<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, 2001
                                      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,        60606-2607
                             Suite 700,                (Zip Code)
                         Chicago, Illinois
              (Address of principal executive offices)

      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 Partnership was formed 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 with an Affiliated partnership to acquire 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
LLC (the "Managing General Partner"). In addition, in April 1986 the
Partnership purchased four mortgage loan investments. As of December 31, 2001:
1) the Partnership had sold or disposed of five real property investments; 2)
the Partnership and its Affiliate dissolved the joint venture following the
sale of the joint venture's real property investment and 3) all four of the
mortgage loan investments were repaid to the Partnership.

Property management services for the Partnership's property is provided by a
third party property management company. 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. The Property owned by the Partnership frequently
competes for tenants with similar properties owned by others.

As of March 1, 2001, there were no employees at the Partnership's property.

ITEM 2.  PROPERTIES (a)(b)

As of December 31, 2001, the Partnership owned the following property
investment, which was owned in fee simple.

<TABLE>
<CAPTION>
                                                 Net Leasable  Number of
          Property Name           Location       Sq. Footage  Tenants (c)
       ------------------------------------------------------------------
       <S>                  <C>                  <C>          <C>
       Walker Springs Plaza Knoxville, Tennessee   161,557         7(4)
       ------------------------------------------------------------------
</TABLE>
(a)For a discussion of operating results and major capital expenditures planned
   for the Partnership's property refer to Item 7-- Management's Discussion and
   Analysis of Financial Condition and Results of Operations.
(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. Real estate tax expense
   for Walker Springs Plaza was $154,400 for the year ended December 31, 2001.
   In the opinion of the Managing General Partner, the Partnership's property
   is 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 Walker Springs' occupancy rates as of December 31
for each of the last five years:

<TABLE>
<CAPTION>
                    Property Name     2001 2000 1999 1998 1997
                 ---------------------------------------------
                 <S>                  <C>  <C>  <C>  <C>  <C>
                 Walker Springs Plaza  81%  60%  72%  73% 100%
                 ---------------------------------------------
</TABLE>

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

<TABLE>
<CAPTION>
                  Property Name     2001  2000  1999  1998  1997
               --------------------------------------------------
               <S>                  <C>   <C>   <C>   <C>   <C>
               Walker Springs Plaza $5.97 $6.03 $5.81 $5.59 $5.36
               --------------------------------------------------
</TABLE>

The following table summarizes the principal provisions of the leases for each
of the tenants who occupy ten percent or more of the rentable square footage at
Walker Springs as of December 31, 2001:

<TABLE>
<CAPTION>
                                                                                   Percentage Renewal
                                        Per annum Base Rents (a) for                 of Net   Options
                                        ----------------------------                Leasable  (Renewal
                                                        Final Twelve                 Square   Options/
                                                         Months of    Expiration    Footage    Years
                                            2002           Lease     Date of Lease  Occupied    per
------------------------------------------------------------------------------------------------------
<S>                                     <C>             <C>          <C>           <C>        <C>
Books-A-Million (b) (book store)        $123,100          $123,100     3/31/2003       22%      1/5
Kingsford Pike Antique Mall (Antiques)  $121,500          $121,500     8/31/2005       11%      1/5
Revco D.S., Inc. (drugstore)            $ 41,000          $ 41,000     3/31/2003       10%      2/5
Rush Fitness Center (exercise facility) $234,000          $253,500    11/30/2011       24%      3/5
------------------------------------------------------------------------------------------------------
</TABLE>
(a)The per annum base rents for each of the tenants listed above for each of
   the years between 2002 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)Space is sublet from Kroger. Pursuant to the terms of the lease, Kroger is
   lessee.

