<PAGE>

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                          Washington, D.C. 20549-1004

                                   FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

    For the fiscal year ended                 December 31, 1997
                              --------------------------------------------------

                                   OR

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

    For the transition period from                     to
                                   -------------------    ----------------------

    Commission File Number                          0-12537
                           -----------------------------------------------------

                   First Capital Income Properties, Ltd. - Series VIII
--------------------------------------------------------------------------------
                  (Exact name of registrant as specified in its charter)

           Florida                                          59-2192277
-------------------------------                    -----------------------------
(State or other jurisdiction of                           [I.R.S. Employer
incorporation or organization)                          Identification No.]



Two North Riverside Plaza, Suite 1000, Chicago, Illinois         60606-2607
--------------------------------------------------------     -------------------
        (Address of principal executive offices)                 (Zip Code)

Registrant's telephone number, including area code             (312) 207-0020
                                                             -------------------

Securities registered  pursuant to Section 12(b) of the Act:         NONE
                                                             -------------------

Securities registered pursuant to Section 12(g)
of the Act:                                            Limited Partnership Units
                                                       -------------------------


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes  X   No
                                       ---     ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Documents incorporated by reference:

The First Amended and Restated Certificate and Agreement of Limited Partnership
filed as Exhibit A to the definitive Prospectus dated July 28, 1982, included in
the Registrant's Registration Statement on Form S-11 (Registration No. 2-78064),
is incorporated herein by reference in Part IV of this report.

Exhibit Index - Page A-1
------------------------
<PAGE>

                                    PART I

ITEM 1.  BUSINESS
-------  --------

The registrant, First Capital Income Properties, Ltd. - Series VIII (the
"Partnership") is a limited partnership organized in 1982 under the Florida
Uniform Limited Partnership Law. The Partnership sold 70,000 Limited Partnership
Units (the "Units") to the public from August 1982 to December 1982, pursuant to
a Registration Statement on Form S-11 filed with the Securities and Exchange
Commission (Registration Statement No. 2-78064). Capitalized terms used in this
report have the same meaning as those terms have in the Partnership's
Registration Statement.

The business of the Partnership is to invest primarily in existing, improved,
income-producing real estate, such as shopping centers, warehouses and office
buildings, and, to a lesser extent, in other types of income-producing real
estate, such as mortgage loans on real estate. From January 1983 to October
1984, the Partnership made six real property investments and purchased a 50%
interest in a joint venture which was formed with an Affiliated partnership for
the purpose of acquiring a 100% interest in certain real property. The
Partnership's joint venture, prior to dissolution, was operated under the common
control of First Capital Financial Corporation (the "Managing General Partner").
In addition, in April 1986 the Partnership purchased four mortgage loan
investments. As of December 31, 1997: 1) the Partnership sold or disposed of
three real property investments; 2) the Partnership and its affiliate dissolved
the joint venture as a result of the sale of the real property investment and 3)
all four of the mortgage loan investments were repaid to the Partnership.

Property management services for the Partnership's office building is provided
by an Affiliate of the Managing General Partner. Property management services
for the Partnership's shopping centers is provided by an entity not affiliated
with the Managing General Partner. All services are provided for fees calculated
as a percentage of gross rents received by the properties.

The real estate business is highly competitive. The results of operations of the
Partnership will depend upon the availability of suitable tenants, real estate
market conditions and general economic conditions which may impact the success
of these tenants. Properties owned by the Partnership frequently compete for
tenants with similar properties owned by others.

As of March 1, 1998, there were eight employees at the Partnership's properties
for on-site property maintenance and administration.


ITEM 2.  PROPERTIES (a)(b)
-------  -----------------

As of December 31, 1997, the Partnership owned the following three property
interests, all of which were owned in fee simple.

<TABLE>
<CAPTION>
                                                          Net Leasable           Number of
      Property Name                Location               Sq. Footage            Tenants (c)
------------------------    ----------------------    ------------------     ---------------
<S>                         <C>                        <C>                   <C>
Shopping Centers:
-----------------
Old Mill Place                San Antonio, Texas             150,491                23 (1)
Walker Springs Plaza          Knoxville, Tennessee           169,909                 7 (5)

Office Building:
----------------
Brookwood Metroplex
  Office Buildings I & II     Birmingham, Alabama            207,664                25 (1)
</TABLE>

(a)  For a discussion of operating results and major capital expenditures
     planned for the Partnership's properties refer to Item 7.


                                       2
<PAGE>

ITEM 2.  PROPERTIES (a)(b) (Continued)
-------  -----------------


(b)  For federal income tax purposes, the Partnership depreciates the portion of
     the acquisition costs of its properties allocable to real property
     (exclusive of land), and all improvements thereafter, over useful lives
     ranging from 18 years to 39 years, utilizing either the Accelerated Cost
     Recovery System ("ACRS") or straight-line method. The Partnership's portion
     of real estate tax expense for Walker Springs Plaza, Old Mill Place and
     Brookwood Metroplex Office Buildings I & II was $159,800, $176,400,
     $143,900, respectively, for the year ended December 31, 1997. In the
     opinion of the Managing General Partner, the Partnership's properties are
     adequately insured and serviced by all necessary utilities.

(c)  Represents the total number of tenants as well as the number of tenants, in
     parenthesis, that individually occupy more than 10% of the net leasable
     square footage of the property.

The following table presents each of the Partnership's properties' occupancy
rates as of December 31 for each of the last five years:


<TABLE>
<CAPTION>

      Property Name               1997      1996      1995      1994      1993
--------------------------        ----      ----      ----      ----      ----
<S>                              <C>       <C>       <C>       <C>       <C>
Brookwood Metroplex
  Office Buildings I & II          96%       97%      100%      100%       93%

Old Mill Place                     82%       82%       85%       92%       96%

Walker Springs Plaza              100%      100%      100%      100%       99%
</TABLE>

The amounts in the following table represent each of the Partnership's
properties' average annual rental rate per square foot for each of the last
five years ended December 31 and were computed by dividing each property's base
rental revenues by its average occupied square footage:

<TABLE>
<CAPTION>

      Property Name               1997      1996      1995      1994      1993
--------------------------        ----      ----      ----      ----      ----
<S>                              <C>       <C>       <C>       <C>       <C>
Brookwood Metroplex
  Office Buildings I & II        $10.97    $10.70    $10.32    $10.29     $9.95

Old Mill Place                   $ 7.03    $ 5.64    $ 7.86    $ 8.00     $8.12

Walker Springs Plaza             $ 5.36    $ 5.30    $ 5.22    $ 5.14     $4.91
</TABLE>


                                       3
<PAGE>



ITEM 2.  PROPERTIES (a)(b)
-------  -----------------

The following table summarizes the principal provisions of the leases for each
of the tenants which occupy ten percent or more of the rentable square footage
at each of the Partnership's properties:

<TABLE>
<CAPTION>
                                                                                                     Renewal
                                 Per annum Base Rents (a) for                      Percentage        Options
                                 -----------------------------                       of Net         (Renewal
                                                                                    Leasable         Options
                                                  Final Twelve                      Square           /Years
                                                   Months of       Expiration       Footage            per
                                     1998            Lease       Date of Lease      Occupied         option)
                                 -------------   -------------   -------------   ------------     -------------
<S>                              <C>             <C>             <C>             <C>              <C>
Brookwood Metroplex
 Office Buildings I & II
-----------------------------
Vulcan Materials Co.
 (construction material and
 chemical manufacturer)          $   1,248,700   $   1,248,700   12/31/1998 (b)       67%              2/5

Old Mill Place
-----------------------------
Hobby Lobby Creative
Center
 (Craft store)                   $     278,900   $     318,800    6/30/2011           35%              1/5

Walker Springs Plaza
-----------------------------
Stein Mart
 (department store)              $     195,000   $     195,000    2/28/1999           23%              1/5
Books-A-Million (c)
 (book store)                    $      28,700   $     114,700    3/31/1998           21%              2/5
Big Lots
 (discount department store)     $      40,000   $     120,000    4/30/1998           15%              None
Revco D.S., Inc.
 (drugstore)                     $      41,000   $      41,000    3/31/2003           10%              2/5
Steinberg's (d)
 (appliance store)                                                                    11%
</TABLE>

     (a)  The per annum base rents for each of the tenants listed above for each
          of the years between 1998 and the final twelve months for each of the
          above leases is no lesser or greater than the amounts listed in the
          above table.

     (b)  Vulcan has options to extend the expiration date of their lease, but
          notified the Partnership that it does not intend to exercise such
          options.

     (c)  Space is sublet from Kroger. Pursuant to the terms of the lease,
          Kroger is lessee.

     (d)  In September 1997, Steinberg's declared bankruptcy and in January 1998
          turned the store over to a liquidator, who is operating on a month-to-
          month basis.

