<ARTICLE> 5 <CIK> 0000842741 <NAME> JOHN HANCOCK REALTY INCOME FUND-III LIMITED PARTNERSHIP <PERIOD-TYPE> 9-MOS <FISCAL-YEAR-END> DEC-31-1998 <PERIOD-END> SEP-30-1998 <CASH> 3,313,838 <SECURITIES> 268,971 <RECEIVABLES> 0 <ALLOWANCES> 0 <INVENTORY> 0 <CURRENT-ASSETS> 3,582,809 <PP&E> 32,921,857 <DEPRECIATION> 5,379,751 <TOTAL-ASSETS> 39,273,939 <CURRENT-LIABILITIES> 648,685 <BONDS> 0 <PREFERRED-MANDATORY> 0 <PREFERRED> 0 <COMMON> 0 <OTHER-SE> 38,592,752 <TOTAL-LIABILITY-AND-EQUITY> 39,273,939 <SALES> 0 <TOTAL-REVENUES> 3,628,424 <CGS> 0 <TOTAL-COSTS> 530,010 <OTHER-EXPENSES> 874,267 <LOSS-PROVISION> 0 <INTEREST-EXPENSE> 0 <INCOME-PRETAX> 2,224,147 <INCOME-TAX> 0 <INCOME-CONTINUING> 2,224,147 <DISCONTINUED> 0 <EXTRAORDINARY> 0 <CHANGES> 0 <NET-INCOME> 2,224,147 <EPS-PRIMARY> 0.76 <EPS-DILUTED> 0.76