UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C. 20549

                                FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997

Commission File Number:                                              

        33-19152 

Exact name of Registrant as specified in its charter:

        Florida Income Fund III, Limited Partnership

State or other Jurisdiction of incorporation or organization:

        Delaware

I.R.S. Employer Identification Number:

        65-0016187

Address of Principal Executive Offices:

        12800 University Drive, Ste 675
        Fort Myers, FL 33907

Registrant's Telephone Number, including Area Code:

        (941) 481-2011

Securities registered pursuant to Section 12(b) of the Act:

        None

Securities registered pursuant to Section 12(g) of the Act:

        None

The registrant has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and has been subject
to such filing requirements for the past 90 days.
<PAGE>
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                      FLORIDA INCOME FUND III, L.P.
                                  INDEX



PART I                                                       PAGE NO.


        FINANCIAL INFORMATION

        Balance Sheets at June 30, 1997
        and December 31, 1996 . . . . . . . . . . . . . . . . . . . 3


        Statements of Income for the Three and Six
        Months Ended June 30, 1997 and 1996 . . . . . . . . . . . . 4


        Statements of Cash Flows for the Six  
        Months Ended June 30, 1997 and 1996 . . . . . . . . . . . . 5


        Notes to Financial Statements . . . . . . . . . . . . . . . 6


        Management's Discussion and Analysis of
        Financial Condition and Results of Operations . . . . . . 6-8


PART II

        OTHER INFORMATION

        Items 1 through 6 . . . . . . . . . . . . . . . . . . . . . 9


PART III

        Signatures. . . . . . . . . . . . . . . . . . . . . . . . .10


COVER PAGE


EXHIBIT 27 - Financial Data Schedule


PAGE 2<PAGE>
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<TABLE>
<CAPTION>
                     PART I - FINANCIAL INFORMATION
              FLORIDA INCOME FUND III, LIMITED PARTNERSHIP
                       BALANCE SHEETS (Unaudited)

                                               June 30    Dec. 31
                                               1997       1996
<S>                                            <C>        <C>
ASSETS

CURRENT ASSETS
Cash                                              504,827    101,108 
Accts Recvable Trade, Net of Allowance
     for Doubtful Accts of $20,566 for
     6/30/97 and $19,457 for 12/31/96             363,200    346,767 
Notes Receivable                                        0          0 
Inventory                                          60,783     68,422 
Prepaid Expenses and Other                         13,142    201,608 
                                               __________ __________
        Total Current Assets                      941,952    717,905 

Rental Properties
     Abandonment                                3,082,157  3,082,157 
Rental Properties, (Net of accumulated
     depreciation of $4,199,348 at
     6/30/97 $4,562,574 at 12/31/96            14,748,898 15,073,430 
Intangible Assets
     Deferred Loan and
     Organizational Costs Net                     39,094      46,326 
                                              ___________ __________
        Total Assets                          18,812,101  18,919,818 

LIABILITIES & PARTNERS' CAPITAL

CURRENT LIABILITIES
Current Maturities of Notes Mtgs Payable         543,573     383,573 
Accounts Payable, Trade                          344,854     619,317 
Accrued Expenses                                 348,250     702,971 
Customer and Security Deposits                   292,363     453,988 
                                              __________  __________
        Total Current Liabilities              1,529,040   2,159,849 

Mtgs Payable related to Rental Prpty Mgmt      3,200,000   3,200,000 
Mtgs Payable, Less Current Maturities          5,026,497   5,380,758 

PARTNERS' CAPITAL
General Partners Capital                         (38,189)    (38,189)
Limited Partners Capital                       7,941,457   8,217,400 
Net Income                                     1,153,296           0 
                                              __________  __________
     Total Partners' Equity                    9,056,564   8,179,211 

     Total Liabilities & Partners' Capitl     18,812,101  18,919,818 

</TABLE>
See Accompanying Notes to the Financial Statements

PAGE 3<PAGE>
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<TABLE>
<CAPTION>
              FLORIDA INCOME FUND III, LIMITED PARTNERSHIP
                          STATEMENTS OF INCOME
                               (Unaudited)


                          For Three Months Ended  For Six Months Ended
                          06/30/97    06/30/96    06/30/97  06/30/96
                          ______________________  ____________________
<S>                       <C>         <C>         <C>       <C>
REVENUES:

Rental Income             2,503,643   2,599,771   6,170,907 6,141,012

Interest Income               6,252       5,513       7,745    10,353
                          _________   __________  _________ _________
       Total Revenues     2,509,895    2,605,284  6,178,652 6,151,365


COSTS AND EXPENSES:

Property Operating
       Expenses           2,045,981   2,020,869   4,221,676 4,092,431

Real Estate Taxes            48,525      70,011      97,050   139,326

Interest Expense            143,147     233,722     298,161   473,514

Depreciation                200,056     215,797     401,238   418,467

Amortization                  4,179       4,178       7,231     8,357
                          _________   _________   _________ _________

Total Expenses            2,441,888   2,544,577   5,025,356 5,132,095

       Net Income (Loss)     68,007      60,707   1,153,296 1,019,270
                                   

</TABLE>

See Accompanying Notes to the Financial Statements










PAGE 4<PAGE>
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<TABLE>
<CAPTION>
              FLORIDA INCOME FUND III, LIMITED PARTNERSHIP
                        STATEMENTS OF CASH FLOWS
                               (Unaudited)

                                              For The Six Months Ended
                                              6/30/97     6/30/96   
                                              _________   __________
<S>                                           <C>         <C>       
Cash flows from operating activities:

Net Income                                    1,153,296   1,019,270 
Adjustments to reconcile net income to
     net cash provided by operations:
        Depreciation & Amortization             408,469     426,824 
        (Increase) decrease in Accts recvble    (16,432)    100,539 
        Prepaid expenses and other               188,466    (44,408)
     Inventory                                     7,639     (5,153)
     Increase (decrease) in:
        Accounts payable and Accrued expense   (629,184)    (44,408)
        Customer & security deposits           (161,625)   (299,616)
                                               ________   _________
Net Cash flows provided by operating 
activities                                      950,629   1,153,159 

Cash flows from investing activities:
     Acquisition of and improvements to 
      rental properties                         (76,706)   (177,302)
                                               _________  _________
Net cash used in investing activities           (76,706)   (177,302)

Cash flows from financing activities:
     Partner distributions paid                (275,943)   (406,606)
     Repayment of long term borrowing          (194,261)   (176,046)
                                              _________   _________
     Net cash flows used by financing 
   activities                                  (470,204)   (582,652)

     Net increase (decrease) in cash            403,719     393,205 

     Cash December 31                           101,108     164,966 

     Cash June 30                               504,827     558,171 

</TABLE>

See Accompanying Notes to the Financial Statements

PAGE 5<PAGE>
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              FLORIDA INCOME FUND III, LIMITED PARTNERSHIP
                      NOTES TO FINANCIAL STATEMENTS
                              JUNE 30, 1997
                               (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The accompanying financial statements have been prepared in accordance
with the instructions to Form 10-Q and therefore, do not include all
disclosures necessary for a fair presentation of the Partnership's
financial position, results of operations and statements of cash flows
in conformity with generally accepted accounting principles as set forth
in the Partnership's form 10-K for the period ended December 31, 1996. 
In management's opinion, all adjustments have been made to the financial
statements necessary for a fair presentation of interim periods
presented.


NOTE 2 - RELATED PARTY TRANSACTIONS

The General Partner and their affiliates are entitled to reimbursement
of costs (including amounts of any salaries paid to employees or its
affiliates) directly attributable to the operation of the Partnership
that could have been provided by independent parties.  Costs amounting
to $762,273 were incurred during the second quarter of 1997.  This
compares to $902,282 of costs that were incurred during the second
quarter of 1996.  An affiliate company, South Seas Resorts Company,
Inc., pays the payroll and related benefits and charges them back to the
Pink Shell.  South Seas Resorts Company, Inc. also provides room
reservation services for the resort.  During the quarter, the
Partnership incurred $150,877 in management fees in accordance with the
Partnership agreement.  This compares to $222,213 in management fees
which were incurred during the second quarter of 1996.


NOTE 3 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Liquidity

The Partnership's cash position, including interest bearing deposits at
June 30, 1997, was $504,827.  This compares to its cash position of
$101,108 at December 31, 1996.  The Partnership's cash position at June
30, 1996, was $558,171.





PAGE 6<PAGE>
<PAGE>

Liquidity - Continued

For the six months ended June 30, 1997, the Partnership's cash increased
$403,719.  The increase in cash was due to cash flow from operations of
$950,629; cash outlays for capital improvements of $76,706; cash outlays
for partner distributions of $275,943; and net repayment of long term
debt of $194,261.

The Partnership's total investment in properties for its portfolio at
June 30, 1997, was $22,794,867.  This compares to its total property
investment of $22,718,161 at December 31, 1996.  