                                       4
<PAGE>

ITEM 2.  PROPERTIES (a)(b)
-------  -----------------

The amounts in the following table represent the base rental income from leases
in the year of expiration (assuming no lease renewals) through the year ended
December 31, 2007:

<TABLE>
<CAPTION>
                     Number                        Base Rents in    % of Total
       Year        of Tenants      Square Feet        Year of       Base Rents
                                                   Expiration (a)        (b)
    -----------  --------------  --------------------------------   -----------
<S>              <C>             <C>               <C>              <C>
       1998            17             213,200         $ 1,477,000        44.12%
       1999             9              34,300         $   235,400        13.95%
       2000             8              26,700         $   284,000        21.06%
       2001             5              25,400         $   109,000        10.91%
       2002             5              26,200         $   109,600        13.54%
       2003             2              22,700         $   118,100        17.48%
       2004             1              20,000         $    95,800        10.51%
       2005             1               9,800         $   115,300        28.30%
       2006             0                None                None         0.00%
       2007             0                None                None         0.00%
</TABLE>


     (a)  Represents the base rents to be collected each year on expiring
          leases.

     (b)  Represents the base rents to be collected each year on expiring leases
          as a percentage of the total base rents to be collected on leases in
          effect as of December 31, 1997.

ITEM 3.   LEGAL PROCEEDINGS
-------   -----------------

(a & b)   The Partnership and its properties were not a party to, nor the
subject of, any material pending legal proceedings, nor were any such
proceedings terminated during the quarter ended December 31, 1997. Ordinary
routine legal matters incidental to the business which was not deemed material
were pursued during the quarter ended December 31, 1997.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-------   ---------------------------------------------------

(a,b,c & d)    None.

                                    PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S EQUITY AND RELATED SECURITY HOLDER MATTERS
-------  ----------------------------------------------------------------------

There has not been, nor is there expected to be, a public market for Units.

As of March 1, 1998, there were 6,322 Holders of Units.


                                       5
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
                                       For the Years Ended December 31,
                          -----------------------------------------------------------
                             1997        1996        1995        1994        1993
--------------------------------------------------------------------------------------
<S>                       <C>         <C>         <C>         <C>         <C>
Total revenues            $ 4,746,700 $ 5,310,200 $ 6,518,500 $25,877,800 $ 9,462,300
Net income (loss)         $   909,200 $   760,300 $   942,700 $19,957,100 $  (517,900)
Net income (loss)
 allocated to Limited
 Partners (a)             $   717,000 $   509,000 $   775,700 $19,423,400 $  (778,900)
Net income (loss)
 allocated to Limited
 Partners per Unit
 (70,000 Units
 outstanding)(a)          $     10.24 $      7.27 $     11.08 $    277.48 $    (11.13)
Total assets              $26,557,900 $27,746,400 $33,910,000 $41,343,100 $68,570,400
Mortgage loans payable           None        None        None        None $28,611,600
Distributions to Limited
 Partners per Unit
 (70,000 Units
 outstanding)(b)          $     26.00 $     91.50 $    119.36 $    255.00 $     36.78
Return of capital to
 Limited Partners per
 Unit (70,000 Units
 outstanding)(c)          $     15.76 $     84.23 $    108.28        None $     36.78
OTHER DATA:
Investment in commercial
 rental properties (net
 of accumulated
 depreciation and
 amortization)            $21,066,800 $22,369,600 $24,393,400 $31,547,600 $56,374,800
Investment in mortgage
 loan receivable (net of
 unearned discount)              None        None        None $ 1,064,000 $ 1,064,000
Number of real property
 interests owned at
 December 31                        3           3           3           4           5
--------------------------------------------------------------------------------------
</TABLE>
(a)Net income (loss) allocated to Limited Partners for 1994 and 1993 included
  an extraordinary (loss) on early extinguishment of debt.
(b) Distributions to Limited Partners per Unit for the years ended December 31,
    1996, 1995 and 1994 included Sale Proceeds of $57.00, $75.00 and $215.00,
    respectively.
(c) For the purposes of this table, return of capital represents either: the
    amount by which distributions, if any, exceed net income for each
    respective year or; total distributions, if any, in years when the
    Partnership incurs a net loss. Pursuant to the Partnership Agreement,
    Capital Investment is only reduced by distributions of Sale or Refinancing
    Proceeds. Accordingly, return of capital as used in the above table does
    not impact Capital Investment.

The following table includes a reconciliation of Cash Flow (as defined in the
Partnership Agreement) to cash flow provided by operating activities as
determined by generally accepted accounting principles ("GAAP"):
<TABLE>
<CAPTION>
                                       For the Years Ended December 31,
                          ---------------------------------------------------------------
                             1997         1996         1995          1994         1993
------------------------------------------------------------------------------------------
<S>                       <C>          <C>          <C>          <C>           <C>
Cash Flow (as defined in
 the Partnership
 Agreement)(a)            $ 2,617,600  $ 3,177,300  $ 3,319,400  $  3,380,200  $3,248,600
Items of reconciliation:
 Discount of principal
  on mortgage loan
  receivable                                             20,000
 Principal payments on
  mortgage loans payable                                              233,100     903,500
 Changes in current
  assets and
  liabilities:
  Decrease (increase) in
   current assets             133,300       (2,700)      48,100        39,700     234,100
  (Decrease) increase in
   current liabilities        (82,600)      91,900      313,700      (205,200)   (380,200)
------------------------------------------------------------------------------------------
Net cash provided by
 operating activities     $ 2,668,300  $ 3,266,500  $ 3,701,200  $  3,447,800  $4,006,000
------------------------------------------------------------------------------------------
Net cash provided by
 (used for) investing
 activities               $   670,400  $(1,469,100) $ 5,880,300  $ 42,840,500  $ (301,500)
------------------------------------------------------------------------------------------
Net cash (used for)
 financing activities     $(2,015,100) $(7,015,900) $(8,689,500) $(48,103,500) $ (363,000)
------------------------------------------------------------------------------------------
</TABLE>
(a) Cash Flow is defined in the Partnership Agreement as Partnership revenues
    earned from operations (excluding tenant deposits and proceeds from the
    sale, disposition or financing of any Partnership properties or the
    refinancing of any Partnership indebtedness), minus all expenses incurred
    (including Operating Expenses, payments of principal and interest on any
    Partnership indebtedness, and any reserves of revenues from operations
    deemed reasonably necessary by the Managing General Partner), except
    depreciation and amortization expenses and capital expenditures and lease
    acquisition expenditures made from Offering proceeds and the General
    Partners' Partnership Management Fee.

The above selected financial data should be read in conjunction with the
financial statements and the related notes appearing on pages A-1 through A-8
in this report and the supplemental schedule on pages A-9 and A-10.

                                                                               6
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The ordinary business of the Partnership is expected to pass through its life
cycle in three phases: (i) the Offering of Units and Investment in Properties;
(ii) the operation of properties and (iii) the sale or other disposition of
properties.

The Partnership commenced the Offering of Units on August 9, 1982, and began
operations on September 2, 1982, after reaching the required minimum
subscription level. In December 1982, the Offering was Terminated upon the sale
of 70,000 Units. From January 1983 to October 1984, the Partnership made six
real property investments and purchased a 50% interest in a joint venture
("Joint Venture") which was formed with an Affiliated partnership for the
purpose of acquiring a 100% interest in certain real property. The Joint
Venture, prior to dissolution, was operated under the common control of the
Managing General Partner. In addition, in April 1986, the Partnership purchased
four mortgage loan investments.

One of the Partnership's objectives is to dispose of its properties when market
conditions allow for the achievement of the maximum possible sales price. In
1992, the Partnership, in addition to being in the operation of properties
phase, entered the disposition phase of its life cycle. During the disposition
phase of the Partnership's life cycle, comparisons of operating results are
complicated due to the timing and effect of property sales and dispositions.
Partnership operating results are generally expected to decline as real
property interests are sold or disposed of since the Partnership no longer
receives income generated from such real property interests. Through December
31, 1997: 1) the Partnership sold or disposed of three of its real property
investments; 2) the Partnership and its affiliate dissolved the Joint Venture
as a result of the sale of the real property investment of the Joint Venture
and 3) all four of the mortgage loan investments were repaid to the
Partnership.

The Managing General Partner is continuing its efforts to sell Old Mill Place
Shopping Center ("Old Mill"). To date, all proposed transactions have been
aborted by potential purchasers. To facilitate the sale of the property, the
Partnership is adjusting its acceptable price downward. As a result of this,
the Partnership has recorded a provision for value impairment of $1,000,000
during the fourth quarter of 1997. The Managing General Partner believes that
it is likely that Old Mill will be sold during 1998, however, there can be no
assurance that a transaction will be completed.

OPERATIONS
The table below is a recap of certain operating results of each of the
Partnership's properties for the years ended December 31, 1997, 1996 and 1995.
The discussion following the table should be read in conjunction with the
Financial Statements and Notes thereto appearing in this report.

