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)  November 29, 1996

                      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
------------------------------------------------------------------------

1275 K Street Office Building

In 1985, the Partnership and an affiliate, through a limited partnership (the
"Limited Partnership"), acquired the 1275 K Street Office Building, Washington,
D.C. The Partnership contributed approximately $18,635,000 the acquisition of 
the property for a participating percentages in the Limited Partnership of 
39.48%.   

On December 12, 1996, the Limited Partnership contracted to sell the property
for a sale price of $28,300,000 to an unaffiliated party, Archon Group, L.P., a
Pennsylvania corporation.  The sale closed on December 19, 1996. From the
proceeds of the sale, the Partnership paid $566,000 as a brokerage commission
to an affiliate of the third party providing property management services for
the property and $335,470 in  closing costs.    The Limited Partnership
received the remaining proceeds of $27,398,530.  Of such proceeds, $2,287,500
is being retained by the Limited Partnership and will not be available for use
or distribution by the Limited Partnership for nine months after closing.  The
Partnership's share of the total proceeds will be $10,816,940.  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 purchaser has simultaneously contracted to purchase another property in
which the Partnership holds an interest, as described in Item 5 below.


ITEM 5.  OTHER EVENTS
----------------------------------
a) Ammendale Technology Park - Phase II

In 1986, the Partnership funded a $9,360,000 first mortgage loan collateralized
by the Ammendale Technology Park - Phase II, Prince George's County, Maryland
(the "Property").  The Partnership obtained title to the Property through
foreclosure in 1991.  An affiliate of the Partnership (the "Affiliate") that
funded a first mortgage loan collateralized by the Ammendale Technology Park -
Phase I ("Phase I"), which is located adjacent to the Property, obtained title
to Phase I through foreclosure simultaneously with the Partnership's
foreclosure of the Property.

On November 29, 1996, the Partnership contracted to sell the Property for a
sale price of $5,922,000 to an unaffiliated party, Writ Limited Partnership.
The purchaser has deposited $150,000 into an escrow account as earnest money.
The remaining portion of the sale price will be payable in cash at closing,
which is scheduled to occur on January 13, 1997.  From the proceeds of the
sale, the Partnership will pay as a brokerage commission a total of $177,660 to
two unaffiliated parties, one of which is an affiliate of the third party
providing property management services for the Property.  The Partnership will
receive the remaining proceeds of approximately $5,744,000, less closing costs.
<PAGE>
The Affiliate has simultaneously contracted to sell Phase I to the purchaser.
From the proceeds of the sales of the Property and Phase I, a total of $400,000
will be retained by the Partnership and the Affiliate and will not be available
for use or distribution by the Partnership and/or the Affiliate for nine months
after closing.   A termination of either the agreement of sale for the Property
or for Phase I will be deemed a termination of the other agreement of sale.
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 Partnership for actual expenses incurred in
connection with the sale.

The closing is subject to the satisfaction of numerous terms and conditions,
including the sale of Phase I.  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.

b) Perimeter 400 Center

In 1986, the Partnership and three affiliates (the "Participants") funded a
$37,000,000  first mortgage loan collateralized by the Perimeter 400 Center,
Fulton County, Georgia. The Partnership's share of the loan was $8,121,951 for
a participating percentage of 21.95%.  In 1991, in exchange for a release of
its obligations under the loan, the borrower conveyed title to the property to
a general partnership consisting of the participants (the "General
Partnership") in which each Participant holds an interest equal to its
participating percentage in the loan.

On December 2, 1996, the General Partnership contracted to sell the property
for a sale price of $40,700,000 to an unaffiliated party, Devon Properties,
Inc., a New York corporation.  The sale closed on December 18, 1996. From the
proceeds of the sale, the General Partnership paid $198,026 in closing costs,
$814,000 as a brokerage commission to an affiliate of the third party providing
property management services for the property and received the remaining
proceeds of  $39,687,974.  Of such proceeds, $1,750,000 is being retained by
the General Partnership and will not be available for use or distribution by
the General Partnership until nine months after the closing.  The Partnership's
share of the total proceeds will be $8,711,510.  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 General
Partnership for actual expenses incurred in connection with the sale.


c) Westech 360 Office Buildings

In 1987, the Partnership and an affiliate (the "Affiliate") funded a
$25,750,000 first mortgage loan collateralized by the Westech 360 Office
Buildings, Austin, Texas.  The Partnership's share of the loan was $11,150,000
for a participating percentage of 43.3%.  In 1988, a limited partnership (the
"Limited Partnership") in which the Partnership and the Affiliate each holds an
interest equal to its participating percentage in the loan obtained title to
the property pursuant to a deed in lieu of foreclosure.

