8-K

                          UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION

                         WASHINGTON, DC
                              20549





                            FORM 8-K



                         CURRENT REPORT

             Pursuant to Section 13 or 15(d) of the
                 Securities Exchange Act of 1934

                Date of Report: September 3, 1996


               CONSOLIDATED CAPITAL PROPERTIES III
     (Exact name of registrant as specified in its charter)


          CALIFORNIA              0-10273         94-2653686
(State or other jurisdiction of  (Commission   (I.R.S. Employer
incorporation or organization)   File Number)   Identification
                                                   Number)

                  One Insignia Financial Plaza
                      Post Office Box 1089
                Greenville, South Carolina  29602
             (Address of Principal Executive Office)


Registrant's telephone number, including area code (864) 239-1000


Item 2.  Acquisition or Disposition of Assets

On September  3,  1996,  State  Street  Bank  and  Trust  Company,  the  lender,
foreclosed on Mountain  Plaza Apartments located  in El Paso,  New Mexico.   The
mortgage note payable had been in  default since May 13,  1996.  In the  General
Partner's opinion, it was not in the Partnership's best interest to contest  the
foreclosure action.


Item 7.  Financial Statements and Exhibits

(c)     Exhibits:




EXHIBIT NO.              DESCRIPTION


   99.1                  Substitute Trustee's Deed entered into as of  September
                         3, 1996 by and between Mountain Plaza Associates, Ltd.,
                         a Texas limited partnership, and State Street Bank  and
                         Trust Company.



                           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 hereunto duly authorized.




                         CONSOLIDATED CAPITAL PROPERTIES III


                         By:  CONCAP EQUITIES, INC.
                              General Partner



                         By:  /s/ Carroll D. Vinson
                              Carroll D. Vinson
                              President


                         By:  /s/ Robert D. Long, Jr.
                              Robert D. Long, Jr.
                              Vice President/CAO


                         Date: September 18, 1996

EX-99.1

                           SUBSTITUTE TRUSTEE'S DEED




THE STATE OF TEXAS
                                   KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF EL PASO



     WHEREAS, on  August 11,  1993, Mountain  Plaza  Associates, Ltd.,  a  Texas
limited partnership ("Borrower"),  executed and delivered  that certain Deed  of
Trust Note  ("Note") in  the original  principal amount  of Three  Million  Five
Hundred Seventy-Two Thousand and No/100 Dollars ($3,572,000.00), payable to  the
order  of  Arbor  National  Mortgage,  Inc.,  a  New  York  corporation  ("Arbor
Mortgage"); and

     WHEREAS, the note was secured in part by the liens created in that  certain
Deed of  Trust and  Security Agreement  ("Deed  of Trust")  dated of  even  date
therewith, executed by Borrower, to William A. Kramer, Trustee, for the  benefit
of Arbor Mortgage, recorded in Book  2599, Page 2195, Real Property Records,  El
Paso County, Texas,  against certain real  property located in  El Paso  County,
Texas, and improvements situated thereon  ("Property"), said Property being  two
tracts of land described by  metes and bounds in  Exhibit A attached hereto and
incorporated herein by reference for all purposes; and

     WHEREAS, Arbor Mortgage sold, transferred and assigned the Note and Deed of
Trust to  Arbor  National  Commercial Mortgage  Corporation  ("Arbor  Commercial
Mortgage") by  instrument  recorded  in Book  2599,  Page  2253,  Real  Property
Records, El Paso County, Texas; and

     WHEREAS, on August 11, 1993,  Arbor Commercial Mortgage sold,  transferred,
assigned and  endorsed the  Note to  First Boston  Mortgage Capital  Corporation
("First Boston")  and by  instrument  recorded in  Book  2666, Page  1640,  Real
Property Records,  El  Paso  County,  Texas,  Arbor  Commercial  Mortgage  sold,
transferred and assigned all its right, title and interest in and to the Deed of
Trust to First Boston; and

     WHEREAS, on or about February 10, 1995, CS First Boston Mortgage Securities
Corp. included the Note  in a pool of  mortgage loans sold  as the DLJ Mortgage
Acceptance Corp.  and  CS First  Boston  Mortgage Securities  Corp.  Multifamily
Mortgage Pass-Through Certificates, Series 1994-MF1 ("Trust Certificates"); and

     WHEREAS, State Street Bank and Trust  Company ("State Street Bank") is  the
trustee of the Trust Certificates and the  current holder of legal title to  the
Note and  Deed  of Trust,  with  all  powers of  acceleration,  appointment  and
foreclosure thereunder; and

     WHEREAS, default has occurred under the  terms and provisions of the  Note,
the indebtedness evidenced  by the Note  ("Loan") has been  accelerated and  the
Loan is wholly matured and due and payable; and