<TABLE>
<CAPTION>
                          Comparative Operating Results
                                       (a)
                         For the Years Ended December 31,
                         ----------------------------------
                            1997        1996        1995
------------------------------------------------------------
<S>                      <C>         <C>         <C>
BROOKWOOD METROPLEX OFFICE BUILDINGS I & II
Rental revenues          $2,266,700  $2,402,100  $2,305,800
------------------------------------------------------------
Property net income (b)  $  559,000  $  708,800  $  490,700
------------------------------------------------------------
Average occupancy                97%         99%        100%
------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                          Comparative Operating Results
                                       (a)
                         For the Years Ended December 31,
                         ----------------------------------
                            1997        1996        1995
------------------------------------------------------------
<S>                      <C>         <C>         <C>
OLD MILL PLACE
Rental revenues          $1,068,400  $1,326,400  $1,289,000
------------------------------------------------------------
Property net income (b)  $  661,200  $  891,500  $  523,300
------------------------------------------------------------
Average occupancy                82%         85%         89%
------------------------------------------------------------
WALKER SPRINGS PLAZA SHOPPING CENTER
Rental revenues          $1,127,900  $1,111,300  $1,067,100
------------------------------------------------------------
Property net income      $  566,400  $  566,300  $  541,800
------------------------------------------------------------
Average occupancy               100%        100%        100%
------------------------------------------------------------
TUCKERSTONE COMMONS/ROOKER ROYAL I & II WAREHOUSES
Rental revenues                                  $  348,000
------------------------------------------------------------
Property net income (c)                          $  129,100
------------------------------------------------------------
Average occupancy
------------------------------------------------------------
</TABLE>
(a) Excludes certain income and expense items which are either not directly
    related to individual property operating results such as interest income on
    short-term investments or the mortgage loan receivable and general and
    administrative expenses or are related to properties disposed of by the
    Partnership prior to the periods under comparison.
(b) Property net income excludes provisions for value impairment cumulatively
    totaling $750,000 and $4,000,000 on Brookwood Metroplex Office Building I
    and II ("Brookwood") and Old Mill, respectively, which were included in the
    Statements of Income and Expenses for the years ended December 31, 1997,
    1996 and 1995 (see Note 8 of Notes to Financial Statements for additional
    information).
(c) Tuckerstone Commons/Rooker Royal I & II Warehouses ("Rooker") was sold on
    June 16, 1995. Property net income for 1995 excludes the net gain of
    $868,800 from the sale of the property.

COMPARISON OF THE YEAR ENDED DECEMBER 31, 1997 TO THE YEAR ENDED DECEMBER 31,
1996
Net income for the year ended December 31, 1997 increased by $148,900 when
compared to the year ended December 31, 1996. The increase was primarily due to
a lower provision for value impairment recorded on Old Mill during 1997 than
1996.

Net income exclusive of provisions for value impairment decreased by $551,100
for the year ended December 31, 1997 when compared to the year ended December
31, 1996. The decrease was primarily due to diminished operating results at
Brookwood and Old Mill. Also contributing to the decrease was reduced income
earned on the Partnership's short-term investments due to a decrease in the
amount of funds available for investment, as a result of a special distribution
to Limited Partners in 1996.

Rental revenues decreased by $374,800 or 7.8% for the year ended December 31,
1997 when compared to the year ended December 31, 1996. The decrease was
primarily due to the 1996 receipt of payments in consideration of the early

7
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS--(CONTINUED)

termination of leases at Old Mill. Also contributing to the decrease were lower
tenant expense reimbursements at Brookwood resulting from the finalization of
the 1996 reconciliation of tenant expense reimbursements. It was previously
estimated that Brookwood had underbilled its tenants during 1996, which was to
be payable by the tenants upon reconciliation in 1997. After finalizing the
reconciliation it was determined that the tenants had been overbilled.

Repair and maintenance expenses increased by $45,200 for the periods under
comparison. The increase was primarily due to an increase in cleaning and
landscaping costs at Brookwood.

Real estate tax expense decreased by $30,300 for the year ended December
31,1997 when compared to the year ended December 31, 1996. The decrease was
primarily due to a decrease in real estate taxes at Old Mill which was due to a
decrease in the assessed value.

COMPARISON OF THE YEAR ENDED DECEMBER 31, 1996 TO THE YEAR ENDED DECEMBER 31,
1995
Net income for the year ended December 31, 1996 decreased by $182,400 when
compared to the year ended December 31, 1995. The decrease was primarily due to
the absence of the operating results of Rooker in 1996 as well as the gain
reported on the sale of Rooker in 1995, partially offset by a decrease of
$350,000 in provisions for value impairment from 1995 to 1996.

Net income, exclusive of provisions for value impairment and the operating
results and net gain on sale of Rooker, increased by $465,500 for the year
ended December 31, 1996 when compared to the year ended December 31, 1995. The
increase was primarily due to increases in operating results at the
Partnership's remaining properties together with a decrease in general and
administrative expenses. The decrease in general and administrative expenses
was primarily due to a decrease in printing and mailing costs as well as a
decrease in salaries which was related primarily to a reduction in staff. The
increase was partially offset by a decrease in interest income as a result of a
reduction in the rates available on short-term investments in 1996.

The following comparative discussion includes the operating results of the
Partnership's three remaining property investments.

Rental revenues increased by $194,200 or 4.2% for the year ended December 31,
1996 when compared to the year ended December 31,1995. The primary factor which
caused the increase in rental revenues was the 1996 receipt of payments as
consideration for the early termination of two tenant leases at Old Mill in
order to vacate the premises prior to the expiration of their respective
leases. These tenants have subsequently been replaced by a major new tenant.
This new tenant's lease matures September 30, 2011 and contains one five-year
renewal option. The new tenant began to pay monthly base rent in December 1996
of $5.25 per square foot. The new tenant occupies 53,128 square feet, or
approximately 35% of Old Mill's gross leasable area. In addition, the increase
was also due to an increase in tenant expense reimbursements at Walker Springs
Shopping Center ("Walker Springs") and an increase in the average base rental
rate at Brookwood. The increase was partially offset by a decrease in base
rents at Old Mill due to the short-term vacancy created by the departure of the
above mentioned tenants.

Depreciation and amortization expense decreased by $384,800 for the years under
comparison primarily due to
the fact that effective January 1, 1996, the Partnership discontinued the
recording of depreciation and amortization expense at Old Mill in connection
with classifying the property as held for disposition. In addition,
amortization expense decreased as a result of the 1995 write-off of the
unamortized loan acquisition costs in connection with the early repayment of
the mortgage loan collateralized by Brookwood.

Property operating expenses decreased by $61,800 for the year ended December
31, 1996 when compared to the year ended December 31, 1995. The decrease was
primarily the result of leasing fees paid to outside brokers for Old Mill being
capitalized for financial reporting purposes in 1996 which resulted in lower
1996 property management fee expense as compared to 1995 at Old Mill. In
addition, the decrease was due to a reduction in utility costs at Brookwood
resulting from the departure of a tenant that used an above average amount of
electricity. The decrease was partially offset by an increase in professional
service fees at Old Mill as a result of the early lease terminations and the
costs associated with the replacement of the tenants.

To increase and/or maintain occupancy levels at the Partnership's properties,
the Managing General Partner, through its Affiliated and unaffiliated asset and
property management groups, continues to take the following actions: 1)
implementation of marketing programs, including hiring of third-party leasing
agents or providing on-site leasing personnel, advertising, direct mail
campaigns and development of building brochures; 2) early renewal of existing
tenant leases and addressing any expansion needs these tenants may have; 3)
promotion of local broker events and networking with local brokers; 4)
networking with national level retailers; 5) cold-calling other businesses and
tenants in the market area and 6) providing rental concessions or competitively
pricing rental rates depending on market conditions.

The rate of inflation has remained relatively stable during the years under
comparison and has had a minimal impact on the operating results of the
Partnership. The nature of various tenant lease clauses protects the
Partnership, to some extent, from increases in the rate of inflation. Certain
of the lease clauses provide for the following: (1) annual rent increases based
on the Consumer Price Index or graduated rental increases; (2) percentage
rentals at shopping centers, for which the Partnership receives as additional
rent, a percentage of a tenant's sales over predetermined break-even amounts
and (3) total or partial tenant reimbursement of property operating expenses
(e.g., common area maintenance, real estate taxes, etc.).

LIQUIDITY AND CAPITAL RESOURCES
One of the Partnership's objectives is to dispose of its properties when market
conditions allow for the achievement of the maximum possible sales price. In
the interim, the Partnership continues to manage and maintain its remaining
properties. Notwithstanding the Partnership's intention relative to property
sales, another primary objective of the Partnership is to provide cash
distributions to Partners from Partnership operations. To the extent cumulative
cash distributions exceed net income, such excess distributions will be treated
as a return of capital. Cash Flow (as defined in the Partnership Agreement) is
generally not equal to net income or cash flows as determined by GAAP, since
certain items are treated differently under the Partnership Agreement than
under GAAP. Management believes that to facilitate a

                                                                               8
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS--(CONTINUED)

clear understanding of the Partnership's operations, an analysis of Cash Flow
(as defined in the Partnership Agreement) should be examined in conjunction
with an analysis of net income or cash flows as determined by GAAP. The second
table in Selected Financial Data includes a reconciliation of Cash Flow (as
defined in the Partnership Agreement) to cash flow provided by operating
activities as determined by GAAP and are not indicative of actual distributions
to Partners and should not necessarily be considered as an alternative to the
results disclosed in the Statements of Income and Expenses and Statements of
Cash Flow.

The decrease in Cash Flow (as defined in the Partnership Agreement) of $559,700
for the year ended December 31, 1997 when compared to year ended December 31,
1996 was primarily due to the decrease in net income, exclusive of depreciation
and amortization expense, as previously discussed.

