SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC  20549

                                   FORM 8-K

                                CURRENT REPORT

                    PURSUANT TO SECTION 13 OR 15 (d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

        Date of Report (date of earliest event reported)  June 17, 1997

                      BALCOR EQUITY PENSION INVESTORS-III
                       A REAL ESTATE LIMITED PARTNERSHIP
         ------------------------------------------------------------
                           Exact Name of Registrant


Illinois                                0-14348
-----------------------------------     -----------------------------------
State or other jurisdiction             Commission file number

2355 Waukegan Road
Suite A200
Bannockburn, Illinois                   36-3354308
-----------------------------------     -----------------------------------
Address of principal                    I.R.S. Employer
executive offices                       Identification
                                        Number

60015
-----------------------------------
Zip Code


              Registrant's telephone number, including area code:
                                (847) 267-1600
<PAGE>
ITEM 2.  ACQUISITION OR DISPOSITION OF ASSETS
------------------------------------------------------------------------

Arborland Consumer Mall

In 1986, the Partnership acquired a 99% interest in the limited partnership
(the "Limited Partnership") which owned the Arborland Consumer Mall, Ann Arbor,
Michigan, utilizing approximately $20,745,000 of offering proceeds.  The seller
of the property retained a 1% interest in the Limited Partnership.

On June 17, 1997, the Limited Partnership contracted to sell the property to an
unaffiliated party, Fremont Arborland, LLC, a Connecticut limited liability
company.  The sale price is $7,000,000.  The purchaser has deposited $200,000
into an escrow account as earnest money.  The purchaser will receive a $700,000
credit against the sale price for work relating to asbestos and underground
storage tank removal.  The remaining portion of the sale price will be payable
in cash at closing, which is scheduled to occur 21 days following the
determination of the Escrow Amount, as described below.  The estimated closing
date is September 15, 1997.

From the proceeds of the sale, the Limited Partnership will pay $157,500 as a
brokerage commission to an affiliate of the third party providing property
management services for the Partnership.  The Limited Partnership will receive
the remaining proceeds of approximately $6,142,500, less closing costs.  Under
the Limited Partnership's partnership agreement, the Partnership is entitled to
receive all of the net sale proceeds.  Of such proceeds, $250,000 will be
retained by the Partnership and will not be available for use or distribution
by the Partnership until the later of 90 days after closing or the resolution
of any claims brought by the purchaser prior to 90 days after the closing.  In
addition, a third party has been retained by the Partnership to conduct an
environmental site assessment of the property, which will specify an estimate
of the costs to cure any deficiencies, excluding those matters described above.
Upon the approval of the purchaser of such estimate, a portion of the sale
proceeds equal to 110% of such estimate (the "Escrow Amount") will be placed in
escrow until all environmental issues relating to the property are resolved.
Any costs associated with the correction of any deficiencies disclosed by the
assessment will be paid out the Escrow Amount.

Neither the General Partner nor any affiliate will receive a brokerage
commission in connection with the sale of the property.  The General Partner
will be reimbursed by the Limited Partnership for actual expenses incurred in
connection with the sale.

The closing is subject to the satisfaction of numerous terms and conditions.
There can be no assurance that all of the terms and conditions will be complied
with and, therefore, it is possible the sale of the property may not occur.
<PAGE>
ITEM 5.  OTHER EVENTS
---------------------------------------------------------------------------

(a)  Erindale Centre

As previously reported, on June 2, 1997, the Partnership contracted to sell the
Erindale Centre shopping center, Colorado Springs, Colorado, to an unaffiliated
party, G/B Investments, Inc., a Colorado corporation, for a sale price of
$8,250,000.  The Partnership and the purchaser have agreed to extend the
closing of the sale from July 1, 1997 to August 1, 1997.  The purchaser has
added $100,000 to the earnest money previously deposited into an escrow
acccount for a total of $300,000 in earnest money.

