<PAGE>

================================================================================

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549-1004

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

                                   FORM 10-Q

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

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

    For the period ended March 31, 2002

                                      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 0-12945

                First Capital Institutional Real Estate, Ltd.-2
            (Exact name of registrant as specified in its charter)


                          Florida                      59-2313852
              (State or other jurisdiction of       (I.R.S. Employer
               incorporation or organization)      Identification No.)

                 Two North Riverside Plaza,            60606-2607
                         Suite 700,                    (Zip Code)
                     Chicago, Illinois
          (Address of principal executive offices)


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

                                Not applicable
  (Former name, former address and former fiscal year, if changed since last
                                    report)

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 [_]

Documents incorporated by reference:

The First Amended and Restated Certificate and Agreement of Limited Partnership
filed as Exhibit A to the Partnership's Prospectus dated October 19, 1983,
included in the Partnership's Registration Statement on Form S-11, is
incorporated herein by reference in Part I of this report.

================================================================================

<PAGE>

BALANCE SHEETS
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                          March 31,
                                            2002     December 31,
                                         (Unaudited)     2001
               <S>                       <C>         <C>
               -------------------------------------------

               ASSETS
               Cash and cash equivalents $6,263,300   $6,279,200
               Other assets                  11,100       12,900
               -------------------------------------------
                                         $6,274,400   $6,292,100
               -------------------------------------------

               LIABILITIES AND PARTNERS' CAPITAL
               Liabilities:
                Accounts payable and
                  accrued expenses       $   94,800   $   94,600
                Due to Affiliates             5,100        4,400
                Other liabilities             3,100        2,800
               -------------------------------------------
                                            103,000      101,800
               -------------------------------------------
               Partners' capital:
                General Partner              79,400       79,600
                Limited Partners (84,886
                  Units issued and
                  outstanding)            6,092,000    6,110,700
               -------------------------------------------
                                          6,171,400    6,190,300
               -------------------------------------------
                                         $6,274,400   $6,292,100
               -------------------------------------------
</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the quarter ended March 31, 2002 (Unaudited)
and the year ended December 31, 2001
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                  General   Limited
                                  Partner   Partners     Total
              -------------------------------------------
              <S>                 <C>      <C>         <C>
              Partners' capital,
                January 1, 2001   $78,700  $6,021,500  $6,100,200
              Net income for the
                year ended
                December 31, 2001     900      89,200      90,100
              -------------------------------------------
              Partners' capital,
                December 31, 2001  79,600   6,110,700   6,190,300
              Net (loss) for the
                quarter ended
                March 31, 2002       (200)    (18,700)    (18,900)
              -------------------------------------------
              Partners' capital,
                March 31, 2002    $79,400  $6,092,000  $6,171,400
              -------------------------------------------
</TABLE>

                                                                             3
   The accompanying notes are an integral part of the financial statements.

<PAGE>

STATEMENTS OF INCOME AND EXPENSES
For the quarters ended March 31, 2002 and 2001
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)

<TABLE>
<CAPTION>
                                                   2002     2001
             -----------------------------------------------------
             <S>                                 <C>       <C>
             Income:
              Interest                           $ 29,400   85,900
             -----------------------------------------------------
             Expenses:
              General and administrative:
                Affiliates                          4,000    1,800
                Nonaffiliates                      44,300   34,500
             -----------------------------------------------------
                                                   48,300   36,300
             -----------------------------------------------------
             Net (loss) income                   $(18,900) $49,600
             -----------------------------------------------------
             Net (loss) income allocated to
               General Partner                   $   (200) $   500
             -----------------------------------------------------
             Net (loss) income allocated to
               Limited Partners                  $(18,700) $49,100
             -----------------------------------------------------
             Net (loss) income allocated to
               Limited Partners per Unit (84,886
               Units outstanding)                $  (0.22) $  0.58
             -----------------------------------------------------
</TABLE>
STATEMENTS OF CASH FLOWS
For the quarters ended March 31, 2002 and 2001
(Unaudited)
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                                 2002        2001
           ---------------------------------------------------------
           <S>                                <C>         <C>
           Cash flows from operating
             activities:
            Net (loss) income                 $  (18,900) $   49,600
            Adjustments to reconcile net
              (loss) income to net cash
              (used for) provided by
              operating activities:
              Changes in assets and
                liabilities:
                Decrease in other
                  assets                           1,800          --
                Increase in accounts
                  payable and accrued
                  expenses                           200      16,100
                Increase in due to
                  Affiliates                         700         700
                Increase in other
                  liabilities                        300       1,500
           ---------------------------------------------------------
                  Net cash (used for)
                    provided by
                    operating activities         (15,900)     67,900
           ---------------------------------------------------------
                  Net cash from
                    investing activities              --          --
           ---------------------------------------------------------
                  Net cash from
                    financing activities              --          --
           ---------------------------------------------------------
           Net (decrease) increase in cash
             and cash equivalents                (15,900)     67,900
           Cash and cash equivalents at
             the beginning of the period       6,279,200   6,187,600
           ---------------------------------------------------------
           Cash and cash equivalents at
             the end of the period            $6,263,300  $6,255,500
           ---------------------------------------------------------
</TABLE>

