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 MARCH 31, 1998

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 260
     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>
                   FLORIDA INCOME FUND III, L.P.
                               INDEX



PART I                                                    PAGE NO.


     FINANCIAL INFORMATION

     Balance Sheets at March 31, 1998
     and December 31, 1997 . . . . . . . . . . . . . . . . . . . 3


     Statements of Income for the Three 
     Months Ended March 31, 1998 and 1997. . . . . . . . . . . . 4


     Statements of Cash Flows for the Three 
     Months Ended March 31, 1998 and 1997. . . . . . . . . . . . 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>
<PAGE>
<TABLE>
<CAPTION>
                  PART I - FINANCIAL INFORMATION
           FLORIDA INCOME FUND III, LIMITED PARTNERSHIP
                    BALANCE SHEETS (Unaudited)

                                            March 31   Dec. 31
                                            1998       1997
<S>                                         <C>        <C>
ASSETS

CURRENT ASSETS
Cash                                           402,445    156,000 
Accts Recvable Trade, Net of Allowance
  for Doubtful Accts of $19,984 for
  3/31/98 and $18,579 for 12/31/97             575,441    377,930 
Inventory                                       74,757     69,837 
Prepaid Expenses and Other                      88,133     90,797 
                                             __________  _________
     Total Current Assets                    1,140,776    694,564 

Rental Properties
  Abandonment                                3,082,157  3,082,157 
Rental Properties, (Net of accumulated
  depreciation of $4,743,637 at
  3/31/98 $4,536,637 at 12/31/97            14,343,194 14,485,000 
Intangible Assets
  Deferred Loan and
  Organizational Costs Net                      28,248     31,864 
                                           ___________ ___________
     Total Assets                           18,594,375 18,293,585 

LIABILITIES & PARTNERS' CAPITAL

CURRENT LIABILITIES
Current Maturities of Notes Mtgs Payable       423,473    722,549 
Accounts Payable, Trade                        399,753    405,986 
Accrued Expenses                               398,276    481,669 
Customer and Security Deposits                 399,528    504,885 
                                            __________  __________
     Total Current Liabilities               1,621,030  2,115,089 

Mtgs Payable related to Rental Prpty Mgmt    3,200,000  3,200,000 
Mtgs Payable, Less Current Maturities        4,696,788  4,804,961 

PARTNERS' CAPITAL
General Partners Capital                       (31,450)   (31,450)
Limited Partners Capital                     8,002,782  8,204,985 
Net Income                                   1,105,225          0 
                                            __________ ___________
  Total Partners' Equity                     9,076,557  8,173,535 

  Total Liabilities & Partners' Capitl     18,594,375  18,293,585 

</TABLE>
See Accompanying Notes to the Financial Statements

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



                                       For Three Months Ended 
                                       03/31/98        03/31/97
                                      _________        _________
<S>                                    <C>             <C> 

REVENUES:

Rental Income                          3,628,162        3,667,264 

Interest Income                            1,130            1,493 
                                       __________       __________
  Total Revenues                       3,629,292        3,668,757 


COSTS AND EXPENSES:

Property Operating Expenses            2,089,321        2,175,695 

Real Estate Taxes                         67,500           48,525 

Interest Expense                         156,630          155,014 

Depreciation                             207,000          204,234 

Amortization                               3,616                0 
                                       __________       __________

Total Expenses                         2,524,067        2,583,468 

  Net Income                           1,105,225        1,085,289 


</TABLE>


See Accompanying Notes to the Financial Statements


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

                                        For The Three Months Ended
                                           3/31/98     3/31/97 
                                           _________   __________
<S>                                        <C>         <C>          
Cash flows from operating activities:

Net Income                                 1,105,225   1,085,289 
Adjustments to reconcile net income to
  net cash provided by operations:
     Depreciation & Amortization             210,616     204,235 
     (Increase) decrease in Accts recvble   (197,511)   (195,154)
     Prepaid expenses and other                2,664     169,161 
  Inventory                                   (4,920)      6,527 
  Increase (decrease) in:
     Accounts payable and Accrued expense    (89,626)   (438,547)
     Customer & security deposits           (105,357)    (75,238)
                                            _________   _________
Net Cash flows provided by operating 
activities                                   921,091     756,273 

