in accounts payable, and are included in property improvements and replacements for the nine months ended September 30, 2007.



See Accompanying Notes to Consolidated Financial Statements











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 the general partner of the Partnership, 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, 2007 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2007. 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, 2006. The General Partner is wholly-owned by Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust.



In accordance with Statement of Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the accompanying consolidated statement of operations for the nine months ended September 30, 2006 reflects the operations of Ventura Landing Apartments as loss from discontinued operations due to its sale on March 31, 2006 (see Note D).



Recent Accounting Pronouncements



In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. SFAS No. 157 applies whenever other standards require assets or liabilities to be measured at fair value and does not expand the use of fair value in any new circumstances. SFAS No. 157 establishes a hierarchy that prioritizes the information used in developing fair value estimates. The hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data, such as the reporting entitys own data. SFAS No. 157 requires fair value measurements to be disclosed by level within the fair value hierarchy. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Partnershipdoes not anticipate that the adoption of SFAS No. 157 will have a material effect on the Partnerships consolidated financial statements.



In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Partnership has not yet determined whether it will elect the fair value option for any of its financial instruments.



In June 2007, the American Institute of Certified Public Accountants (the AICPA) issued Statement of Position No. 07-1, Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies ("SOP 07-1").  SOP 07-1 provides guidance for determining whether the accounting principles of the AICPA Audit and Accounting Guide Investment Companies are required to be applied to an entity by clarifying the definition of an investment company and, whether investment company accounting should be retained by a parent company upon consolidation of an investment company subsidiary, or by an investor in the application of the equity method of accounting to an investment company investee. SOP 07-1 applies to reporting periods beginning on or after December 15, 2007; however, the FASB has decided to issue an exposure draft that would indefinitely delay the effective date of SOP 07-1 until the FASB can reassess the provisions of SOP 07-1.  The Partnership is currently evaluating the impact, if any, that adoption of SOP 07-1 may have on its consolidated financial statements in the period of adoption.



Note B  Transactions with Affiliated Parties



The Partnership has no employees and depends on the General Partner and its affiliates for the management and administration of all Partnership activities.  The Partnership Agreement provides for payments to affiliates for services and reimbursement of certain expenses incurred by affiliates of the General Partner on behalf of the Partnership.



Affiliates of the General Partner receive 5% of gross receipts from the Partnership's properties as compensation for providing property management services. The Partnership paid to such affiliates approximately $56,000 and $73,000 for the nine months ended September 30, 2007 and 2006, respectively, which are included in operating expenses and loss from discontinued operations.



Affiliates of the General Partner charged the Partnership for reimbursement of accountable administrative expenses amounting to approximately $120,000 and $103,000 for the nine months ended September 30, 2007 and 2006, respectively.  These amounts are included in general and administrative expenses, investment property, and gain from sale of discontinued operations.  The portion of these reimbursements included in investment property and gain from sale of discontinued operations for the nine months ended September 30, 2007 and 2006 are construction management services provided by an affiliate of the General Partner of approximately $34,000 and $36,000, respectively.



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 nine months ended September 30, 2007 and 2006, no special management fees were paid as no distributions from cash flow from operations were made.



In connection with the second mortgage obtained on Village Green Apartments (see Note C), an affiliate of the General Partner earned and was paid a fee of approximately $37,000 during the nine months ended September 30, 2007.  This fee was capitalized and is included in other assets.



Pursuant to the Partnership Agreement, the General Partner is entitled to receive a commission equal to 3% of the aggregate disposition price of sold properties. The Partnership paid a commission of $108,000 to the General Partner related to the sale of Professional Plaza in 1999.  This amount is subordinate to the limited partners receiving their original capital contributions plus a cumulative preferred return of 6% per annum of their adjusted capital investment, as defined in the Partnership Agreement. If the limited partners have not received these returns when the Partnership terminates, the General Partner will be required to return this amount to the Partnership. It is not presently expected that the limited partners will receive these returns when the Partnership terminates. Accordingly, no such commission was paid to the General Partner related to the March 2006 sale of Ventura Landing Apartments.