     WHEREAS, pursuant to the terms and  provisions of the Deed of Trust,  State
Street Bank exercised its right to  appoint a Substitute Trustee, and by  virtue
of that  certain Appointment  of Substitute  Trustee dated  July 24,  1996,  the
undersigned was appointed  Substitute Trustee in  accordance with the  provision
therefor contained in  the Deed of  Trust, and State  Street Bank has  requested
Substitute Trustee to sell the Property to satisfy the Loan; and

     WHEREAS, pursuant to State  Street Bank's request  and fully in  accordance
with the terms  and provisions of  the Deed of  Trust, I proceeded  to sell  the
Property at public auction in the first floor  lobby area of the El Paso  County
Courthouse, 500 East San  Antonio Street, El Paso,  Texas, no earlier than  1:00
p.m. and no later  that 4:00 p.m.  on Tuesday, September  3, 1996, after  having
given notice of the earliest and latest hour,  place and terms of such sale,  as
prescribed by law and by the terms of the Deed of Trust, by filing or causing to
be filed with the County Clerk of El Paso County, Texas, notice of sale at least
twenty-one (21) days preceding the day of  the proposed sale, and by causing  to
be posted written notice thereof at least twenty-one (21) days preceding the day
of the proposed sale on the bulletin board of the El Paso County Courthouse,  El
Paso, Texas,  and  by serving  written  notice  at least  twenty-one  (21)  days
preceding the  day of  the proposed  sale,  by certified  and regular  mail,  to
Borrower's most current address as shown in State Street Bank's records; and

     WHEREAS, at such sale  the Property was  by me struck  off to State  Street
Bank and Trust  Company, Trustee  of the DLJ  Mortgage Acceptance  Corp. and  CS
First  Boston  Mortgage  Securities  Corp.  Multifamily  Mortgage   Pass-Through
Certificates, Series  1994-MF1 (hereinafter,  "Grantee"), at  the hour  of  1:39
p.m., within three (3) hours of the notice of the earliest time of sale, for the
price  of  Three  Million  Four  Hundred  Sixty  Thousand  and  No/100   Dollars
($3,460,000.00), it  being  the  best and  highest  bidder  therefor,  and  said
consideration being the best and highest bid therefor.

     NOW, THEREFORE,  KNOW  ALL MEN  BY  THESE  PRESENTS, that  I,  Betty  Piper
Paschal, of Dallas County, Texas, Substitute  Trustee as aforesaid by virtue  of
the powers granted unto  me by the Deed  of Trust, and  in consideration of  the
foregoing premises and of the value  expressed above conveyed to me by  Grantee,
the receipt and sufficiency of which are hereby acknowledged, have GRANTED, SOLD
and CONVEYED, and by these presents do GRANT, SELL and CONVEY, the Property unto
Grantee;

     TO HAVE  AND TO  HOLD the  Property, together  with all  and singular,  the
rights and appurtenances  thereto and in  anywise belonging to  Grantee and  its
successors and assigns forever, and for  and on behalf of Borrower's  successors
and assigns, to  warrant and  forever defend,  all and  singular, the  Property,
insofar as authorized by the Deed of Trust, unto Grantee and its successors  and
assigns against every person whomsoever lawfully  claiming or to claim the  same
or any part thereof.

     WITNESS MY HAND this 3rd day of September, 1996.



                                   /s/Betty Piper Paschal
                                   Betty Piper Paschal
                                   Substitute Trustee


STATE OF TEXAS

COUNTY OF EL PASO

     This instrument was acknowledged before me on the 3rd day of September,
1996, by Betty Piper Paschal.



                                   /s/E.K. Zorin
                                   Notary Public, State of Texas
                                   My Commission expires
                                   12/08/98


                                   Exhibit A
TRACT 1

Description of a 5.4111 acre parcel of land being a portion of Block "G"  Arnold
Foothills, City of El Paso, El  Paso County, Texas, and being more  particularly
described by metes and bounds as follows to wit:

Starting at  a  found U.S.  Army  Brass Cap  set  in concrete,  located  at  the
Southeasterly corner of Block  B, Arnold Foothills, Thence  South 88 degrees  55
minutes 10 seconds West a distance of 298.75  feet to a set 5/8" diameter  rebar
with a cap said point lying on the westerly right-of-way line of Alabama  Street
said being the "TRUE POINT OF BEGINNING";

Thence South 88 degrees 55 minutes 10 seconds West a distance of 252.33 feet  to
a chiseled "x" on concrete drainage flume;

Thence North 42 degrees 56 minutes 30 seconds West a distance of 199.83 feet  to
a set 5/8" diameter rebar with cap;

Thence North 01 degree 18 minutes 06 seconds West a distance of 506.85 feet to a
set 5/8" diameter rebar with cap;

Thence North 11 degrees 30 minutes 00 seconds West a distance of 160.00 feet  to
a set chiseled "x"  on concrete sidewalk located  on the southerly  right-of-way
line of Zion Drive;

Thence along said  southerly right-of-way line  Zion Drive North  84 degrees  15
minutes 20 seconds  E a distance  of 61.63 feet  to a chiseled  "x" on  concrete
sidewalk;