Cash flows from investing activities:
  Acquisition of and improvements to 
   rental properties                         (65,194)    (15,485)
                                            _________   _________
Net cash used in investing activities        (65,194)    (15,485)

Cash flows from financing activities:
  Partner distributions paid                (202,203)    (73,585)
  Repayment of long term borrowing          (407,249)   (100,931)
                                            _________   _________
  Net cash flows used by financing 
   activities                               (609,452)   (174,516)

  Net increase (decrease) in cash            246,445     566,272 
  Cash December 31                           156,000     101,108 
  Cash March 31                              402,445     667,380 

</TABLE>

See Accompanying Notes to the Financial Statements

PAGE 5<PAGE>
<PAGE>
              FLORIDA INCOME FUND III, LIMITED PARTNERSHIP
                      NOTES TO FINANCIAL STATEMENTS
                             MARCH 31, 1998
                               (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, 1997. 
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 also 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 $742,937 were incurred during the first quarter of
1998.  This compares to $739,648 of costs that were incurred during the
first quarter of 1997.  The increase in cost is primarily due to
increases in payroll.  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 $108,389 in management fees in accordance with the
Partnership agreement.  This compares to $220,125 in management fees
which were incurred during the first quarter of 1997.


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
March 31, 1998, was $402,445.  This compares to its cash position of
$156,000 at December 31, 1997.  The Partnership's cash position at March
31, 1997, was $667,380.





PAGE 6<PAGE>
<PAGE>

Liquidity - Continued

For the three months ended March 31, 1998, the Partnership's cash
increased $246,445.  The increase in cash was due to cash flow from
operations of $921,091; cash outlays for capital improvements of
$65,194; cash outlays for partner distributions of $202,203; and net
repayment of long term debt of $407,249.

The Partnership's total investment in properties for its portfolio at
March 31, 1998, was $22,933,452.  This compares to its total property
investment of $22,868,258 at December 31, 1997.  

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.  The foreclosure proceedings had not been finalized
at March 31, 1998.

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.  

During the first quarter of 1998, the Partnership entered into a
Purchase Agreement with a hotel company to sell the Pink Shell.  Limited
Partners approval of this proposed transaction was solicited in April of
1998.  The sale was approved and closed May 1, 1998.  The general
partners will adopt a formal plan of liquidation, in accordance with the
Partnership agreement, which will be implemented as soon as all the
terms and conditions of the sale are satisfied.

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.




PAGE 7<PAGE>
<PAGE>

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.

The Partnership paid down $407,249 of principal on long term borrowings
during the three month period.  Partnership debt as of March 31, 1998,
was $8,320,261 as compared to $8,727,510 as of December 31, 1997.

Also during the quarter, the Partnership paid $65,194 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 $1,105,225 for the three months ended
March 31, 1998.  This compares with net income of $1,085,289 for the
three month period ended March 31, 1997.  The increase in net income is
due to revenues decreasing by $39,465, property operating expenses
decreasing by $86,374, real estate taxes increasing by $18,975, interest
expense increasing by $1,616 and depreciation and amortization
increasing by $6,382.

Pink Shell's revenues decreased $39,465 due to increased room rates but
lower occupancy.  Room revenue increased $7,885, store revenue decreased
$25,026, and other revenues decreased $21,967.  Interest income
decreased $363 due to a smaller amount of funds being invested in short
term Government Securities.  

Property operating expenses have decreased for the quarter by $86,374. 
Marketing expenses have decreased $25,408 and insurance has decreased
$5,564.  Other operating expense decreases are in relation to the
decreased occupancy.  The resort has moved to daily housekeeping in
order to meet guest expectations and Best Western affiliation
requirements.

Real Estate Taxes have increased $18,975.

Interest expense increased by $1,616.

Depreciation and amortization have increased $6,382.


PAGE 8<PAGE>
<PAGE>
                                 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>
<PAGE>
                                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)





          5/13/98         By: /s/ ALLEN G. TEN BROEK  
                          --------------------------------
                          Allen G. Ten Broek  
                          President, Director and CEO
                          Mariner Capital Management, Inc.
                          (Principal Executive Officer)
                          





          5/13/98         By: /s/ ELAINE HAWKINS
                          --------------------------------
                          Elaine Hawkins  
                          Secretary/Treasurer
                          Mariner Capital Management, Inc.
                          (Principal Financial and Accounting Officer)
                          










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