During the nine months ended September 30, 2007 and 2006, an affiliate of the General Partner advanced the Partnership approximately $197,000 and $18,000, respectively, to fund payment of fees associated with the second mortgage obtained on Village Green Apartments, operations and capital improvements at Village Green Apartments. Interest was accrued at the prime rate plus 2% and interest expense was approximately $34,000 and $21,000 for the nine months ended September 30, 2007 and 2006, respectively. During the nine months ended September 30, 2007 and 2006, the Partnership repaid the outstanding advances and accrued interest of approximately $597,000 and $877,000, respectively. There were no advances or associated accrued interest payable to affiliates of the General Partner at September 30, 2007.



The Partnership insures its property up to certain limits through coverage provided by AIMCO which is generally self-insured for a portion of losses and liabilities related to workers compensation, property casualty, general liability and vehicle liability.  The Partnership insures its property above the AIMCO limits through insurance policies obtained by AIMCO from insurers unaffiliated with the General Partner. During the nine months ended September 30, 2007, the Partnership was charged by AIMCO and its affiliates approximately $36,000 for insurance coverage and fees associated with policy claims administration.  The Partnership was charged by AIMCO and its affiliates approximately $45,000 for insurance coverage and fees associated with policy claims administration during the year ended December 31, 2006.



Note C  Mortgage Financing



On August 31, 2007, the Partnership obtained a second mortgage in the principal amount of $3,700,000 on Village Green Apartments.  The second mortgage bears interest at 5.93% per annum and requires monthly payments of principal and interest of approximately $22,000 beginning on October 1, 2007 through the August 1, 2019 maturity date with a balloon payment of approximately $2,934,000 due at maturity. If no event of default exists at maturity, the maturity date will automatically be extended for one additional year, to August 1, 2020.  As a condition of the loan, the lender required AIMCO Properties, L.P., an affiliate of the General Partner, to guarantee the obligations and liabilities of the Partnership with respect to the new mortgage financing.  In connection with the new loan, loan costs of approximately $113,000 were capitalized and are included in other assets.



In connection with the new financing, the Partnership agreed to certain modifications of the existing mortgage loan encumbering Village Green Apartments. The modification includes an interest rate of 7.54% per annum, monthly payments of principal and interest of approximately $21,000 beginning October 1, 2007 through the maturity date of August 1, 2021, at which time a balloon payment of approximately $2,343,000 is due.  The previous terms were an interest rate of 7.54%, monthly payments of principal and interest of approximately $29,000 through the maturity date of August 1, 2021, at which date the mortgage was scheduled to be fully amortized.



Note D  Disposition of Investment Property



On March 31, 2006, the Partnership sold Ventura Landing Apartments to a third party for a gross sale price of approximately $11,862,000. The net proceeds realized by the Partnership were approximately $10,578,000 after payment of closing costs and a prepayment penalty owed by the Partnership. The Partnership used approximately $3,717,000 of the net proceeds to repay the mortgage encumbering the property. The Partnership realized a gain of approximately $10,003,000 as a result of the sale, which is included in gain from sale of discontinued operations. In addition, the Partnership recorded a loss on the early extinguishment of debt of approximately $960,000 as a result of the write-off of loan costs and a prepayment penalty, which is included in loss from discontinued operations for the nine months ended September 30, 2006. Also included in loss from discontinued operations for the nine months ended September 30, 2006 is approximately $12,000 of income, including revenues of approximately $380,000.