(b)  Bingham Farms Office Plaza - Phase IV

As previously reported, on May 2, 1997, the Partnership contracted to sell the
Bingham Farms Office Plaza - Phase IV, Bingham Farms, Michigan, to an
unaffiliated party, Bingham Partners, L.P., a Delaware limited partnership, for
a sale price of $13,800,000.  The Partnership and the purchaser have agreed to
reduce the sale price to $12,700,000.


ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS
----------------------------------------------------------------------

     (A)  FINANCIAL STATEMENTS AND EXHIBITS:

            None

     (B)  PRO FORMA FINANCIAL INFORMATION:

            None

     (C)  EXHIBITS:

          (2)  (a) Agreement of Sale and attachment thereto relating to the 
                   sale of Arborland Consumer Mall, Ann Arbor, Michigan.

               (b) First Amendment to Agreement of Sale and Escrow Agreement
                   relating to the sale of Arborland Consumer Mall, Ann Arbor,
                   Michigan.

          (99) (a) Second Amendment to Agreement of Sale relating to the
                   sale of Erindale Centre, Colorado Springs, Colorado.

               (b) (i) First Letter Amendment to Agreement of Sale relating 
                       to the sale of Bingham Farms Office Plaza - Phase IV, 
                       Bingham Farms, Michigan.

                 (ii)  Second Amendment to Agreement of Sale relating to the 
                       sale of Bingham Farms Office Plaza - Phase IV, Bingham 
                       Farms, Michigan.

     No information is required under Items 1, 3, 4, 6 and 8 and these items
have, therefore, been omitted.
<PAGE>
Signature
-------------

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.

                    BALCOR EQUITY PENSION INVESTORS-III
                    A REAL ESTATE LIMITED PARTNERSHIP

                         By:  Balcor Equity Partners-III, an Illinois
                              general partnership, its general partner

                         By:  The Balcor Company, a Delaware corporation,
                              a partner

                         By:   /s/ Jerry M. Ogle
                              -----------------------------------------
                                   Jerry M. Ogle, Managing Director
                                   and General Counsel


Dated:  July 2, 1997
<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC  20549

                                   FORM 8-K

                                CURRENT REPORT

                    PURSUANT TO SECTION 13 OR 15 (d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

        Date of Report (date of earliest event reported)  June 17, 1997

                      BALCOR EQUITY PENSION INVESTORS-III
                       A REAL ESTATE LIMITED PARTNERSHIP
         ------------------------------------------------------------
                           Exact Name of Registrant

Illinois                                0-14348
-----------------------------------     -----------------------------------
State or other jurisdiction             Commission file number

2355 Waukegan Road
Suite A200
Bannockburn, Illinois                   36-3354308
-----------------------------------     -----------------------------------
Address of principal                    I.R.S. Employer
executive offices                       Identification
                                        Number

60015
-----------------------------------
Zip Code

              Registrant's telephone number, including area code:
                                (847) 267-1600
ITEM 2.  ACQUISITION OR DISPOSITION OF ASSETS
------------------------------------------------------------------------

Arborland Consumer Mall

In 1986, the Partnership acquired a 99% interest in the limited partnership
(the "Limited Partnership") which owned the Arborland Consumer Mall, Ann Arbor,
Michigan, utilizing approximately $20,745,000 of offering proceeds.  The seller
of the property retained a 1% interest in the Limited Partnership.

On June 17, 1997, the Limited Partnership contracted to sell the property to an
unaffiliated party, Fremont Arborland, LLC, a Connecticut limited liability
company.  The sale price is $7,000,000.  The purchaser has deposited $200,000
into an escrow account as earnest money.  The purchaser will receive a $700,000
credit against the sale price for work relating to asbestos and underground
storage tank removal.  The remaining portion of the sale price will be payable
in cash at closing, which is scheduled to occur 21 days following the
determination of the Escrow Amount, as described below.  The estimated closing
date is September 15, 1997.