The increase in the Partnership's cash position of $1,323,600 for the year
ended December 31, 1997 was primarily the result of the maturity of the
Partnership's investments in debt securities. Cash provided by operating
activities slightly exceeded amounts expended for capital improvements and
distributions to Partners. Liquid assets, including cash and cash equivalents,
of the Partnership as of December 31, 1997 are comprised of amounts held for
working capital purposes.

Net cash provided by operating activities decreased by $598,200 for the year
ended December 31, 1997 when compared to the year ended December 31, 1996. This
decrease was primarily due to the decrease in net income, as previously
discussed.

Net cash (used for) provided by investing activities changed from $(1,469,100)
for the year ended December 31, 1996 to $670,400 for the year ended December
31, 1997. This change was primarily due to the 1996 investment in and the 1997
maturity of investments in debt securities. The investments in debt securities
was a result of the extension of the maturities of certain of the Partnership's
short-term investments in an effort to maximize the return on these amounts as
they are held for working capital purposes. These investments were of
investment grade and substantially all of them matured less than one year from
their date of purchase.

The Partnership maintains working capital reserves to pay for capital
expenditures such as building and tenant improvements and leasing costs. During
the year ended December 31, 1997, the Partnership spent $405,600 for capital
and tenant improvements and leasing costs. The amount to be spent for building
and tenant improvements and leasing costs during 1998 depends to a large extent
on the retenanting issues at Brookwood and Walker Springs, as further discussed
below. The Managing General Partner believes that ongoing improvements and
leasing costs are necessary in order to increase and/or maintain occupancy
levels in very competitive markets, maximize rental rates charged to new and
renewing tenants and to prepare the remaining properties for disposition.

The Partnership has recently been notified that the tenant occupying
approximately 67% of the rentable square footage at Brookwood does not intend
to exercise its option ("Option") to renew its lease expiring in December 1998.
Market rental rates currently being quoted by competing properties are
greater than the Option rate. Retenanting Brookwood would require a significant
amount of capital and would likely take
an extended period of time. The Managing General Partner is currently
evaluating various options with respect to this property. These include, but
are not limited to: 1) immediately marketing the property for sale; 2) begin
securing new tenants for the property to replace the old tenant upon its lease
expiration and then marketing the property for sale or 3) begin to secure new
tenants for the property, while marketing the property for sale to a buyer that
would be in position to complete the retenanting process.

In September 1997, a tenant occupying 11% of Walker Springs filed for
bankruptcy and in January 1998 turned their space over to a liquidator. In
addition, another tenant occupying 15% of the space at Walker Springs has a
lease expiring on April 30, 1998. This tenant has no options to extend the term
of their lease. The Managing General Partner is currently in discussions with a
potential tenant to occupy both the space to be vacated by the bankrupt tenant
and the space of the tenant whose lease expires on April 30, 1998. There can be
no assurance that the Managing General Partner will be successful in its
efforts to secure this tenant. Results at Walker Springs can be expected to be
adversely impacted during 1998 until a new tenant can be secured to occupy the
available space. The securing of a new tenant(s) could result in substantial
tenant improvement costs.

The decrease in net cash used for financing activities of $5,000,800 for the
year ended December 31, 1997 as compared to the year ended December 31, 1996
was primarily due to the 1996 special distribution of Sale Proceeds of
$3,990,000, along with a decrease in operating distributions to Partners.

The Managing General Partner, on behalf of the Partnership, has contracted for
substantially all of its business activities with certain principal entities
for which computer programs are utilized. Each of these companies is
financially responsible and have represented to management of the Managing
General Partner that they are taking appropriate steps for modifications needed
to their respective systems to accommodate processing data by Year 2000.
Accordingly, the Partnership anticipates incurring no material Year 2000 costs
and is currently not aware of any material contingencies related to this
matter.

The Managing General Partner continues to take a conservative approach to
projections of future rental income in its determination of adequate levels of
cash reserves due to the anticipated capital and tenant improvements and
leasing costs necessary to be made at the Partnership's properties during the
next several years. As a result of this, cash continues to be retained to
supplement working capital reserves. For the year ended December 31, 1997, Cash
Flow (as defined in the Partnership Agreement) retained to supplement working
capital reserves amounted to $595,400.

Distributions to Limited Partners for the quarter ended December 31, 1997 were
declared in the amount of $455,000 or $6.50 per Unit. Cash distributions are
made 60 days after the last day of each fiscal quarter. The amount of future
distributions to Partners will ultimately be dependent upon the performance of
the Partnership's investments as well as the Managing General Partner's
determination of the amount of cash necessary to supplement working capital
reserves to meet future liquidity requirements of the Partnership. Accordingly,
there can be no assurance as to the amounts of cash for future distributions to
Partners.

9
<PAGE>



ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------   -------------------------------------------

The response to this item is submitted as a separate section of this report. See
page A-1, "Index of Financial Statements, Schedule and Exhibits".

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
-------   ---------------------------------------------------------------
          FINANCIAL DISCLOSURE
          --------------------

The Partnership dismissed Grant Thornton, L.L.P. as its independent public
accountants effective April 1, 1996 and engaged Ernst & Young LLP as its new
independent public accountants. There have been no disagreements with the former
accountants on any matter of accounting principle or practice, financial
statement disclosure, or auditing scope or procedure. This event was reported on
Form 8-K dated April 1, 1996, filed on April 3, 1996.


                                      10
<PAGE>

                                   PART III


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
--------  --------------------------------------------------


(a)  &  (e)  DIRECTORS

     The Partnership has no directors. First Capital Financial Corporation
     ("FCFC") is the Managing General Partner. The directors of FCFC, as of
     March 31, 1998, are shown in the table below. Directors serve for one year
     or until their successors are elected. The next annual meeting of FCFC will
     be held in June 1998.


<TABLE>
           Name                                                Office
           ----                                                ------
     <S>                                                      <C>
     Douglas Crocker II....................................   Director
     Sheli Z. Rosenberg....................................   Director
</TABLE>

     Douglas Crocker II, 57, has been President and Chief Executive Officer
     since December 1992 and a Director since January 1993 of the Managing
     General Partner. Mr. Crocker has been President, Chief Executive Officer
     and trustee of Equity Residential Properties Trust since March 31, 1993.
     Mr. Crocker is a member of the Board of Directors of Horizon Group, Inc.
     and Wellsford Real Properties Inc. Mr. Crocker was an Executive Vice
     President of Equity Financial and Management Company ("EFMC") from November
     1992 until March 1997.

     Sheli Z. Rosenberg, 56, was President and Chief Executive Officer of the
     Managing General Partner from December 1990 to December 1992 and has been a
     Director of the Managing General Partner since September 1983; was
     Executive Vice President and General Counsel for EFMC from October 1980 to
     November 1994; has been President and Chief Executive Officer of Equity
     Group Investments, Inc. ("EGI") since November 1994; has been a Director of
     Great American Management and Investment Inc. ("Great American") since June
     1984 and is a director of various subsidiaries of Great American. She is
     also a director of Anixter International Inc., American Classic Voyages
     Co., CVS Corporation, Illinova Corporation, Illinois Power Co., Jacor
     Communications, Inc. and Manufactured Home Communities, Inc. She is also a
     trustee of Equity Residential Properties Trust, Equity Office Properties
     Trust and Capital Trust. Ms. Rosenberg was a Principal of Rosenberg &
     Liebentritt, P.C., counsel to the Partnership, the Managing General Partner
     and certain of their Affiliates from 1980 until September 1997. She had
     been Vice President of First Capital Benefit Administrators, Inc. ("Benefit
     Administrators") since July 22, 1987 until its liquidation in November
     1995. Benefit Administrators filed for protection under the Federal
     Bankruptcy laws on January 3, 1995.


                                      11

<PAGE>


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT - (Continued)
--------  --------------------------------------------------

(b)  &  (e)  EXECUTIVE OFFICERS

     The Partnership does not have any executive officers. The executive
     officers of the Managing General Partner as of March 31, 1998 are shown in
     the table. All officers are elected to serve for one year or until their
     successors are elected and qualified.

<TABLE>
              Name                                       Office
              ----                                       ------
     <S>                                  <C>
     Douglas Crocker II.................. President and Chief Executive Officer
     Donald J. Liebentritt............... Vice President
     Norman M. Field..................... Vice President - Finance and Treasurer
</TABLE>


     PRESIDENT AND CEO- See Table of Directors above.

     Donald J. Liebentritt, 47, has been Vice President of the Managing General
     Partner since July 1997 and is Executive Vice President and General Counsel
     of EGI, Vice President and Assistant Secretary of Great American and
     Principal and Chairman of the Board of Rosenberg & Liebentritt, P.C.

     Norman M. Field, 49, has been Vice President of Finance and Treasurer of
     the Managing General Partner since February 1984, and also served as Vice
     President and Treasurer of Great American from July 1983 until March 1995.
     Mr. Field had been Treasurer of Benefit Administrators since July 22, 1987
     until its liquidation in November 1995. Benefit Administrators filed for
     protection under the Federal Bankruptcy laws on January 3, 1995. He was
     Chief Financial Officer of Equality Specialties, Inc. ("Equality"), a
     subsidiary of Great American, from August 1994 to April 1995. Equality was
     sold in April 1995.

(d)  FAMILY RELATIONSHIPS

     There are no family relationships among any of the foregoing directors and
     officers.