Note E  Contingencies



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. (the "Nuanes action") 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 purported to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) that 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 that 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 series of transactions which closed on October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties Trust, respectively, were merged into AIMCO. The plaintiffs sought monetary damages and equitable relief, including judicial dissolution of the Partnership. In addition, during the third quarter of 2001, a complaint captioned Heller v. Insignia Financial Group (the "Heller action") was filed against the same defendants that are named in the Nuanes action. On or about August 6, 2001, plaintiffs filed a first amended complaint. The Heller action was brought as a purported derivative action, and asserted claims for, among other things, breach of fiduciary duty, unfair competition, conversion, unjust enrichment, and judicial dissolution. On January 28, 2002, the trial court granted defendants motion to strike the complaint.  Plaintiffs took an appeal from this order.



On January 8, 2003, the parties filed a Stipulation of Settlement in proposed settlement of the Nuanes action and the Heller action. On June 13, 2003, the court granted final approval of the settlement and entered judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector ("Objector") filed an appeal (the Appeal) seeking to vacate and/or reverse the order approving the settlement and entering judgment thereto. On May 4, 2004, the Objector filed a second appeal challenging the courts use of a referee and its order requiring Objector to pay those fees.



On March 21, 2005, the Court of Appeals issued opinions in both pending appeals.  With regard to the settlement and judgment entered thereto, the Court of Appeals vacated the trial courts order and remanded to the trial court for further findings on the basis that the state of the record is insufficient to permit meaningful appellate review.  The matter was transferred back to the trial court on June 21, 2005.  With regard to the second appeal, the Court of Appeals reversed the order requiring the Objector to pay referee fees. With respect to the related Heller appeal, on July 28, 2005, the Court of Appeals reversed the trial courts order striking the first amended complaint.



On August 18, 2005, Objector and his counsel filed a motion to disqualify the trial court based on a peremptory challenge and filed a motion to disqualify for cause on October 17, 2005, both of which were ultimately denied and/or struck by the trial court.  On or about October 13, 2005 Objector filed a motion to intervene and on or about October 19, 2005 filed both a motion to take discovery relating to the adequacy of plaintiffs as derivative representatives and a motion to dissolve the anti-suit injunction in connection with settlement.  On November 14, 2005, Plaintiffs filed a Motion For Further Findings pursuant to the remand ordered by the Court of Appeals. Defendants joined in that motion.  On February 3, 2006, the Court held a hearing on the various matters pending before it and ordered additional briefing from the parties and Objector. On June 30, 2006, the trial court entered an order confirming its approval of the class action settlement and entering judgment thereto after the Court of Appeals had remanded the matter for further findings.  The substantive terms of the settlement agreement remain unchanged.  The trial court also entered supplemental orders on July 1, 2006, denying Objectors Motion to File a Complaint in Intervention, Objectors Motion for Leave of Discovery and Objectors Motion to Dissolve the Anti-Suit Injunction.  Notice of Entry of Judgment was served on July 10, 2006. On August 31, 2006, the Objector filed a Notice of Appeal to the Courts June 30, 2006 and July 1, 2006 orders. On December 14, 2006, Objector filed his Appellants Brief. The Partnership and its affiliates, as well as counsel for the Settlement Class, both filed Respondents Briefs on May 17, 2007.  Objector filed his response on August 3, 2007.  No hearing date has yet been scheduled.



The General Partner does not anticipate that any costs to the Partnership, whether legal or settlement costs, associated with these cases will be material to the Partnerships overall operations.



The Partnership is unaware of any other pending or outstanding litigation matters involving it or its investment property that are not of a routine nature arising in the ordinary course of business.



Environmental



Various Federal, state and local laws subject property owners or operators to liability for management, and the costs of removal or remediation, of certain hazardous substances present on a property. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release or presence of the hazardous substances. The presence of, or the failure to manage or remedy properly, hazardous substances may adversely affect occupancy at affected apartment communities and the ability to sell or finance affected properties. In addition to the costs associated with investigation and remediation actions brought by government agencies, and potential fines or penalties imposed by such agencies in connection therewith, the presence of hazardous substances on a property could result in claims by private plaintiffs for personal injury, disease, disability or other infirmities. Various laws also impose liability for the cost of removal, remediation or disposal of hazardous substances through a licensed disposal or treatment facility. Anyone who arranges for the disposal or treatment of hazardous substances is potentially liable under such laws. These laws often impose liability whether or not the person arranging for the disposal ever owned or operated the disposal facility. In connection with the ownership, operation and management of its property, the Partnership could potentially be liable for environmental liabilities or costs associated with its property.



