<ARTICLE> 5 <CIK> 0000842741 <NAME> JOHN HANCOCK REALTY INCOME FUND-III LIMITED PARTNERSHIP <PERIOD-TYPE> 9-MOS <FISCAL-YEAR-END> DEC-31-1997 <PERIOD-END> SEP-30-1997 <CASH> 2,986,583 <SECURITIES> 0 <RECEIVABLES> 262,147 <ALLOWANCES> 0 <INVENTORY> 0 <CURRENT-ASSETS> 3,263,618 <PP&E> 33,353,075 <DEPRECIATION> 5,271,284 <TOTAL-ASSETS> 40,355,962 <CURRENT-LIABILITIES> 670,817 <BONDS> 0 <PREFERRED-MANDATORY> 0 <PREFERRED> 0 <COMMON> 0 <OTHER-SE> 39,685,145 <TOTAL-LIABILITY-AND-EQUITY> 40,355,962 <SALES> 0 <TOTAL-REVENUES> 3,360,224 <CGS> 0 <TOTAL-COSTS> 411,866 <OTHER-EXPENSES> 896,238 <LOSS-PROVISION> 0 <INTEREST-EXPENSE> 0 <INCOME-PRETAX> 2,052,120 <INCOME-TAX> 0 <INCOME-CONTINUING> 2,052,120 <DISCONTINUED> 0 <EXTRAORDINARY> 0 <CHANGES> 0 <NET-INCOME> 2,052,120 <EPS-PRIMARY> 0.70 <EPS-DILUTED> 0.70