(f)  INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

     With the exception of the bankruptcy matter disclosed under Items 10 (a),
     (b) and (e), there are no involvements in certain legal proceedings among
     any of the foregoing directors and officers.


                                      12

<PAGE>

ITEM 11.  EXECUTIVE COMPENSATION
--------  ----------------------

(a,b,c & d) As stated in Item 10, the Partnership has no officers or directors.
Neither the Managing General Partner, nor any director or officer of the
Managing General Partner, received any direct remuneration from the Partnership
during the year ended December 31, 1997. However, the Managing General Partner
and its Affiliates do compensate its directors and officers. For additional
information see Item 13 (a) Certain Relationships and Related Transactions.

(e)  None.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------  --------------------------------------------------------------

(a)  As of March 1, 1998, no person of record owned or was known by the
     Partnership to own beneficially more than 5% of the Partnership's 70,000
     Units then outstanding.

(b)  The Partnership has no directors or executive officers. As of March 1,
     1998, none of the executive officers and directors of the Managing General
     Partner owned any Units.

(c)  None.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------  ----------------------------------------------

(a)  Affiliates of the Managing General Partner, provide leasing, property
     management and supervisory services to the Partnership. Compensation for
     these property management services may not exceed 6% of the gross receipts
     from the property being managed, plus normal out-of-pocket expenses where
     the General Partners or Affiliates provide leasing, re-leasing and leasing
     related services, or 3% of gross receipts where the General Partners or
     Affiliates do not perform leasing, re-leasing and leasing related services
     for a particular property. For the year ended December 31, 1997, these
     Affiliates were entitled to leasing, property management and supervisory
     fees of $142,600. In addition, other Affiliates of the Managing General
     Partner were entitled to fees, compensation and reimbursements of $72,900
     for insurance and personnel and other services. Compensation for these
     services are on terms which are fair, reasonable and no less favorable to
     the Partnership than reasonably could have been obtained from unaffiliated
     persons. Of these amounts, a total of $1,000 was due to Affiliates and
     $10,700 was due from Affiliates as of December 31, 1997.

     In addition, as of December 31, 1997, $37,700 was due to the Managing
     General Partner for real estate commissions earned in connection with the
     sale of five of the buildings comprising a portion of Atlanta Gateway.
     These commissions have been accrued but not paid. In accordance with the
     Partnership Agreement, these commissions will not be paid until such time
     as Limited Partners have received cumulative distributions of Sale or
     Refinancing Proceeds equal to 100% of their Original Capital Contribution
     plus a cumulative return (including all Cash Flow (as defined in the
     Partnership Agreement) which has been distributed to the Limited Partners
     from the initial date of investment) of 6% simple interest per annum on
     their Capital Investment.

     In accordance with the Partnership Agreement, subsequent to December 23,
     1982, the Termination of the Offering, the General Partners are entitled to
     10% of Cash Flow (as defined in the Partnership Agreement), as a
     Partnership Management Fee. Net Profits (exclusive of Net Profits from the
     sale or disposition of Partnership properties) are allocated: first, to the
     General Partners, in an amount equal to the greater of the General
     Partners' Partnership Management Fee for such fiscal year, or 1% of such
     Net Profits; and second, the balance, if any, to the Limited


                                      13
<PAGE>

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS (Continued)
--------  ----------------------------------------------

     Partners. Net Profits from the sale or disposition of a Partnership
     property are allocated: first, to the General Partners and the Limited
     Partners with negative balances in their capital accounts, pro rata in
     proportion to such respective negative balances, to the extent of the total
     of such negative balances; second, to the General Partners, in an amount
     necessary to make the aggregate amount of their capital accounts equal to
     the greater of the Sale or Refinancing Proceeds to be distributed to the
     General Partners with respect to the sale or disposition of such property
     or 1% of such Net Profits; and third, the balance, if any, to the Limited
     Partners. Net Losses (exclusive of Net Losses from the sale, disposition or
     provision for value impairment of Partnership properties) are allocated 1%
     to the General Partners and 99% to the Limited Partners. Net Losses from
     the sale, disposition or provision for value impairment of Partnership
     properties are allocated: first, to the extent that the balance in the
     General Partners' capital accounts exceeds their Capital Investment or the
     balance in the capital accounts of the Limited Partners exceeds the amount
     of their Capital Investment (the "Excess Balances"), to the General
     Partners and the Limited Partners pro rata in proportion to such Excess
     Balances until such Excess Balances are reduced to zero; second, to the
     General Partners and the Limited Partners pro rata in proportion to the
     balances in their respective capital accounts until the balances in their
     capital accounts shall be reduced to zero; and third, the balance, if any,
     99% to the Limited Partners and 1% to the General Partners. In all events
     there shall be allocated to the General Partners not less than 1% of Net
     Profits and Net Losses from the sale, disposition or provision for value
     impairment of a Partnership property. For the year ended December 31, 1997,
     the General Partners were paid $202,200 of Cash Flow (as defined in the
     Partnership Agreement), and allocated Net Profits of $202,200.

     Revco D. S., Inc. ("Revco"), a drug store company, which was 19% owned by
     Zell Chilmark Fund, L.P. ("Chilmark"), an Affiliate of the Managing General
     Partner is obligated to the Partnership under a lease for store space at
     Walker Springs Plaza Shopping Center. During the year ended December 31,
     1997, Chilmark disposed of their interest in Revco. The per square foot
     rent paid by Revco, at the inception of its lease, is comparable to that
     paid by other tenants at this property.

(b)  Rosenberg & Liebentritt, P.C. ("Rosenberg"), serves as legal counsel to the
     Partnership, the Managing General Partner and certain of their Affiliates.
     Donald J. Liebentritt, Vice President of the Managing General Partner, is a
     Principal and Chairman of the Board of Rosenberg. For the year ended
     December 31, 1997, Rosenberg was entitled to $24,100 for legal fees from
     the Partnership. As of December 31, 1997, $200 was due to Rosenberg.
     Compensation for these services are on terms which are fair, reasonable and
     no less favorable to the Partnership than reasonably could be obtained from
     unaffiliated persons.

(c)  No management person is indebted to the Partnership.

(d)  None.

                                      14
<PAGE>

                                    PART IV


ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
--------  ----------------------------------------------------------------


(a,c & d)  See Index of Financial Statements, Schedule and Exhibits on page A-1
of Form 10-K.

(b)  Reports on Form 8-K:

There were no reports filed on Form 8-K for the quarter ended December 31, 1997.



                                      15

<PAGE>

                                  SIGNATURES


     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.


                           FIRST CAPITAL INCOME PROPERTIES, LTD. - VIII


                           BY:  FIRST CAPITAL FINANCIAL CORPORATION
                                MANAGING GENERAL PARTNER


Dated:   March 31, 1998    By:  /s/         DOUGLAS CROCKER II
       -----------------        -----------------------------------------------
                                            DOUGLAS CROCKER II
                                    President and Chief Executive Officer


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.


s/  DOUGLAS CROCKER II     March 31, 1998   President, Chief Executive Officer
--------------------------  --------------   and Director of the Managing
     DOUGLAS CROCKER II                      General Partner

/s/  SHELI Z. ROSENBERG     March 31, 1998   Director of the Managing General
--------------------------  --------------   Partner
     SHELI Z. ROSENBERG

/s/  DONALD J. LIEBENTRITT  March 31, 1998   Vice President
--------------------------  --------------
     DONALD J. LIEBENTRITT

/s/  NORMAN M. FIELD        March 31, 1998   Vice President - Finance and
--------------------------  --------------   Treasurer
     NORMAN M. FIELD


                                      16

<PAGE>


             INDEX OF FINANCIAL STATEMENTS, SCHEDULE AND EXHIBITS

               FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT

<TABLE>
<CAPTION>
                                                                       Pages
                                                                   -------------
<S>                                                                     <C>
Reports of Independent Auditors                                     A-2 and A-3

Balance Sheets as of December 31, 1997 and 1996                         A-4

Statements of Partners' Capital for the Years Ended
  December 31, 1997, 1996 and 1995                                      A-4

Statements of Income and Expenses for the Years
  Ended December 31, 1997, 1996 and 1995                                A-5

Statements of Cash Flows for the Years Ended
  December 31, 1997, 1996 and 1995                                      A-5

Notes to Financial Statements                                       A-6 to A-8

SCHEDULE FILED AS PART OF THIS REPORT

III - Real Estate and Accumulated Depreciation as of
  December 31, 1997                                                A-9 and A-10
</TABLE>

All other schedules have been omitted as inapplicable, or for the reason that
the required information is shown in the financial statements or notes thereto.

EXHIBITS FILED AS PART OF THIS REPORT

EXHIBITS (3 & 4) First Amended and Restated Certificate and Agreement of
Limited Partnership as set forth on pages A-1 through A-30 of the Partnership's
definitive Prospectus dated July 28, 1982; Registration Statement No. 2-78064,
filed pursuant to Rule 424 (b), is incorporated herein by reference.

EXHIBIT (10) Material Contracts

(a)  Lease agreement for a tenant at Old Mill, whose revenues exceeded 10% of
     Old Mill's 1997 budgeted rental revenues as filed with Form 10-K for the
     year ended December 31, 1996 is incorporated herein by reference.