Mold



The Partnership is aware of lawsuits against owners and managers of multifamily properties asserting claims of personal injury and property damage caused by the presence of mold, some of which have resulted in substantial monetary judgments or settlements.  The Partnership has only limited insurance coverage for property damage loss claims arising from the presence of mold and for personal injury claims related to mold exposure.  Affiliates of the General Partner have implemented policies, procedures, third-party audits and training and the General Partner believes that these measures will prevent or eliminate mold exposure and will minimize the effects that mold may have on residents.  To date, the Partnership has not incurred any material costs or liabilities relating to claims of mold exposure or to abate mold conditions.  Because the law regarding mold is unsettled and subject to change the General Partner can make no assurance that liabilities resulting from the presence of or exposure to mold will not have a material adverse effect on the Partnerships consolidated financial condition or results of operations.













ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION



The matters discussed in this report contain certain forward-looking statements, including, without limitation, statements regarding future financial performance and the effect of government regulations. Actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors including, without limitation: national and local economic conditions; the terms of governmental regulations that affect the Registrant and interpretations of those regulations; the competitive environment in which the Registrant operates; financing risks, including the risk that cash flows from operations may be insufficient to meet required payments of principal and interest; real estate risks, including variations of real estate values and the general economic climate in local markets and competition for tenants in such markets; litigation, including costs associated with prosecuting and defending claims and any adverse outcomes, and possible environmental liabilities. Readers should carefully review the Registrant's financial statements and the notes thereto, as well as the risk factors described in the documents the Registrant files from time to time with the Securities and Exchange Commission.



The Partnership's investment property consists of one apartment complex.  The following table sets forth the average occupancy of the property for each of the nine month periods ended September 30, 2007 and 2006:



|                           |                   |     
|-------------------------- | ----------------- | ----
|                           | Average Occupancy
|Property                   | 2007              | 2006
|                           |                   |     
|Village Green Apartments   | 94%               | 96% 
|Altamonte Springs, Florida |                   |     



The Partnerships financial results depend upon a number of factors including the ability to attract and maintain tenants at the investment property, interest rates on mortgage loans, costs incurred to operate the investment property, general economic conditions and weather. As part of the ongoing business plan of the Partnership, the General Partner monitors the rental market environment of its investment property 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, the General Partner may use rental concessions and rental rate reductions to offset softening market conditions; accordingly, there is no guarantee that the General Partner will be able to sustain such a plan. Further, a number of factors that are outside the control of the Partnership such as the local economic climate and weather can adversely or positively affect the Partnerships financial results.



Results of Operations



The Partnerships net loss for the three and nine months ended September 30, 2007 was approximately $89,000 and $150,000, respectively, compared to net loss of approximately $8,000 for the three months ended September 30, 2006 and net income of approximately $8,974,000 for the nine months ended September 30, 2006. In accordance with Statement of Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the consolidated statement of operations for the nine months ended September 30, 2006 reflects the operations of Ventura Landing Apartments as loss from discontinued operations due to its sale on March 31, 2006.



On March 31, 2006, the Partnership sold Ventura Landing Apartments to a third party for a gross sale price of approximately $11,862,000. The net proceeds realized by the Partnership were approximately $10,578,000 after payment of closing costs and a prepayment penalty owed by the Partnership. The Partnership used approximately $3,717,000 of the net proceeds to repay the mortgage encumbering the property. The Partnership realized a gain of approximately $10,003,000 as a result of the sale, which is included in gain from sale of discontinued operations. In addition, the Partnership recorded a loss on the early extinguishment of debt of approximately $960,000 as a result of the write-off of loan costs and a prepayment penalty, which is included in loss from discontinued operations for the nine months ended September 30, 2006. Also included in loss from discontinued operations for the nine months ended September 30, 2006 is approximately $12,000 of income, including revenues of approximately $380,000.