From the proceeds of the sale, the Limited Partnership will pay $157,500 as a
brokerage commission to an affiliate of the third party providing property
management services for the Partnership.  The Limited Partnership will receive
the remaining proceeds of approximately $6,142,500, less closing costs.  Under
the Limited Partnership's partnership agreement, the Partnership is entitled to
receive all of the net sale proceeds.  Of such proceeds, $250,000 will be
retained by the Partnership and will not be available for use or distribution
by the Partnership until the later of 90 days after closing or the resolution
of any claims brought by the purchaser prior to 90 days after the closing.  In
addition, a third party has been retained by the Partnership to conduct an
environmental site assessment of the property, which will specify an estimate
of the costs to cure any deficiencies, excluding those matters described above.
Upon the approval of the purchaser of such estimate, a portion of the sale
proceeds equal to 110% of such estimate (the "Escrow Amount") will be placed in
escrow until all environmental issues relating to the property are resolved.
Any costs associated with the correction of any deficiencies disclosed by the
assessment will be paid out the Escrow Amount.

Neither the General Partner nor any affiliate will receive a brokerage
commission in connection with the sale of the property.  The General Partner
will be reimbursed by the Limited Partnership for actual expenses incurred in
connection with the sale.

The closing is subject to the satisfaction of numerous terms and conditions.
There can be no assurance that all of the terms and conditions will be complied
with and, therefore, it is possible the sale of the property may not occur.
ITEM 5.  OTHER EVENTS
---------------------------------------------------------------------------

(a)  Erindale Centre

As previously reported, on June 2, 1997, the Partnership contracted to sell the
Erindale Centre shopping center, Colorado Springs, Colorado, to an unaffiliated
party, G/B Investments, Inc., a Colorado corporation, for a sale price of
$8,250,000.  The Partnership and the purchaser have agreed to extend the
closing of the sale from July 1, 1997 to August 1, 1997.  The purchaser has
added $100,000 to the earnest money previously deposited into an escrow
acccount for a total of $300,000 in earnest money.

(b)  Bingham Farms Office Plaza - Phase IV

As previously reported, on May 2, 1997, the Partnership contracted to sell the
Bingham Farms Office Plaza - Phase IV, Bingham Farms, Michigan, to an
unaffiliated party, Bingham Partners, L.P., a Delaware limited partnership, for
a sale price of $13,800,000.  The Partnership and the purchaser have agreed to
reduce the sale price to $12,700,000.

ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS
----------------------------------------------------------------------

     (A)  FINANCIAL STATEMENTS AND EXHIBITS:

            None

     (B)  PRO FORMA FINANCIAL INFORMATION:

            None

     (C)  EXHIBITS:

          (2)  (a) Agreement of Sale and attachment thereto relating to the 
                   sale of Arborland Consumer Mall, Ann Arbor, Michigan.

               (b) First Amendment to Agreement of Sale and Escrow Agreement
                   relating to the sale of Arborland Consumer Mall, Ann Arbor,
                   Michigan.

          (99) (a) Second Amendment to Agreement of Sale relating to the
                   sale of Erindale Centre, Colorado Springs, Colorado.

               (b) (i) First Letter Amendment to Agreement of Sale relating 
                       to the sale of Bingham Farms Office Plaza - Phase IV, 
                       Bingham Farms, Michigan.

                 (ii)  Second Amendment to Agreement of Sale relating to the 
                       sale of Bingham Farms Office Plaza - Phase IV, Bingham 
                       Farms, Michigan.

     No information is required under Items 1, 3, 4, 6 and 8 and these items
have, therefore, been omitted.
Signature
-------------

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.

                    BALCOR EQUITY PENSION INVESTORS-III
                    A REAL ESTATE LIMITED PARTNERSHIP

                         By:  Balcor Equity Partners-III, an Illinois
                              general partnership, its general partner

                         By:  The Balcor Company, a Delaware corporation,
                              a partner

                         By:   /s/ Jerry M. Ogle
                              -----------------------------------------
                                   Jerry M. Ogle, Managing Director
                                   and General Counsel

Dated:  July 2, 1997