EXHIBIT (13) Annual Report to Security Holders

The 1996 Annual Report to Limited Partners is being sent under separate cover,
not as a filed document and not via EDGAR, for the information of the
Commission.

EXHIBIT (27) Financial Data Schedule


                                      A-1
<PAGE>


                        REPORT OF INDEPENDENT AUDITORS

Partners
First Capital Income Properties, Ltd.--Series VIII
Chicago, Illinois

We have audited the accompanying balance sheets of First Capital Income
Properties, Ltd. - Series VIII as of December 31, 1997 and 1996, and the related
statements of income and expenses, partners' capital and cash flows for the
years then ended, and the financial statement schedule listed in the
accompanying index. These financial statements and schedule are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of First Capital Income
Properties, Ltd.--Series VIII at December 31, 1997, and 1996, and the results of
its operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles. Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.


                                        Ernst & Young LLP


Chicago, Illinois
March 9, 1998

                                      A-2
<PAGE>


              REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Partners
First Capital Income Properties, Ltd.--Series VIII
Chicago, Illinois


We have audited the statements of income and expenses, Partner's Capital and
cash flows of First Capital Income Properties, Ltd.--Series VIII for the year
ended December 31, 1995. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provided a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations of First Capital Income
Properties, Ltd.--Series VIII and its cash flows for the year ended December 31,
1995 in conformity with generally accepted accounting principles. We have also
audited the 1995 information in Schedule III of First Capital Income Properties,
Ltd.--Series VIII. In our opinion, this schedule presents fairly, in all
material respects, the 1995 information required to be set forth therein.


                                                    Grant Thornton LLP


Chicago, Illinois
February  15, 1996

                                      A-3
<PAGE>

BALANCE SHEETS
December 31, 1997 and 1996
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                                    1997         1996
--------------------------------------------------------------------------
<S>                                              <C>          <C>
ASSETS
Investment in commercial rental properties:
 Land                                            $ 6,086,700  $ 6,086,700
 Buildings and improvements                       27,622,800   28,217,200
--------------------------------------------------------------------------
                                                  33,709,500   34,303,900
Accumulated depreciation and amortization        (12,642,700) (11,934,300)
--------------------------------------------------------------------------
 Total investment properties, net of accumulated
  depreciation and amortization                   21,066,800   22,369,600
Cash and cash equivalents                          5,353,200    4,029,600
Investments in debt securities                                  1,076,000
Rents receivable                                     123,400      261,700
Other assets                                          14,500        9,500
--------------------------------------------------------------------------
                                                 $26,557,900  $27,746,400
--------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
 Accounts payable and accrued expenses           $   620,100  $   567,600
 Due to Affiliates                                    28,200      130,200
 Security deposits                                    58,300       51,200
 Distributions payable                               505,600      505,600
 Other liabilities                                    32,700       65,800
--------------------------------------------------------------------------
                                                   1,244,900    1,320,400
--------------------------------------------------------------------------
Partners' capital:
 General Partners (deficit)                          (27,000)     (17,000)
 Limited Partners (70,000 Units issued and
  outstanding)                                    25,340,000   26,443,000
--------------------------------------------------------------------------
                                                  25,313,000   26,426,000
--------------------------------------------------------------------------
                                                 $26,557,900  $27,746,400
--------------------------------------------------------------------------
</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the years ended December 31, 1997, 1996 and 1995
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                            General     Limited
                                            Partners   Partners       Total
-------------------------------------------------------------------------------
<S>                                         <C>       <C>          <C>
Partners' capital, January 1, 1995          $178,000  $39,918,500  $40,096,500
Net income for the year ended December 31,
 1995                                        167,000      775,700      942,700
Distributions for the year ended December
 31, 1995                                   (345,000)  (8,355,200)  (8,700,200)
-------------------------------------------------------------------------------
Partners' capital, December 31, 1995             --    32,339,000   32,339,000
Net income for the year ended December 31,
 1996                                        251,300      509,000      760,300
Distributions for the year ended December
 31, 1996                                   (268,300)  (6,405,000)  (6,673,300)
-------------------------------------------------------------------------------
Partners' (deficit) capital, December 31,
 1996                                        (17,000)  26,443,000   26,426,000
Net income for the year ended December 31,
 1997                                        192,200      717,000      909,200
Distributions for the year ended December
 31, 1997                                   (202,200)  (1,820,000)  (2,022,200)
-------------------------------------------------------------------------------
Partners' (deficit) capital, December 31,
 1997                                       $(27,000) $25,340,000  $25,313,000
-------------------------------------------------------------------------------
</TABLE>
    The accompanying notes are an integral part of the financial statements.
A-4
<PAGE>

STATEMENTS OF INCOME AND EXPENSES
For the years ended December 31, 1997, 1996 and 1995
(All dollars rounded to nearest 00s except per Unit amounts)

<TABLE>
<CAPTION>
                                                 1997       1996       1995
------------------------------------------------------------------------------
<S>                                           <C>        <C>        <C>
Income:
 Rental                                       $4,464,600 $4,839,400 $4,993,200
 Interest on short-term investments              282,100    470,800    640,200
 Interest on mortgage loan receivable                                   16,300
 Gain on sale of property                                              868,800
------------------------------------------------------------------------------
                                               4,746,700  5,310,200  6,518,500
------------------------------------------------------------------------------
Expenses:
 Depreciation and amortization                   708,400    717,000  1,195,500
 Property operating:
  Affiliates                                     159,200    338,300    359,300
  Nonaffiliates                                  761,800    583,600    686,600
 Real estate taxes                               480,100    510,400    536,500
 Insurance--Affiliate                             44,800     48,700     52,500
 Repairs and maintenance                         522,100    476,900    495,800
 General and administrative:
  Affiliates                                      32,700     40,100     51,400
  Nonaffiliates                                  128,400    134,900    148,200
 Provisions for value impairment               1,000,000  1,700,000  2,050,000
------------------------------------------------------------------------------
                                               3,837,500  4,549,900  5,575,800
------------------------------------------------------------------------------
Net income                                    $  909,200 $  760,300 $  942,700
------------------------------------------------------------------------------
Net income allocated to General Partners      $  192,200 $  251,300 $  167,000
------------------------------------------------------------------------------
Net income allocated to Limited Partners      $  717,000 $  509,000 $  775,700
------------------------------------------------------------------------------
Net income allocated to Limited Partners per
 Unit (70,000 Units outstanding)              $    10.24 $     7.27 $    11.08
------------------------------------------------------------------------------
</TABLE>

STATEMENTS OF CASH FLOWS
For the years ended December 31, 1997, 1996 and 1995
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                                  1997        1996        1995
----------------------------------------------------------------------------------
<S>                                            <C>         <C>         <C>
Cash flows from operating activities:
 Net income                                    $  909,200  $  760,300  $  942,700
 Adjustments to reconcile net income to net
  cash provided by operating activities:
  Depreciation and amortization                   708,400     717,000   1,195,500
  (Gain) on sale of property                                             (868,800)
  Provisions for value impairment               1,000,000   1,700,000   2,050,000
  Discount of principal on mortgage loan
   receivable                                                              20,000
  Changes in assets and liabilities:
   Decrease (increase) in rents receivable        138,300      (6,400)      4,400
   (Increase) decrease in other assets             (5,000)      3,700      43,700
   Increase (decrease) in accounts payable
    and accrued expenses                           52,500      (4,700)    334,400
   (Decrease) increase in due to Affiliates      (102,000)     63,600     (48,600)
   (Decrease) increase in other liabilities       (33,100)     33,000      27,900
----------------------------------------------------------------------------------
    Net cash provided by operating activities   2,668,300   3,266,500   3,701,200
----------------------------------------------------------------------------------
Cash flows from investing activities:
 Payments for capital and tenant improvements    (405,600)   (393,100)   (327,600)
 Decrease (increase) in investments in debt
  securities                                    1,076,000  (1,076,000)
 Proceeds from the sale of property                                     5,163,900
 Proceeds from retirement of mortgage loan
  receivable                                                            1,044,000
----------------------------------------------------------------------------------
    Net cash provided by (used for) investing
     activities                                   670,400  (1,469,100)  5,880,300
----------------------------------------------------------------------------------
Cash flows from financing activities:
 Distributions paid to Partners                (2,022,200) (7,003,900) (8,641,900)
 Increase (decrease) in security deposits           7,100     (12,000)    (47,600)
----------------------------------------------------------------------------------
    Net cash (used for) financing activities   (2,015,100) (7,015,900) (8,689,500)
----------------------------------------------------------------------------------
Net increase (decrease) in cash and cash
 equivalents                                    1,323,600  (5,218,500)    892,000
Cash and cash equivalents at the beginning of
 the year                                       4,029,600   9,248,100   8,356,100
----------------------------------------------------------------------------------
Cash and cash equivalents at the end of the
 year                                          $5,353,200  $4,029,600  $9,248,100
----------------------------------------------------------------------------------
</TABLE>
    The accompanying notes are an integral part of the financial statements.
                                                                             A-5
<PAGE>

NOTES TO FINANCIAL STATEMENTS
December 31, 1997

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

DEFINITION OF SPECIAL TERMS:
Capitalized terms used in this report have the same meaning as those terms have
in the Partnership's Registration Statement filed with the Securities and
Exchange Commission on Form S-11. Definitions of these terms are contained in
Article III of the First Amended and Restated Certificate and Agreement of
Limited Partnership, which is included in the Registration Statement and
incorporated herein by reference.