4
    The accompanying notes are an integral part of the financial statements

<PAGE>

NOTES TO FINANCIAL STATEMENTS
(Unaudited)
March 31, 2002



1. 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.

Accounting Policies:
The Partnership has disposed of its real estate properties. Upon resolution of
the environmental matter disclosed in Note 3, the Partnership will make a
liquidating distribution to Partners and dissolve.

The financial statements have been prepared in accordance with accounting
principles generally accepted in the United States ("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 financial information included in these financial statements is unaudited;
however, in management's opinion, all adjustments (consisting of only normal,
recurring accruals) necessary for a fair presentation of the results of
operations for the periods included have been made. Results of operations for
the three months ended March 31, 2002 are not necessarily indicative of the
operating results for the year ending December 31, 2002.

The Partnership has one reportable segment as the Partnership is in the
disposition phase of its life cycle, wherein it is seeking to resolve
post-closing matters related to the properties sold by the Partnership.

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

Reference is made to the Partnership's Annual Report for the year ended
December 31, 2001 for a description of other accounting policies and additional
details of the Partnership's financial condition, results of operations,
changes in Partners' capital and changes in cash balances for the year then
ended. The details provided in the notes thereto have not changed except as a
result of normal transactions in the interim or as otherwise disclosed herein.

2. Related party transactions:

In accordance with the Partnership Agreement, subsequent to October 19, 1984,
the Termination of the Offering, the General Partner is entitled to 10% of Cash
Flow (as defined in the Partnership Agreement) as a Partnership Management Fee.
For the three months ended March 31, 2002 and 2001 the General Partner was not
paid a Partnership Management Fee.

Net Profits (exclusive of Net Profits from the sale or disposition of
Partnership properties) are allocated: first, to the General Partner, in an
amount equal to the greater of the General Partner's Partnership Management Fee
or 1% of such Net Profits; second, the balance, if any, to the Limited
Partners. Net Profits from the sale or disposition of a Partnership property
are allocated: first, prior to giving effect to any distributions of Sale
Proceeds from the transaction, to the General Partner 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 Partner, in an amount necessary to make the
balance in its capital account equal to the amount of Sale Proceeds to be
distributed to the General Partner with respect to the sale or disposition of
such property 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
Partner and 99% to the Limited Partners. Net Losses from the sale, disposition
or provision for value impairment of Partnership properties are allocated:
first, prior to giving effect to any distributions of Sale Proceeds from the
transaction, to the extent that the balance in the General Partner's capital
account exceeds its 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 Partner and the Limited Partners pro rata in
proportion to such Excess Balances until such Excess Balances are reduced to
zero; second, to the General Partner and the Limited Partners and among them
(in the ratio which balances) until the balance in their capital accounts shall
be reduced to zero; third, the balance, if any, 99% to the Limited Partners and
1% to the General Partner. Notwithstanding the foregoing, in all events there
shall be allocated to the General Partner not less than 1% of Net Profits and
Net Losses from the sale, disposition or provision for value impairment of a
Partnership property. For each of the three months ended March 31, 2002 and
2001 the General Partner was allocated Net (Losses) Profits of $(200) and $500,
respectively.