2

<PAGE>

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 ending
December 31, 2011:

<TABLE>
<CAPTION>
                                       Base Rents in
                  Number                  Year of       % of Total
           Year of Tenants Square Feet Expiration (a) Base Rents (b)
           ---------------------------------------------------------
           <S>  <C>        <C>         <C>            <C>
           2002     0          None           None          0.00%
           2003     2        51,800       $ 41,000          6.10%
           2004     1        11,600       $ 47,900          8.92%
           2005     3        29,100       $207,000         46.93%
           2006     0          None           None          0.00%
           2007     0          None           None          0.00%
           2008     0          None           None          0.00%
           2009     0          None           None          0.00%
           2010     0          None           None          0.00%
           2011     1        39,000       $232,400        100.00%
           ---------------------------------------------------------
</TABLE>
(a)Represents the base rents to be collected each year on expiring leases.
   (Note: Since leases expire at different dates in each year, the amounts in
   this column do not purport to include a full year's base rent on expiring
   leases)
(b)Represents the base rents to be collected each year on expiring leases as a
   percentage of the total base rents scheduled to be collected on leases in
   effect as of December 31, 2001.

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, 2001. Ordinary routine legal
matters incidental to the business which were not deemed material were pursued
during the quarter ended December 31, 2001.

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

(a,b,c & d) None.

                                                                             3

<PAGE>

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, 2002, there were 5,689 Holders of Units.

ITEM 6.  SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                 For the Years Ended December 31,
                                                    -----------------------------------------------------------
                                                       2001        2000        1999        1998        1997
---------------------------------------------------------------------------------------------------------------
<S>                                                 <C>         <C>         <C>         <C>         <C>
Total revenues                                      $ 1,020,700 $ 1,537,300 $ 7,910,800 $ 4,371,400 $ 4,746,700
Net income                                          $   361,100 $   966,700 $ 5,945,600 $ 1,446,400 $   909,200
Net income allocated to Limited Partners            $   298,900 $   904,500 $ 5,694,000 $ 1,263,000 $   717,000
Net income allocated to Limited Partners per Unit
  (70,000 Units outstanding)                        $      4.27 $     12.92 $     81.34 $     18.04 $     10.24
Total assets                                        $10,905,000 $11,171,600 $24,138,300 $20,141,900 $26,557,900
Declared distributions to Limited Partners per Unit
  (70,000 Units outstanding) (a)                    $      8.00 $      8.00 $    210.00 $    104.50 $     26.00
Return of capital to Limited Partners per Unit
  (70,000 Units outstanding) (b)                           None $      None $    128.66 $     86.46 $     15.76
Other data:
Investment in commercial rental properties (net of
  accumulated depreciation and amortization)        $ 4,651,600 $ 4,638,200 $ 4,777,900 $14,410,000 $21,066,800
Number of real property interests owned at
  December 31                                                 1           1           1           2           3
---------------------------------------------------------------------------------------------------------------
</TABLE>
(a)Declared distributions to Limited Partners per Unit for the years ended
   December 31, 1999 and 1997 included Sales Proceeds of $188.00 and $80.50,
   respectively.
(b)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 accounting principles generally accepted in the United States
("GAAP"):

<TABLE>
<CAPTION>
                                                                    For the Years Ended December 31,
                                                     --------------------------------------------------------------
                                                       2001         2000         1999         1998         1997
--------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>        <C>           <C>          <C>          <C>
Cash Flow (as defined in the Partnership
  Agreement) (a)                                     $ 536,000  $  1,134,400  $   838,700  $ 2,523,300  $ 2,617,600
Items of reconciliation:
 Changes in current assets and liabilities:
   Decrease in current assets                            8,300         7,500       26,800       41,600      133,300
   (Decrease) increase in current liabilities          (21,000)      105,800     (221,700)    (256,200)     (82,600)
--------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities            $ 523,300  $  1,247,700  $   643,800  $ 2,308,700  $ 2,668,300
--------------------------------------------------------------------------------------------------------------------
Net cash (used for) provided by investing activities $(188,300) $ 18,807,100  $  (852,500) $ 2,336,300  $   670,400
--------------------------------------------------------------------------------------------------------------------
Net cash (used for) financing activities             $(606,700) $(14,039,200) $(1,727,500) $(7,606,200) $(2,015,100)
--------------------------------------------------------------------------------------------------------------------
</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-7
in this report and the supplemental schedule on pages A-8 and A-9.

4

<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.

Statements contained in the Management's Discussion and Analysis of Financial
Condition, 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 to the date hereof.

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. The
Partnership, in addition to being in the operation of properties phase, is in
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, 2001: 1) the
Partnership sold or disposed of five 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 owned by the Joint Venture and 3) all four
of the mortgage loan investments were repaid to the Partnership.