ORGANIZATION:
The Partnership was formed on June 3, 1982, by the filing of a Certificate and
Agreement of Limited Partnership with the Department of State of the State of
Florida, and commenced the Offering of Units on August 9, 1982. The Certificate
and Agreement, as amended and restated, authorized the sale to the public of
60,000 Units (with the Managing General Partner's option to increase the
Offering to 70,000 Units) and not less than 1,250 Units. On September 2, 1982,
the required minimum subscription level was reached and the Partnership's
operations commenced. The Managing General Partner exercised its option to
increase the Offering to 70,000 Units, which amount was sold prior to the
Termination of the Offering on December 23, 1982. The Partnership was formed to
invest primarily in existing, improved, income-producing commercial real estate
and, to a lesser extent, in other types of investment vehicles such as mortgage
loans.

The Partnership Agreement provides that the Partnership will be dissolved on or
before December 31, 2013. The Limited Partners, by a majority vote, may
dissolve the Partnership at any time.

ACCOUNTING POLICIES:
The financial statements have been prepared in accordance with generally
accepted accounting principles ("GAAP"). The Partnership utilizes the accrual
method of accounting. Under this method, revenues are recorded when earned and
expenses are recorded when incurred.

Preparation of the Partnership's financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

The Partnership is not liable for federal income taxes as the Partners
recognize their proportionate share of the Partnership income or loss in their
individual tax returns; therefore, no provision for income taxes is made in the
financial statements of the Partnership. In addition, it is not practicable for
the Partnership to determine the aggregate tax bases of the individual
Partners; therefore, the disclosure of the differences between the tax bases
and the reported assets and liabilities of the Partnership would not be
meaningful.

Commercial rental properties held for investment are recorded at cost, net of
any provisions for value impairment, and depreciated (exclusive of amounts
allocated to land) on the straight-line method over their estimated useful
lives. Upon classifying a commercial rental property as held for disposition,
no depreciation or amortization of such property is provided in the financial
statements. Lease acquisition fees are recorded at cost and amortized over the
life of the lease. Repair and maintenance costs are expensed as incurred;
expenditures for improvements are capitalized and depreciated over the
estimated life of such improvements.

The Partnership evaluates its rental properties for impairment when conditions
exist which may indicate that it is probable that the sum of expected cash
flows (undiscounted) from a property is less than its estimated carrying basis.
Upon determination that an impairment has occurred, the carrying basis in the
rental property is reduced to its estimated fair market value. Except as
disclosed in Note 8, the Managing General Partner was not aware of any
indicator that would result in a significant impairment loss during the periods
reported.

Cash equivalents are considered all highly liquid investments with maturity of
three months or less when purchased.

Investments in debt securities as of December 31, 1996 were comprised of
corporate debt securities and were classified as held-to-maturity. These
investments were carried at their amortized cost basis in the financial
statements which approximated fair market value at December 31, 1996. All of
these securities had maturities of less than one year when purchased.

Property sales are recorded when title transfers and sufficient consideration
has been received by the Partnership. Upon disposition, the related costs and
accumulated depreciation are removed from the respective accounts. Any gain or
loss on sale is recognized in accordance with GAAP.

The Partnership's financial statements include financial instruments, including
receivables and trade liabilities. The fair value of financial instruments,
including cash and cash equivalents, was not materially different from their
carrying value at December 31, 1997 and 1996.

2. RELATED PARTY TRANSACTIONS:

In accordance with the Partnership Agreement, subsequent to December 23, 1982,
the Termination of the Offering, the General Partners are entitled to 10% of
Cash Flow (as defined in the Partnership Agreement), as a Partnership
Management Fee. Net Profits (exclusive of Net Profits from the sale or
disposition of Partnership properties) are allocated: first, to the General
Partners, in an amount equal to the greater of the General Partners'
Partnership Management Fee for such fiscal year, or 1% of such Net Profits; and
second, the balance, if any, to the Limited Partners. Net Profits from the sale
or disposition of a Partnership property are allocated: first, to the General
Partners and the Limited Partners with negative balances in their capital
accounts, pro rata in proportion to such respective negative balances, to the
extent of the total of such negative balances; second, to the General Partners,
in an amount necessary to make the aggregate amount of their capital accounts
equal to the

A-6
<PAGE>

greater of the Sale or Refinancing Proceeds to be distributed to the General
Partners with respect to the sale or disposition of such property or 1% of such
Net Profits; and third, the balance, if any, to the Limited Partners. Net
Losses (exclusive of Net Losses from the sale, disposition or provision for
value impairment of Partnership properties) are allocated 1% to the General
Partners and 99% to the Limited Partners. Net Losses from the sale, disposition
or provision for value impairment of Partnership properties are allocated:
first, to the extent that the balance in the General Partners' capital accounts
exceeds their Capital Investment or the balance in the capital accounts of the
Limited Partners exceeds the amount of their Capital Investment (the "Excess
Balances"), to the General Partners and the Limited Partners pro rata in
proportion to such Excess Balances until such Excess Balances are reduced to
zero; second, to the General Partners and the Limited Partners pro rata in
proportion to the balances in their respective capital accounts until the
balances in their capital accounts shall be reduced to zero; and third, the
balance, if any, 99% to the Limited Partners and 1% to the General Partners. In
all events there shall be allocated to the General Partners not less than 1% of
Net Profits and Net Losses from the sale, disposition or provision for value
impairment of a Partnership property. For the year ended December 31, 1997, the
General Partners were paid $202,200 of Cash Flow (as defined in the Partnership
Agreement) and allocated Net Profits of $192,200, which included a (loss) from
provision for value impairment of $(10,000). For the year ended December 31,
1996, the General Partners were paid Cash Flow (as defined in the Partnership
Agreement) of $268,300, and were allocated Net Profits of $251,300, which
included a (loss) from provision for value impairment of $(17,000). For the
year ended December 31, 1995, the General Partners were paid Cash Flow (as
defined in the Partnership Agreement) of $345,000 and allocated Net Profits of
$167,000, which included a Net Profit from the sale of a Partnership property
of $8,700 and (losses) from provisions for value impairment of $(186,700).

Fees and reimbursements paid and payable/(receivable) by the Partnership
to/(from) Affiliates for the years ended December 31, 1997, 1996 and 1995 were
as follows:

<TABLE>
<CAPTION>
                               1997               1996              1995
                         -----------------  ----------------- ----------------
                           Paid   Payable     Paid   Payable    Paid   Payable
------------------------------------------------------------------------------
<S>                      <C>      <C>       <C>      <C>      <C>      <C>
Property management and
 leasing fees            $240,100 $(10,700) $254,100 $ 86,800 $392,700 $17,900
Real estate commission
 (a)                         None   37,700      None   37,700     None  37,700
Reimbursements of
 property insurance
 premiums, at cost         44,800     None    48,700     None   52,600    None
Legal                      25,500      200    25,000    1,600   44,700    None
Reimbursements of
 expenses at cost:
 --Accounting              23,300      900    33,300    3,800   27,200   7,900
 --Investor
  communication             7,900      100     8,200      300   15,200   1,500
 --Mortgage servicing        None     None      None     None     None   1,600
------------------------------------------------------------------------------
                         $341,600 $ 28,200  $369,300 $130,200 $532,400 $66,600
------------------------------------------------------------------------------
</TABLE>

(a) As of December 31, 1997, the Partnership owed $37,700 to the Managing
    General Partner for real estate commissions earned in connection with the
    sale of five of the warehouses comprising a portion of the Atlanta Gateway
    Park Industrial Center. These commissions have been accrued but not paid.
    In accordance with the Partnership Agreement, the Partnership will not pay
    the General Partners or any Affiliates a real estate commission from the
    sale of a Partnership property until Limited Partners have received
    cumulative distributions of Sale or Refinancing Proceeds equal to 100% of
    their Original Capital Contribution, plus a cumulative return (including
    all Cash Flow, as defined in the Partnership Agreement, which has been
    distributed to the Limited Partners from the initial date of investment) of
    6% simple interest per annum on their Capital Investment.

On-site property management for the Partnership's properties is provided by an
Affiliate of the Managing General Partner and an third-party property
management group for fees equal to 3% of gross rents received from the
properties. The Affiliate and the third-party property management group are
entitled to leasing fees equal to 3% of gross rents received from the
properties, reduced by leasing fees, if any, paid to third parties.

Revco D. S., Inc. ("Revco"), a drug store company, which was 19% owned by Zell
Chilmark Fund, L.P. ("Chilmark"), an Affiliate of the Managing General Partner,
is obligated to the Partnership under a lease for store space at Walker Springs
Plaza Shopping Center. During the year ended December 31, 1997 Chilmark
disposed of its interest in Revco. The per square foot rent required of Revco
at the inception of its lease was comparable to that of other tenants at this
property.

3. INVESTMENT IN MORTGAGE LOAN RECEIVABLE:

On April 30, 1986, the Partnership acquired a first mortgage loan with an
aggregate outstanding principal balance of $1,064,000. The loan was purchased
at a discount of $50,700, which amount was amortized over the life of the loan.
On February 24, 1995, the Partnership received $1,060,300, including $16,300 in
accrued interest from January 1, 1995 less a discount of $20,000, in full
satisfaction of this mortgage loan receivable.