On December 12, 1996, the Limited Partnership contracted to sell the property
for a sale price of $18,330,000 to an unaffiliated party, Archon Group, L.P., a
Delaware limited partnership.  The sale closed on December 19, 1996.  From the
proceeds of the sale, the Limited Partnership paid $366,600 as a brokerage
commission to an affiliate of the third party providing property management
<PAGE>
services for the property and closing costs of $101,053.  The Limited
Partnership received the remaining proceeds of $17,826,347.  Of such proceeds,
$1,395,000 is being retained by the Limited Partnership and will not be
available for use or distribution by the Limited Partnership until nine months
after the closing.  The Partnership's share of the total proceeds will be
$7,734,390.  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 purchaser has simultaneously contracted to purchase another property in
which the Partnership holds an interest, as described in Item 2 above.


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

     (A)  FINANCIAL STATEMENTS AND EXHIBITS:

            None

     (B)  PRO FORMA FINANCIAL INFORMATION:

             None

     (C)  EXHIBITS:

          (2)  Agreement of Sale and attachments thereto relating to the sale
               of the 1275 K Street Office Building, Washington, D.C.

          (99)  (a) Agreement of Sale and attachment thereto relating to
                    the sale of the Ammendale Technology Park - Phase
                    II, Prince George's County, Maryland.

                (b) Agreement of Sale and attachment thereto relating to the
                    sale of the Perimeter 400 Center, Fulton County, Georgia.

                (c) Agreement of Sale and attachment thereto relating to the
                    sale of the Westech 360 Office Buildings, Austin, Texas.


     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, Vice President 
                                 and Secretary
Dated:  December 27, 1996
<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)  November 29, 1996

                      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
------------------------------------------------------------------------

1275 K Street Office Building

In 1985, the Partnership and an affiliate, through a limited partnership (the
"Limited Partnership"), acquired the 1275 K Street Office Building, Washington,
D.C. The Partnership contributed approximately $18,635,000 the acquisition of 
the property for a participating percentages in the Limited Partnership of 
39.48%.   

On December 12, 1996, the Limited Partnership contracted to sell the property
for a sale price of $28,300,000 to an unaffiliated party, Archon Group, L.P., a
Pennsylvania corporation.  The sale closed on December 19, 1996. From the
proceeds of the sale, the Partnership paid $566,000 as a brokerage commission
to an affiliate of the third party providing property management services for
the property and $335,470 in  closing costs.    The Limited Partnership
received the remaining proceeds of $27,398,530.  Of such proceeds, $2,287,500
is being retained by the Limited Partnership and will not be available for use
or distribution by the Limited Partnership for nine months after closing.  The
Partnership's share of the total proceeds will be $10,816,940.  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 purchaser has simultaneously contracted to purchase another property in
which the Partnership holds an interest, as described in Item 5 below.

ITEM 5.  OTHER EVENTS
----------------------------------
a) Ammendale Technology Park - Phase II

In 1986, the Partnership funded a $9,360,000 first mortgage loan collateralized
by the Ammendale Technology Park - Phase II, Prince George's County, Maryland
(the "Property").  The Partnership obtained title to the Property through
foreclosure in 1991.  An affiliate of the Partnership (the "Affiliate") that
funded a first mortgage loan collateralized by the Ammendale Technology Park -
Phase I ("Phase I"), which is located adjacent to the Property, obtained title
to Phase I through foreclosure simultaneously with the Partnership's
foreclosure of the Property.