Thence 45.94 feet along said southerly right-of-way line of Zion Drive and along
the arc of a curve to the left whose interior angle of 09 degrees 03 minutes  06
seconds, whose radius is 290.68 feet, and whose chord bears North 79 degrees  43
minutes 42 seconds East a distance of 45.89  feet to a chiseled "x" on  concrete
sidewalk;

Thence South 13 degrees 15 minutes 40 seconds East a distance of 151.40 feet  to
a set 5/8 inch diameter rebar with cap;

Thence South 52 degrees 10 minutes 15 seconds East a distance of 21.78 feet to a
set 5/8" diameter rebar with cap;

Thence North 88 degrees 55 minutes 10 seconds East a distance of 33.24 feet to a
set chiseled "x" on front of rockwall;


Exhibit A to Substitute Trustee's Deed
Executed by Named Substitute Trustee
on Behalf of State Street Bank and Trust Company

                             Exhibit A (Continued)


Thence North 76 degrees 04 minutes 26 seconds East a distance of 105.78 feet  to
a set  5/8" diameter  rebar with  cap along  the Westerly  right-of-way line  of
Alabama Street;

Thence 152.36 feet along the westerly  right-of-way line of said Alabama Street
and along the arc of a curve to the left,  whose interior angle is 2 degrees  59
minutes 04 seconds, whose radius is 2925.00 feet, and whose chord bears South 15
degrees 11  minutes 28  seconds East  a  distance of  152.34  feet to  set  5/8"
diameter rebar with cap;

Thence along said westerly right-of-way line of Alabama Street South 16  degrees
41 minutes 00 seconds East a  distance of 72.70 feet to  set nail and shiner  on
rockwall;

Thence 475.73 feet along said westerly  right-of-way line of Alabama Street  and
along the arc  of a curve  to the right  whose interior angle  is 14 degrees  44
minutes 02 seconds, whose radius is 1849.96 feet, and whose chord bears South 09
degrees 18 minutes 59 seconds East a distance  of 474.42 feet back to the  "TRUE
POINT OF BEGINNING" and said parcel containing 235,709.68 square feet or  5.4111
acres of land more or less.


TRACT 2

Description of a 2.7579 acre parcel of land being all of Block "D" and a portion
of Block "C", Arnold Foothills, and a  vacated portion of Atlas Avenue, City  of
El Paso, El Paso County, Texas,  and being more particularly described by  metes
and bounds as follows to wit:

Starting at  a  found U.S.  Army  Brass Cap  set  in concrete,  located  at  the
southeasterly corner of Block  B, Arnold Foothills, Thence  South 88 degrees  55
minutes 10 seconds  West a  distance of 551.08  feet to  a set  chiseled "x"  on
concrete drainage flume, Thence  North 42 degrees 56  minutes 30 seconds West  a
distance of 199.83 feet to a set 5/8" diameter with rebar with cap, Thence North
01 degree 18 minutes  06 seconds West a  distance of 506.85 feet  to a set  5/8"
diameter rebar with cap, Thence  North 11 degrees 30  minutes 00 seconds West  a
distance of 220.30 feet  to a set nail  on rockwall, said  nail being the  "TRUE
POINT OF BEGINNING";

Thence North 11 degrees 30 minutes 00 seconds West a distance of 536.95 feet  to
a set 5/8" diameter rebar with cap;

Thence North 88  degrees 49 minutes 00 seconds East a distance of 329.25 feet to
a set nail and shiner on the westerly right-of-way line of Alabama Street;

Thence along said westerly right-of-way line  of Alabama Street South 01  degree
11 minutes 00 seconds East a distance of 80.10 feet to a set nail and shiner  on
rockwall;

Thence 230.51 feet, continuing along the  westerly right-of-way line of  Alabama
Street and along the  arc of the curve  to the left whose  interior angle is  04
degrees 30 minutes  55 seconds,  whose radius is  2925.00 feet  and whose  chord
bears South 03 degrees 26 minutes 28 seconds  East a distance of 230.45 feet  to
set chiseled "x" on concrete sidewalk;

Thence South 84 degrees 18 minutes 05 seconds West a distance of 144.76 feet  to
a set 5/8" diameter rebar with cap;

Thence South 01 degree 03 minutes 00 seconds East a distance of 196.75 feet to a
set 5/8" diameter rebar with cap, said point being on the northerly right-of-way
line of Zion Drive;

Thence 30.26 feet along said northerly right-of-way line of Zion Drive and along
the arc of a  curve to the right  whose interior angle 7  degrees 31 minutes  00
seconds and whose radius is 230.68 feet, and whose chord bears South 80  degrees
29 minutes 50 seconds West a distance of 30.24 feet to a set 5/8" diameter rebar
with cap;

Thence continuing  along said  northerly right-of-way  of  Zion Drive  South  84
degrees 15 minutes 20 seconds West  a distance of 67.67  feet back to the  "TRUE
POINT OF BEGINNING" and said parcel containing 120,132.25 square feet or  2.7579
acres of land more or less.