The Partnerships loss from continuing operations for the three and nine months ended September 30, 2007 was approximately $89,000 and $150,000, respectively, as compared to loss from continuing operations of approximately $8,000 and $81,000, respectively, for both the three and nine months ended September 30, 2006.  The increase in loss from continuing operations for the three and nine months ended September 30, 2007 is due to an increase in total expenses. The increase in loss from continuing operations for the nine months ended September 30, 2007 was partially offset by an increase in total revenues, which remained relatively constant for the three months ended September 30, 2007.



Total expenses increased for both the three and nine months ended September 30, 2007 due to increases in operating, interest, property tax and general and administrative expenses, partially offset by a decrease in depreciation expense. The increase in operating expenses for both periods is primarily due to increases in insurance expense as a result of increased premiums, routine repairs and maintenance expense, expenses associated with the modification to the first mortgage encumbering Village Green Apartments and advertising expenses at the Partnerships investment property. Interest expense increased for both periods primarily due to an increase in interest expense on advances from an affiliate of the General Partner and interest expense on the second mortgage obtained on the property (as discussed in Liquidity and Capital Resources), partially offset by a decrease in interest expense as a result of scheduled principal payments made on the first mortgage encumbering Village Green Apartments, which reduced the carrying balance of the loan. Property tax expense increased for both periods primarily due to an increase in the assessed value, partially offset by a decrease in the tax rate at the Partnerships investment property.  The decrease in depreciation expense for both periods is due to assets placed into service at the Partnerships investment property in previous years becoming fully depreciated during the fourth quarter of 2006.



The increase in general and administrative expenses for both the three and nine months ended September 30, 2007 is primarily due to an increase in management reimbursements to the General Partner as allowed under the Partnership Agreement. Also included in general and administrative expenses for the three and nine months ended September 30, 2007 and 2006 are costs associated with the quarterly and annual communications with investors and regulatory agencies, and the annual audit required by the Partnership Agreement.



The increase in total revenues for the nine months ended September 30, 2007 is due to an increase in rental income, partially offset by a decrease in other income. The increase in rental income is due to an increase in the average rental rate, partially offset by a decrease in occupancy and an increase in bad debt expense at Village Green Apartments.  The decrease in other income for the nine months ended September 30, 2007 is primarily due to decreases in interest income as a result of lower average cash balances in interest bearing accounts and lease cancellation fees at Village Greens Apartments.



Liquidity and Capital Resources



At September 30, 2007, the Partnership had cash and cash equivalents of approximately $583,000, compared to approximately $50,000 at September 30, 2006.  The increase in cash and cash equivalents of approximately $556,000, from December 31, 2006, is due to approximately $737,000 and $53,000 of cash provided by financing and operating activities, respectively, partially offset by approximately $234,000 of cash used in investing activities. Cash provided by financing activities consisted of proceeds from the second mortgage obtained on Village Green Apartments and advances from an affiliate of the General Partner, partially offset by distributions to partners, repayment of advances from an affiliate of the General Partner, loan costs paid, and payments of principal made on the first mortgage encumbering Village Green Apartments. Cash used in investing activities consisted of property improvements and replacements. The Partnership 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 Partnership and to comply with Federal, state, and local legal and regulatory requirements.  The General Partner monitors developments in the area of legal and regulatory compliance.  For example, the Sarbanes-Oxley Act of 2002 mandates or suggests additional compliance measures with regard to governance, disclosure, audit and other areas. In light of these changes, the Partnership expects that it will incur higher expenses related to compliance.  Capital improvements planned for the Partnership's property are detailed below.