4. FUTURE MINIMUM RENTALS:

Future minimum rental income due on noncancelable leases as of December 31,
1997 were as follows:

<TABLE>
                    <S>         <C>
                    1998        $ 3,347,500
                    1999          1,687,400
                    2000          1,348,900
                    2001            999,100
                    2002            809,700
                    Thereafter    3,278,700
                             --------------
                                $11,471,300
                             --------------
</TABLE>

                                                                             A-7
<PAGE>

The Partnership is subject to the usual business risks associated with the
collection of the above-scheduled rentals. In addition to the amounts scheduled
above, the Partnership expects to receive rental revenue from operating expense
and real estate tax reimbursements and percentage rents. Percentage rents
earned for the years ended December 31, 1997, 1996 and 1995 were $10,200,
$21,900 and $7,300, respectively.

5. INCOME TAX:

The Partnership utilizes the accrual method of accounting for both income tax
reporting and financial statement purposes. Financial statement results will
differ from income tax results due to differing depreciation lives and methods,
the recognition of rents received in advance as taxable income, the use of
differing methods in computing the gain on sale of property for financial
statement purposes and provisions for value impairment. The net effect of these
differences for the year ended December 31, 1997, was that the net income for
tax reporting purposes was less than the net income for financial statement
purposes by $280,600. The aggregate cost of commercial rental properties for
federal income tax purposes at December 31, 1997 was $38,459,500.

6. PROPERTY SALE:

On June 16, 1995, the Partnership sold its interest in the Tuckerstone
Commons/Rooker Royal I & II Warehouses, located in Atlanta, Georgia, for a sale
price of $5,300,000. The Partnership incurred selling expenses of $136,100,
including $21,500 in legal expenses paid to an Affiliate of the Managing
General Partner. The Partnership received net sale proceeds of $5,163,900. The
net gain reported by the Partnership for financial statement purposes was
$868,800.

The above sale was an all-cash transaction, with no further involvement on the
part of the Partnership.

7. ASSET HELD FOR DISPOSITION:

During 1996, the Managing General Partner determined that it was in the best
interest of the Partnership to sell Old Mill Shopping Center ("Old Mill").
Accordingly, the Partnership classified Old Mill as held for disposition
effective on January 1, 1996. The Managing General Partner believes that a sale
will be consummated during 1998. The carrying basis, net of accumulated
depreciation and amortization, of Old Mill on the Partnership's Balance Sheet
as of December 31, 1997 was $5,994,500 and does not exceed the estimated fair
value, less costs to sell. Net income for Old Mill, included in the
Partnership's Statement of Income and Expenses, for the year ended December 31,
1997 was $661,200, which is exclusive of a $1,000,000 provision for value
impairment. In conjunction with classifying this property as held for
disposition, no depreciation expense was recorded during the years ended
December 31, 1996 and 1997. The Managing General Partner believes that it is
likely that Old Mill will be sold during 1998, however, there can no assurance
that a transaction will be completed.

8. PROVISIONS FOR VALUE IMPAIRMENT:

Efforts to sell Old Mill during 1997 and 1996 indicated that additional price
concessions would be necessary to successfully complete a transaction.
Accordingly, the Partnership adjusted the carrying basis of the property by
recording provisions for value impairment of $1,000,000 and $1,700,000 during
the fourth quarter of 1997 and 1996, respectively.

During 1995, the Partnership, recognizing depressed economic conditions in the
retail industry, together with regional and specific factors affecting the
Partnership's properties, adjusted the carrying bases of Old Mill and Brookwood
through the recording of provisions for value impairment of $1,300,000 and
$750,000, respectively.

Provisions for value impairment were considered non-cash events for the
purposes of the Statements of Cash Flow and were not utilized in the
determination of Cash Flow (as defined in the Partnership Agreement). The
provisions for value impairment were material fourth quarter adjustments
pursuant to Accounting Principles Board Opinion No. 28, "Interim Financial
Reporting". No other material adjustments were made in the fourth quarter.
A-8
<PAGE>

              FIRST CAPITAL INCOME PROPERTIES, LTD. - SERIES VIII

            SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
                            AS OF DECEMBER 31, 1997

<TABLE>
<CAPTION>

    Column A                        Column C                   Column D                         Column E
------------------         -------------------------   ------------------------- --------------------------------------


                                Initial cost              Costs capitalized               Gross amount at which
                              to Partnership (1)       subsequent to acquisition        carried at close of period
                           -------------------------   ------------------------- --------------------------------------
                                           Buildings                                          Buildings
                                             and                                                 and
                                           Improve-      Improve-  Carrying                    Improve-
   Description                 Land         ments         ments    Costs (2)        Land        ments       Total (3)(4)
------------------         -----------  ------------   ----------  ---------     ----------   -----------   ------------
<S>                        <C>          <C>            <C>         <C>           <C>          <C>           <C>
Shopping Centers:
----------------

Old Mill Place
  Shopping Center
  (San Antonio, TX)        $ 2,475,900  $ 10,385,400   $  779,800  $ 130,800     $2,100,800   $ 7,671,100   $  9,771,900 (5)

Walker Springs Plaza
  Shopping Center
  (Knoxville, TN)            1,756,800     4,440,200    1,148,800     98,400      1,784,700     5,659,500      7,444,200

Office Buildings:
----------------

Brookwood Metroplex
  Office Buildings I & II
  (Birmingham, AL)           2,188,100    11,595,100    3,379,000     81,200      2,201,200    14,292,200     16,493,400 (5)
                           -----------  ------------  -----------  ---------     ----------   -----------   ------------
                           $ 6,420,800  $ 26,420,700  $ 5,307,600  $ 310,400     $6,086,700   $27,622,800   $ 33,709,500
                           ===========  ============  ===========  =========     ==========   ===========   ============
</TABLE>

Column B - Not Applicable.

<TABLE>
<CAPTION>
    Column A                              Column F   Column G    Column H       Column I
------------------                      ----------- -----------  --------     -------------
                                                                                 Life on
                                                                                  which
                                                                                 deprecia-
                                                                               tion in lat-
                                          Accumu-                               est income
                                           lated      Date of                   statements
                                         Deprecia-   construc-     Date           is com-
   Description                            tion (3)     tion      Acquired          puted
------------------                      -----------  ----------  --------      ------------

Shopping Centers:
-----------------
<S>                                     <C>          <C>         <C>           <C>
Old Mill Place
  Shopping Center                                                                 35 (6)
  (San Antonio, TX)                     $ 3,777,500  1980 - 81   Sept. 1983      2 - 11 (7)

Walker Springs Plaza
  Shopping Center                                                                 35 (6)
  (Knoxville, TN)                         2,276,000    1972      Dec. 1983       3 - 7 (7)

Office Buildings:
----------------

Brookwood Metroplex
  Office Buildings I & II                                                         35 (6)
  (Birmingham, AL)                        6,589,200    1975      Aug. 1983       2 - 13 (7)
                                        -----------
                                        $12,642,700
                                        ===========
</TABLE>
Column B - Not Applicable.

                 See accompanying notes on the following page.

                                      A-9

<PAGE>


              FIRST CAPITAL INCOME PROPERTIES, LTD. - SERIES VIII

                             NOTES TO SCHEDULE III


Note 1.   Amounts presented are net of rent guarantees.

Note 2.   Consists of legal fees, appraisal fees, title costs and other related
          professional fees.

Note 3.   The following is a reconciliation of activity in Columns E and F.

<TABLE>
<CAPTION>
                                                 December 31, 1997             December 31, 1996             December 31, 1995
                                            ---------------------------   ---------------------------   ---------------------------
                                                           Accumulated                   Accumulated                   Accumulated
                                                Cost       Depreciation       Cost       Depreciation       Cost       Depreciation
                                            ------------   ------------   ------------   ------------   ------------   ------------
<S>                                         <C>            <C>            <C>            <C>            <C>            <C>
Balance at the beginning of the year        $ 34,303,900   $ 11,934,300   $ 35,610,800   $ 11,217,400   $ 43,457,400   $ 11,909,800

Additions during the year:

Improvements                                     405,600                       393,100                       327,600

Provision for depreciation                                      708,400                       716,900                     1,136,700

Deductions during the year:

Basis of disposed real property                                                                           (6,124,200)

Accumulated depreciation on real
  estate disposed                                                                                                        (1,829,100)

Provisions for value impairment               (1,000,000)                   (1,700,000)                   (2,050,000)
                                            ------------   ------------   ------------   ------------   ------------   ------------

Balance at the end of the year              $ 33,709,500   $ 12,642,700   $ 34,303,900   $ 11,934,300   $ 35,610,800   $ 11,217,400
                                            ============   ============   ============   ============   ============   ============
</TABLE>

Note 4.   The aggregate cost for federal income tax purposes at December 31,
          1997 was $38,459,500.

Note 5.   Included provisions for value impairment. See Note 8 of Notes to
          Financial Statements for additional information.

Note 6.   Estimated useful life for building.

Note 7.   Estimated useful life for improvements.

                                     A-10