Exhibit 2
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                                  NEWS RELEASE


         BOSTON, MA -- May 4, 1999. Douglas Krupp, President of the General
Partner of Krupp Realty Fund, Ltd.-III, said today in connection with an
unsolicited cash tender offer by Madison Liquidity Investors 104, LLC offering
$425 per Unit of Limited Partnership Interest, which commenced on April 21,
1999, that the Fund has been advised that an affiliate of the General Partners
of the Fund intends, prior to the expiration of the Madison tender offer, to
make its own offer to purchase Units in the Fund. There is no assurance that
such an offer will be made. Because of the conflict of interest between the
General Partners of the Fund and such affiliate, the Fund is not making a
recommendation and is remaining neutral as to whether or not Unitholders should
tender their Units pursuant to the Madison offer.

         For further information, Unitholders may contact Investor
Communications of the Krupp Funds Group at 1-800-255-7877.

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