<ARTICLE> 5 <CIK> 0000842741 <NAME> JOHN HANCOCK REALTY INCOME FUND-III LIMITED PARTNERSHIP <PERIOD-TYPE> 9-MOS <FISCAL-YEAR-END> DEC-31-1996 <PERIOD-END> SEP-30-1996 <CASH> 3,056,554 <SECURITIES> 0 <RECEIVABLES> 155,568 <ALLOWANCES> 0 <INVENTORY> 0 <CURRENT-ASSETS> 3,122,707 <PP&E> 33,353,075 <DEPRECIATION> 4,441,619 <TOTAL-ASSETS> 41,528,212 <CURRENT-LIABILITIES> 503,746 <BONDS> 0 <PREFERRED-MANDATORY> 0 <PREFERRED> 0 <COMMON> 0 <OTHER-SE> 41,024,466 <TOTAL-LIABILITY-AND-EQUITY> 41,528,212 <SALES> 0 <TOTAL-REVENUES> 3,368,147 <CGS> 0 <TOTAL-COSTS> 342,540 <OTHER-EXPENSES> 862,175 <LOSS-PROVISION> 0 <INTEREST-EXPENSE> 0 <INCOME-PRETAX> 2,163,432 <INCOME-TAX> 0 <INCOME-CONTINUING> 2,163,432 <DISCONTINUED> 0 <EXTRAORDINARY> 0 <CHANGES> 0 <NET-INCOME> 2,163,432 <EPS-PRIMARY> 0.69 <EPS-DILUTED> 0.69