During the nine months ended September 30, 2007, the Partnership completed approximately $177,000 of capital improvements at Village Green Apartments, consisting primarily of fire safety upgrades, structural and sidewalk improvements, exterior lighting upgrades and floor covering replacement. These improvements were funded from operations. The Partnership regularly evaluates the capital improvement needs of the property.  While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2007.  Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.



Capital expenditures will be incurred only if cash is available from operations or from Partnership reserves.  To the extent that capital improvements are completed, the Partnerships distributable cash flow, if any, may be adversely affected at least in the short term.



The Partnership's assets are thought to be sufficient for any near-term needs (exclusive of capital improvements) of the Partnership.  On August 31, 2007, the Partnership obtained a second mortgage in the principal amount of $3,700,000 on Village Green Apartments.  The second mortgage bears interest at 5.93% per annum and requires monthly payments of principal and interest of approximately $22,000 beginning on October 1, 2007 through the August 1, 2019 maturity date with a balloon payment of approximately $2,934,000 due at maturity. If no event of default exists at maturity, the maturity date will automatically be extended for one additional year, to August 1, 2020.  As a condition of the loan, the lender required AIMCO Properties, L.P., an affiliate of the General Partner, to guarantee the obligations and liabilities of the Partnership with respect to the new mortgage financing.  In connection with the new loan, loan costs of approximately $113,000 were capitalized and are included in other assets.



In connection with the new financing, the Partnership agreed to certain modifications of the existing mortgage loan encumbering Village Green Apartments. The modification includes an interest rate of 7.54% per annum, monthly payments of principal and interest of approximately $21,000 beginning October 1, 2007 through the maturity date of August 1, 2021, at which time a balloon payment of approximately $2,343,000 is due.  The previous terms were an interest rate of 7.54%, monthly payments of principal and interest of approximately $29,000 through the maturity date of August 1, 2021, at which date the mortgage was scheduled to be fully amortized.















The Partnership distributed the following amounts during the nine months ended September 30, 2007 and 2006 (in thousands, except per unit data):



|         |                    |             |                    |            
|-------- | ------------------ | ----------- | ------------------ | -----------
|         |                    | Per Limited |                    | Per Limited
|         | Nine months ended  | Partnership | Nine months ended  | Partnership
|         | September 30, 2007 | Unit        | September 30, 2006 | Unit       
|         |                    |             |                    |            
|Sale (1) | $2,399             | $15.04      | $5,479             | $34.55     



(1)

From proceeds from the September 2003 sale of West Chase Apartments and the March 2006 sale of Ventura Landing Apartments.



Future cash distributions will depend on the levels of net cash generated from operations, the timing of the debt maturities, property sale and/or refinancings.  The Partnership's cash available for distribution is reviewed on a monthly basis. There can be no assurance, however, that the Partnership will generate sufficient funds from operations after capital expenditures to permit additional distributions to its partners during 2007 or subsequent periods.



Other



In addition to its indirect ownership of the general partner interests in the Partnership, AIMCO and its affiliates owned 88,471.50 limited partnership units (the "Units") in the Partnership representing 55.79% of the outstanding Units at September 30, 2007.  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 acquire additional Units in exchange for cash or a combination of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO, either through private purchases or tender offers.  Pursuant to the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the General Partner.  As a result of its ownership of 55.79% of the outstanding Units, AIMCO is in a position to control all voting decisions with respect to the Partnership.  Although the General Partner owes fiduciary duties to the limited partners of the Partnership, the General Partner also owes fiduciary duties to AIMCO as its sole stockholder.   As a result, the duties of the General Partner, as general partner, to the Partnership and its limited partners may come into conflict with the duties of the General Partner to AIMCO as its sole stockholder.



Critical Accounting Policies and Estimates



The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States which require the Partnership to make estimates and assumptions. The Partnership believes that of its significant accounting policies, the following may involve a higher degree of judgment and complexity.



