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, 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>
<PAGE>                
                 FLORIDA INCOME FUND III, L.P.
                            INDEX



PART I                                               PAGE NO.


    FINANCIAL INFORMATION

    Balance Sheets at March 31, 1997
    and December 31, 1996. . . . . . . . . . . . . . . . . .3


    Statements of Income for the Three 
    Months Ended March 31, 1997 and 1996 . . . . . . . . . .4


    Statements of Cash Flows for the Three 
    Months Ended March 31, 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)

                                         March 31    Dec. 31
                                         1997        1996
<S>                                      <C>         <C>
ASSETS

CURRENT ASSETS
Cash                                        667,380     101,108 
Accts Recvable Trade, Net of Allowance
  for Doubtful Accts of $17,492 for
  3/31/97 and $19,457 for 12/31/96          541,921     346,767 
Notes Receivable                                  0           0 
Inventory                                    61,895      68,422 
Prepaid Expenses and Other                   32,447     201,608 
                                         __________  __________
     Total Current Assets                 1,303,643     717,905 

Rental Properties
  Abandonment                             3,082,157   3,082,157 
Rental Properties, (Net of accumulated
  depreciation of $4,763,193 at
  3/31/97 $4,562,574 at 12/31/96         14,888,296  15,073,430 
Intangible Assets
  Deferred Loan and
  Organizational Costs Net                   42,710      46,326 
                                         __________  __________
     Total Assets                        19,316,806  18,919,818 

LIABILITIES & PARTNERS' CAPITAL

CURRENT LIABILITIES
Current Maturities of Notes Mtgs Payable    543,573     383,573 
Accounts Payable, Trade                     542,689     619,317 
Accrued Expenses                            341,052     702,971 
Customer and Security Deposits              378,750     453,988 
                                         __________  __________
     Total Current Liabilities            1,806,064   2,159,849 

Mtgs Payable related to Rental Prpty Mgmt 3,200,000   3,200,000 
Mtgs Payable, Less Current Maturities     5,119,827   5,380,758 

PARTNERS' CAPITAL
General Partners Capital                    (38,189)    (38,189)
Limited Partners Capital                  8,143,815   8,217,400 
Net Income                                1,085,289           0 
                                         __________  ___________
  Total Partners' Equity                  9,190,915   8,179,211 

  Total Liabilities & Partners' Capitl   19,316,806  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 
                                       03/31/97         03/31/96
                                       _________        _________
<S>                                    <C>              <C> 

REVENUES:

Rental Income                          3,667,264        3,541,241 

Interest Income                            1,493            4,840 
                                       __________       __________
  Total Revenues                       3,668,757        3,546,081 


COSTS AND EXPENSES:

Property Operating Expenses            2,175,695        2,071,562 

Real Estate Taxes                         48,525           69,315 

Interest Expense                         155,014          239,792 

Depreciation                             204,234          202,670 

Amortization                                   0            4,179 
                                       __________       __________

Total Expenses                         2,583,468        2,587,518 

  Net Income                           1,085,289          958,563 


</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
                                            3/31/97      3/31/96 
                                            _________    __________
<S>                                         <C>          <C>          
Cash flows from operating activities:

Net Income                                  1,085,289     958,563 
Adjustments to reconcile net income to
  net cash provided by operations:
     Depreciation & Amortization              204,235     206,849 
     (Increase) decrease in Accts recvble    (195,154)    (67,078)
     Prepaid expenses and other               169,161      10,644 
  Inventory                                     6,527       4,623 
  Increase (decrease) in:
     Accounts payable and Accrued expense    (438,547)     59,925 
     Customer & security deposits             (75,238)   (173,648)
     Deferred Income                                0           0 
                                            __________   _________
Net Cash flows provided by operating 
activities                                    756,273     999,878 

Cash flows from investing activities:
  Cost of condominiums sold                         0           0 
  Cost of condominium construction                  0           0 
  Acquisition of and improvements to 
   rental properties                          (15,485)   (123,765)
                                            __________   _________
Net cash used in investing activities         (15,485)   (123,765)

Cash flows from financing activities:
  Loan Origination Fee paid                         0           0 
  Partner distributions paid                  (73,585)   (202,359)
  Repayment of long term borrowing           (100,931)    (91,943)
  Proceeds from long term borrowing                 0           0 

  Net cash flows used by financing 
   activities                                (174,516)   (294,302)

  Net increase (decrease) in cash             566,272     581,811 
  Cash December 31                            101,108     164,966 
  Cash March 31                               667,380     746,777 

</TABLE>

See Accompanying Notes to the Financial Statements

PAGE 5<PAGE>
<PAGE>
              FLORIDA INCOME FUND III, LIMITED PARTNERSHIP
                      NOTES TO FINANCIAL STATEMENTS
                             MARCH 31, 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 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 $739,648 were incurred during the first quarter of
1997.  This compares to $792,025 of costs that were incurred during the
first quarter of 1996.  The decrease in cost is primarily due to
decreases in insurance premiums.  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 $220,125 in management fees in accordance with
the Partnership agreement.  This compares to $208,260 in management fees
which were incurred during the first 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
March 31, 1997, was $667,380.  This compares to its cash position of
$101,108 at December 31, 1996.  The Partnership's cash position at March
31, 1996, was $746,777.





PAGE 6<PAGE>
<PAGE>

Liquidity - Continued

For the three months ended March 31, 1997, the Partnership's cash
increased $566,272.  The increase in cash was due to cash flow from
operations of $756,273; cash outlays for capital improvements of
$15,485; cash outlays for partner distributions of $73,585; and net
repayment of long term debt of $100,931.

The Partnership's total investment in properties for its portfolio at
March 31, 1997, was $22,733,646.  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 $100,931 of principal on long term borrowings
during the three month period.  Partnership debt as of March 31, 1997,
was $8,863,400 as compared to $8,964,331 as of December 31, 1996.

Also during the quarter, the Partnership paid $15,485 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 $1,085,289 for the three months ended
March 31, 1997.  This compares with net income of $958,563 for the three
month period ended March 31, 1996.  The increase in net income is due to
revenues increasing by $122,676, property operating expenses increasing
by $104,133, real estate taxes decreasing by $20,790, interest expense
decreasing by $84,778 and depreciation and amortization decreasing by
$2,615.

Pink Shell's revenues increased $204,718 due to increased room rates and
higher occupancy.  Room revenue increased $155,984, store revenue
increased $41,577, and other revenues increased $7,157.  Interest income
decreased $3,347 due to a smaller amount of funds being invested in
short term Government Securities.  

Property operating expenses have increased for the quarter by $104,133. 
The Primary increases are in the operations of the Pink Shell. 
Guaranteed payments to owners have increased $28,097 compared to the
first quarter 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 decreased $37,390.  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 $20,790 which reflects the abandonment
of Walsingham Commons.

Interest expense decreased by $84,778 due to the Partnership having a
lower amount of debt, and due to the abandonment of Walsingham Commons.

Depreciation and amortization have decreased $2,615.





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)





          5/13/97         By: /s/ LAWRENCE A. RAIMONDI
                          --------------------------------
                          Lawrence A. Raimondi
                          President, Director and CEO
                          Mariner Capital Management, Inc.
                          (Principal Executive Officer)
                          





          5/13/97         By: /s/ JOE K. BLACKETER   
                          --------------------------------
                          Joe K. Blacketer
                          Secretary/Treasurer
                          Mariner Capital Management, Inc.
                          (Principal Financial and Accounting
                           Officer)
                          










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