<ARTICLE> 5 <CIK> 0000842741 <NAME> JOHN HANCOCK REALTY INCOME FUND-III LIMITED PARTNERSHIP <PERIOD-TYPE> YEAR <FISCAL-YEAR-END> DEC-31-1996 <PERIOD-END> DEC-31-1996 <CASH> 2,771,818 <SECURITIES> 0 <RECEIVABLES> 165,654 <ALLOWANCES> 0 <INVENTORY> 0 <CURRENT-ASSETS> 2,847,252 <PP&E> 33,353,075 <DEPRECIATION> 4,649,036 <TOTAL-ASSETS> 40,896,886 <CURRENT-LIABILITIES> 380,841 <BONDS> 0 <PREFERRED-MANDATORY> 0 <PREFERRED> 0 <COMMON> 0 <OTHER-SE> 40,516,045 <TOTAL-LIABILITY-AND-EQUITY> 40,896,886 <SALES> 0 <TOTAL-REVENUES> 4,454,686 <CGS> 0 <TOTAL-COSTS> 681,307 <OTHER-EXPENSES> 1,157,362 <LOSS-PROVISION> 0 <INTEREST-EXPENSE> 0 <INCOME-PRETAX> 2,616,017 <INCOME-TAX> 0 <INCOME-CONTINUING> 2,616,017 <DISCONTINUED> 0 <EXTRAORDINARY> 0 <CHANGES> 0 <NET-INCOME> 2,616,017 <EPS-PRIMARY> 0.89 <EPS-DILUTED> 0.89