Impairment of Long-Lived Asset



Investment property is recorded at cost, less accumulated depreciation, unless the carrying amount of the asset is not recoverable.  If events or circumstances indicate that the carrying amount of the property may not be recoverable, the Partnership will make an assessment of its recoverability by comparing the carrying amount to the Partnerships estimate of the undiscounted future cash flows, excluding interest charges, of the property.   If the carrying amount exceeds the aggregate undiscounted future cash flows, the Partnership would recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property.



Real property investment is subject to varying degrees of risk.  Several factors may adversely affect the economic performance and value of the Partnerships investment property.  These factors include, but are not limited to, general economic climate; competition from other apartment communities and other housing options; local conditions, such as loss of jobs or an increase in the supply of apartments that might adversely affect apartment occupancy or rental rates; changes in governmental regulations and the related cost of compliance; increases in operating costs (including real estate taxes) due to inflation and other factors, which may not be offset by increased rents; and changes in tax laws and housing laws, including the enactment of rent control laws or other laws regulating multi-family housing.  Any adverse changes in these factors could cause impairment of the Partnerships asset.



Revenue Recognition



The Partnership generally leases apartment units for twelve-month terms or less.  The Partnership will offer rental concessions during particularly slow months or in response to heavy competition from other similar complexes in the area.  Rental income attributable to leases, net of any concessions, is recognized on a straight-line basis over the term of the lease.  The Partnership evaluates all accounts receivable from residents and establishes an allowance, after the application of security deposits, for accounts greater than 30 days past due on current tenants and all receivables due from former tenants.



ITEM 3.

CONTROLS AND PROCEDURES



(a)

Disclosure Controls and Procedures. The Partnerships management, with the participation of the principal executive officer and principal financial officer of the General Partner, who are the equivalent of the Partnerships principal executive officer and principal financial officer, respectively, has evaluated the effectiveness of the Partnerships disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this report. Based on such evaluation, the principal executive officer and principal financial officer of the General Partner, who are the equivalent of the Partnerships principal executive officer and principal financial officer, respectively, have concluded that, as of the end of such period, the Partnerships disclosure controls and procedures are effective.



(b)

Internal Control Over Financial Reporting. There have not been any changes in the Partnerships internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Partnerships internal control over financial reporting.













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. (the "Nuanes action") 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 purported to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) that 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 that 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 series of transactions which closed on October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties Trust, respectively, were merged into AIMCO. The plaintiffs sought monetary damages and equitable relief, including judicial dissolution of the Partnership. In addition, during the third quarter of 2001, a complaint captioned Heller v. Insignia Financial Group (the "Heller action") was filed against the same defendants that are named in the Nuanes action. On or about August 6, 2001, plaintiffs filed a first amended complaint. The Heller action was brought as a purported derivative action, and asserted claims for, among other things, breach of fiduciary duty, unfair competition, conversion, unjust enrichment, and judicial dissolution. On January 28, 2002, the trial court granted defendants motion to strike the complaint.  Plaintiffs took an appeal from this order.



On January 8, 2003, the parties filed a Stipulation of Settlement in proposed settlement of the Nuanes action and the Heller action. On June 13, 2003, the court granted final approval of the settlement and entered judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector ("Objector") filed an appeal (the Appeal) seeking to vacate and/or reverse the order approving the settlement and entering judgment thereto. On May 4, 2004, the Objector filed a second appeal challenging the courts use of a referee and its order requiring Objector to pay those fees.



On March 21, 2005, the Court of Appeals issued opinions in both pending appeals.  With regard to the settlement and judgment entered thereto, the Court of Appeals vacated the trial courts order and remanded to the trial court for further findings on the basis that the state of the record is insufficient to permit meaningful appellate review.  The matter was transferred back to the trial court on June 21, 2005.  With regard to the second appeal, the Court of Appeals reversed the order requiring the Objector to pay referee fees. With respect to the related Heller appeal, on July 28, 2005, the Court of Appeals reversed the trial courts order striking the first amended complaint.