On November 29, 1996, the Partnership contracted to sell the Property for a
sale price of $5,922,000 to an unaffiliated party, Writ Limited Partnership.
The purchaser has deposited $150,000 into an escrow account as earnest money.
The remaining portion of the sale price will be payable in cash at closing,
which is scheduled to occur on January 13, 1997.  From the proceeds of the
sale, the Partnership will pay as a brokerage commission a total of $177,660 to
two unaffiliated parties, one of which is an affiliate of the third party
providing property management services for the Property.  The Partnership will
receive the remaining proceeds of approximately $5,744,000, less closing costs.
The Affiliate has simultaneously contracted to sell Phase I to the purchaser.
From the proceeds of the sales of the Property and Phase I, a total of $400,000
will be retained by the Partnership and the Affiliate and will not be available
for use or distribution by the Partnership and/or the Affiliate for nine months
after closing.   A termination of either the agreement of sale for the Property
or for Phase I will be deemed a termination of the other agreement of sale.
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 Partnership for actual expenses incurred in
connection with the sale.

The closing is subject to the satisfaction of numerous terms and conditions,
including the sale of Phase I.  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.

b) Perimeter 400 Center

In 1986, the Partnership and three affiliates (the "Participants") funded a
$37,000,000  first mortgage loan collateralized by the Perimeter 400 Center,
Fulton County, Georgia. The Partnership's share of the loan was $8,121,951 for
a participating percentage of 21.95%.  In 1991, in exchange for a release of
its obligations under the loan, the borrower conveyed title to the property to
a general partnership consisting of the participants (the "General
Partnership") in which each Participant holds an interest equal to its
participating percentage in the loan.

On December 2, 1996, the General Partnership contracted to sell the property
for a sale price of $40,700,000 to an unaffiliated party, Devon Properties,
Inc., a New York corporation.  The sale closed on December 18, 1996. From the
proceeds of the sale, the General Partnership paid $198,026 in closing costs,
$814,000 as a brokerage commission to an affiliate of the third party providing
property management services for the property and received the remaining
proceeds of  $39,687,974.  Of such proceeds, $1,750,000 is being retained by
the General Partnership and will not be available for use or distribution by
the General Partnership until nine months after the closing.  The Partnership's
share of the total proceeds will be $8,711,510.  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 General
Partnership for actual expenses incurred in connection with the sale.

c) Westech 360 Office Buildings

In 1987, the Partnership and an affiliate (the "Affiliate") funded a
$25,750,000 first mortgage loan collateralized by the Westech 360 Office
Buildings, Austin, Texas.  The Partnership's share of the loan was $11,150,000
for a participating percentage of 43.3%.  In 1988, a limited partnership (the
"Limited Partnership") in which the Partnership and the Affiliate each holds an
interest equal to its participating percentage in the loan obtained title to
the property pursuant to a deed in lieu of foreclosure.

On December 12, 1996, the Limited Partnership contracted to sell the property
for a sale price of $18,330,000 to an unaffiliated party, Archon Group, L.P., a
Delaware limited partnership.  The sale closed on December 19, 1996.  From the
proceeds of the sale, the Limited Partnership paid $366,600 as a brokerage
commission to an affiliate of the third party providing property management
services for the property and closing costs of $101,053.  The Limited
Partnership received the remaining proceeds of $17,826,347.  Of such proceeds,
$1,395,000 is being retained by the Limited Partnership and will not be
available for use or distribution by the Limited Partnership until nine months
after the closing.  The Partnership's share of the total proceeds will be
$7,734,390.  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 purchaser has simultaneously contracted to purchase another property in
which the Partnership holds an interest, as described in Item 2 above.

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

     (A)  FINANCIAL STATEMENTS AND EXHIBITS:

            None

     (B)  PRO FORMA FINANCIAL INFORMATION:

             None

     (C)  EXHIBITS:

          (2)  Agreement of Sale and attachments thereto relating to the sale
               of the 1275 K Street Office Building, Washington, D.C.

          (99)  (a) Agreement of Sale and attachment thereto relating to
                    the sale of the Ammendale Technology Park - Phase
                    II, Prince George's County, Maryland.

                (b) Agreement of Sale and attachment thereto relating to the
                    sale of the Perimeter 400 Center, Fulton County, Georgia.

                (c) Agreement of Sale and attachment thereto relating to the
                    sale of the Westech 360 Office Buildings, Austin, Texas.

     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, Vice President 
                                 and Secretary
Dated:  December 27, 1996