Fees and reimbursements paid and payable by the Partnership to Affiliates
during the quarter ended March 31, 2002 were as follows:

<TABLE>
<CAPTION>
                                               Paid  Payable
                   -----------------------------------------
                   <S>                        <C>    <C>
                   Reimbursement of expenses,
                     at cost:
                    --Accounting              $1,000 $1,500
                    --Investor communications  2,300  3,600
                   -----------------------------------------
                   Total                      $3,300 $5,100
                   -----------------------------------------
</TABLE>

                                                                             5

<PAGE>

3. Environmental matter:

In 1996, the General Partner became aware of the existence of hazardous
substances in the soil and groundwater under Lakewood Square Shopping Center
("Lakewood"). In connection with the 1997 sale of Lakewood, the purchaser
assumed the obligation to remedy the hazardous substances in the manner
required by law, which includes, but is not limited to, payment of all costs in
connection with the remediation work. In addition, the purchaser provided the
Partnership with certain indemnification protection in relation to clean-up
costs and related expenses arising from the presence of these hazardous
substances. At the present time, the General Partner is unaware of any claims
or other matters referred to above against the Partnership. The California
Regional Water Quality Control Board has approved the purchaser's revised
remedial action plan (the "Plan") for the site. The remediation is scheduled to
begin in 2002, provided the proper permits are obtained. There can be no
assurance as to the timing of successful completion of the Plan. The General
Partner continues to monitor the documentation delivered by the purchaser
regarding the purchaser's activities to remedy the hazardous substances at
Lakewood.


TRANSFER AGENT AND REGISTRAR
The Bank of New York
P.O. Box 7090
Troy, Michigan 48007-7090
(800) 447-7364
                                                      [LOGO] First Capital
                                                      Institutional Real
                                                      Estate, Ltd.-2

                                                                [Graphic]



                                                      sponsored by FIRST
                                                      CAPITAL FINANCIAL LLC

                                                                   Two North
                                                      Riverside Plaza

                                                             Chicago, Illinois
                                                      60606

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
        FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Reference is made to the Partnership's Annual Report for the year ended
December 31, 2001 for a discussion of the Partnership's business.
Statements contained in this Management's Discussion and Analysis of Financial
Condition and Results of Operations, which are not historical facts, may be
forward-looking statements. Such statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially from those
projected. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.

The Partnership has substantially completed the disposition phase of its life
cycle. The Partnership sold its remaining real property investments and is
currently working toward resolution of post closing property sale matters.

Operations
Net income (loss) changed from $49,600 for the three months ended March 31,
2001 to $(18,900) for the three months ended March 31, 2002. The change was
primarily due to a decrease in interest earned on the Partnership's short-term
investments, which was due to a decrease in the rates earned on those
investments.

Liquidity and Capital Resources
The decrease in the Partnership's cash position of $15,900 for the three months
ended March 31, 2002 was the result of net cash used for operating activities.
Liquid assets (including cash and cash equivalents) of the Partnership as of
March 31, 2002 were comprised of amounts held for the Lakewood environmental
matter (as hereafter discussed) and Partnership liquidation expenses.

Net cash provided by (used for) operating activities changed from $67,900 for
the three months ended March 31, 2001 to $(15,900) for the three months ended
March 31, 2002. The change was primarily due to the change in net results, as
previously discussed. In addition, the change was due to the timing of the
payment of certain Partnership expenses.

The Partnership has no financial instruments for which there are significant
market risks.

As described in Note 3 of Notes to Financial Statements, the Partnership is
awaiting resolution of an environmental matter at Lakewood. The General Partner
is continuing to monitor the documentation delivered by the purchaser of
Lakewood regarding the purchaser's activities to remedy the hazardous
substances at Lakewood. There can be no assurance as to the actual timeframe
for the remediation or that it will be completed without cost to the
Partnership. When the environmental matter is satisfactorily remediated, the
Partnership will pay a liquidating distribution to Partners of the remaining
assets held by the Partnership, less amounts reserved for administrative
expenses and any amounts deemed necessary for contingencies and other
post closing matters.

2

<PAGE>

PART II. OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K:

(a) Exhibits: None

(b) Reports on Form 8-K

There were no reports on Form 8-K filed during the three months ended March 31,
2002.

                                                                             7

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                          FIRST CAPITAL INSTITUTIONAL REAL
                                            ESTATE, LTD.-2

                                          By: FIRST CAPITAL FINANCIAL LLC
                                             GENERAL PARTNER

                                                /s/  DOUGLAS CROCKER II
Date: May 10, 2002
                                          By:  ______________________________
                                                     DOUGLAS CROCKER II
                                               President and Chief Executive
                                                          Officer

                                                   /s/  PHILIP G. TINKLER
Date: May 10, 2002
                                          By: _________________________________
                                                     PHILIP G. TINKLER
                                                Vice President--Finance and
                                                         Treasurer

8