On August 18, 2005, Objector and his counsel filed a motion to disqualify the trial court based on a peremptory challenge and filed a motion to disqualify for cause on October 17, 2005, both of which were ultimately denied and/or struck by the trial court.  On or about October 13, 2005 Objector filed a motion to intervene and on or about October 19, 2005 filed both a motion to take discovery relating to the adequacy of plaintiffs as derivative representatives and a motion to dissolve the anti-suit injunction in connection with settlement.  On November 14, 2005, Plaintiffs filed a Motion For Further Findings pursuant to the remand ordered by the Court of Appeals. Defendants joined in that motion.  On February 3, 2006, the Court held a hearing on the various matters pending before it and  ordered additional briefing from the parties and Objector. On June 30, 2006, the trial court entered an order confirming its approval of the class action settlement and entering judgment thereto after the Court of Appeals had remanded the matter for further findings.  The substantive terms of the settlement agreement remain unchanged.  The trial court also entered supplemental orders on July 1, 2006, denying Objectors Motion to File a Complaint in Intervention, Objectors Motion for Leave of Discovery and Objectors Motion to Dissolve the Anti-Suit Injunction.  Notice of Entry of Judgment was served on July 10, 2006. On August 31, 2006, the Objector filed a Notice of Appeal to the Courts June 30, 2006 and July 1, 2006 orders. On December 14, 2006, Objector filed his Appellants Brief. The Partnership and its affiliates, as well as counsel for the Settlement Class, both filed Respondents Briefs on May 17, 2007.  Objector filed his response on August 3, 2007.  No hearing date has yet been scheduled.



The General Partner does not anticipate that any costs to the Partnership, whether legal or settlement costs, associated with these cases will be material to the Partnerships overall operations.



ITEM 5.

OTHER INFORMATION



None.



ITEM 6.

EXHIBITS



See Exhibit Index.













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                    
|                        |                                    
|Date: November 13, 2007 | By:   /s/Martha L. Long            
|                        | Martha L. Long                     
|                        | Senior Vice President              
|                        |                                    
|Date: November 13, 2007 | By:   /s/Stephen B. Waters         
|                        | Stephen B. Waters                  
|                        | Vice President                     
|                        |                                    
|                        |                                    

















CONSOLIDATED CAPITAL PARTNERS III



EXHIBIT INDEX



Exhibit Number

Description of Exhibit



3.1

Certificate of Limited Partnership, as amended to date (Exhibit 3 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1991, is incorporated herein by reference).



3.2

Partnership Agreement dated May 22, 1980 is incorporated by reference to Exhibit A to the Prospectus of the Registration dated August 17, 1981 as filed with the Commission pursuant to Rule 424(b) under the Act.



10.53

Purchase and Sale Contract between Consolidated Capital Properties III, a California limited partnership, and the affiliated Selling Partnerships and The Bethany Group, LLC, a California limited liability company, dated November 2, 2005 and incorporated by reference to the Registrants Current Report on Form 8-K dated November 2, 2005.



10.54

Second Amendment to Purchase and Sale Contract between Consolidated Capital Properties III, a California limited partnership, and the affiliated Selling Partnerships and The Bethany Group, LLC, a California limited liability company, dated February 9, 2006 and incorporated by reference to the Registrants Current Report on Form 8-K dated February 9, 2006.



10.55

Multifamily Note, dated August 31, 2007 between Concap Village Green Associates, Ltd., a Texas limited partnership, and Capmark Bank, a Utah industrial bank, incorporated by reference to the Registrants Current Report on Form 8-K dated August 31, 2007.



10.56

Amended and Restated Multifamily Note, dated August 31, 2007 between Concap Village Green Associates, Ltd., a Texas limited partnership, and Federal Home Loan Mortgage Corporation, incorporated by reference to the Registrants Current Report on Form 8-K dated August 31, 2007.



31.1

Certification of equivalent of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.



31.2

Certification of equivalent of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.



32.1

Certification of the equivalent of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.