On November 27, 1996, the Partnership defaulted under the terms of a
$3,200,000 mortgage loan on the Walsingham Commons Shopping Center.  The
Partnership agreed to the appointment of a receiver on the Walsingham
Commons on February 3, 1997.  All rights, powers, interests and
obligations in Walsingham Commons have been transferred to the receiver
as of November 27, 1996. The outstanding mortgage balance $3,200,000 is
nonrecourse and will be satisfied upon the final judgment of
foreclosure.  Details of this transaction were provided in an 8-K filed
on April 15, 1997.

This action was taken in response to a declining rental market in the
area of Largo, FL where this property is located.  The subject
neighborhood has been declining and losing many of the long term tenants
to newer buildings located in more desirable areas of Pinellas County.
This has resulted in a high supply of vacant space versus very low
demand which has in turn led to reduced rental rates.  The General
Partner was of the opinion that the problem is long term and felt it was
economically prudent to default on the mortgage loan to eliminate the
negative cash flow being generated by the property.  

Other than as discussed herein, there are no known trends, demands,
commitments, events or uncertainties, that in management's opinion, will
result or are reasonably likely to result in the registrant's liquidity
increasing or decreasing in any material way.

Capital Resources

The Partnership has entered into long term leases with 42 condominium
unit owners.  This enables the Partnership to include the 42 units in
its resort rental operation.  The Partnership pays a minimum annual
rental of $25,000 in 12 equal monthly installments to each unit owner
for a total minimum annual rental of $1,050,000.  In addition, the
Partnership pays the owner an amount by which 42.5% of the annual gross
rental income generated by the lessee from the unit exceeds the amount
of annual base rent paid.  These leases expire at various times between
December 31, 2000, and December 31, 2005.



PAGE 7

<PAGE>

Capital Resources - Continued

The Partnership paid down $194,261 of principal on long term borrowings
during the six month period.  Partnership debt as of June 30, 1997, was
$8,770,070 as compared to $8,964,331 as of December 31, 1996.

Also during the six months, the Partnership paid $76,706 for
improvements at the Pink Shell in order to refurbish the units and to
meet Best Western requirements.

Results of Operations

The Partnership had net income of $1,153,296 for the six months ended
June 30, 1997.  This compares with net income of $1,019,270 for the six
month period ended June 31, 1996.  The increase in net income is due to
revenues increasing by $27,287, property operating expenses increasing
by $159,245, real estate taxes decreasing by $42,276, interest expense
decreasing by $175,353 and depreciation and amortization decreasing by
$18,355.

Pink Shell's revenues increased $293,301 due to increased room rates and
higher occupancy.  Room revenue increased $248,288, store revenue
increased $34,288, and other revenues increased $10,726.  Interest
income decreased $1,493 due to a smaller amount of funds being invested
in short term Government Securities.  

Property operating expenses have increased for the six months by
$129,245.  The Primary increases are in the operations of the Pink
Shell.  Guaranteed payments to owners have increased $25,135 compared to
the first six months of 1996.  This is due to the lease back agreements
signed with the 42 unit condominium owners.  Marketing expenses have
decreased $5,695 and insurance has increased $28,537.  Other operating
expense increases are in relation to the increased occupancy and room
revenue.  The resort has moved to daily housekeeping in order to meet
guest expectations and Best Western affiliation requirements.

Real Estate Taxes have decreased $42,276 which reflects the abandonment
of Walsingham Commons.

Interest expense decreased by $175,353 due to the Partnership having a
lower amount of debt, and due to the abandonment of Walsingham Commons.

Depreciation and amortization have decreased $18,355.





PAGE 8<PAGE>
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                                 PART II
                            OTHER INFORMATION
              FLORIDA INCOME FUND III, LIMITED PARTNERSHIP



ITEM 1.   LEGAL PROCEEDINGS    

          None


ITEM 2.   CHANGES IN SECURITIES

          None


ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

          None


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

          None


ITEM 5.   OTHER MATERIALLY IMPORTANT EVENTS

          None


ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          (a)   EXHIBITS

                None

          (b)   REPORTS ON FORM 8-K

                None





PAGE 9<PAGE>
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                                PART III
                               SIGNATURES



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




                          FLORIDA INCOME FUND III, LIMITED PARTNERSHIP
                          MARINER CAPITAL MANAGEMENT, INC.
                          MANAGING GENERAL PARTNER
                          (Registrant)





          8/12/97         By: /s/ LAWRENCE A. RAIMONDI
                          --------------------------------
                          Lawrence A. Raimondi
                          President, Director and CEO
                          Mariner Capital Management, Inc.
                          (Principal Executive Officer)
                          





          8/12/97         By: /s/ JOE K. BLACKETER   
                          --------------------------------
                          Joe K. Blacketer
                          Secretary/Treasurer
                          Mariner Capital Management, Inc.
                          (Principal Financial and Accounting
                           Officer)
                          










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