Operations
The table below is a recap of certain operating results of each of the
Partnership's properties for the years ended December 31, 2001, 2000 and 1999.
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,
                                     --------------------------------
                                        2001        2000       1999
          ------------------------------------------------------------
          <S>                        <C>         <C>        <C>
          Walker Springs Plaza Shopping Center
          Rental revenues            $761,100    $783,500   $ 893,800
          ------------------------------------------------------------
          Property net income        $280,800    $324,600   $ 321,000
          ------------------------------------------------------------
          Average occupancy               64%         60%         72%
          ------------------------------------------------------------
          Sold properties (b)
          Rental revenues                        $  1,100   $ 956,700
          ------------------------------------------------------------
          Property net income (loss)             $  1,400   $(294,100)
          ------------------------------------------------------------
</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 and general and administrative expenses or are
    related to properties disposed of by the Partnership prior to the periods
    under comparison.
(b) Property net (loss) excludes the gain of $5,779,800 recorded on the sale of
    Brookwood Metroplex Office Building I & II ("Brookwood"), which was
    included in the Statement of Income and Expenses for the year ended
    December 31, 1999.

Comparison of the year ended December 31, 2001 to the year ended December 31,
2000
Net income decreased by $605,600 for the year ended December 31, 2001 when
compared to the year ended December 31, 2000. The decrease was primarily due to
a decrease in interest earned on the Partnership's short-term investements.
This decrease was due to a decrease in the average cash available for
investment and a decline in the rates earned on these investments. In addition,
the decrease was due to a decline in operating results at Walker Springs Plaza
Shopping Center "Walker Springs" and an increase in general and administrative
expenses, which was due to the State of Tennessee initiating a new Partnership
tax.

The following comparative discussion includes only the operating results of
Walker Springs.

Rental revenues decreased by $22,400 or 2.9% for the year ended December 31,
2001 when compared to the year ended December 31, 2000. This decrease was due
to a decrease in tenant reimbursement for common area maintenance and real
estate taxes. The decrease was partially offset by an increase in base rental
income.

Repair and maintenance expense increased by $4,700 for the year ended December
31, 2001 when compared to the year ended December 31, 2000. The increase was
primarily due to repairs to several portions of the roof.

Property operating expense increased by $5,600 for year ended December 31, 2001
when compared to the year ended December 31, 2000. The increase was due to an
increase in legal fees, which were related to the securing of new tenants. The
increase was partially offset by a decrease in utility costs.

Comparison of the year ended December 31, 2000 to the year ended December 31,
1999
Net income decreased by $4,978,900 for the year ended December 31, 2000 when
compared to the year ended December 31, 1999. The decrease was primarily due to
the 1999 gain recorded on the sale of Brookwood. The decrease was partially
offset by an increase in interest income and the absence of operating (losses)
from Brookwood in 2000 due to its 1999 sale.

Net income, exclusive of Brookwood, increased by $505,300 for the year ended
December 31, 2000 when compared to the year ended December 31, 1999. The
increase was due to the increase in interest earned on the Partnership's
short-term investments, which was due to the investment of Brookwood cash sale
proceeds prior to distribution to Partners on May 31, 2000.

The following comparative discussion includes only the operating results of
Walker Springs.

Rental revenues decreased by $110,300 or 12.3% for the year ended December 31,
2000 when compared to the year ended December 31, 1999. The decrease was
primarily due to a decline in average occupancy.

Real estate tax expense decreased by $37,100 for the year ended December 31,
2000 when compared to the year ended December 31, 1999. The decrease was
primarily the result of successful appeals of real estate taxes for 1999, which
5

<PAGE>

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

resulted in the receipt of refunds and a lower projected expense for 2000.

Repair and maintenance expenses decreased by $31,600 for the year ended
December 31, 2000 when compared to the year ended December 31, 1999. The
decrease was primarily due to the effects of the decline in average occupancy
together with a decrease in repairs to the roof incurred in 1999.

Property operating expenses decreased by $22,100 for the year ended December
31, 2000 when compared to the year ended December 31, 1999. The decrease was
primarily due to the effects of the decline in average occupancy.

To increase and/or maintain the occupancy level at the Partnership's remaining
property, the Managing General Partner, through the 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 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, 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
property. 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 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 $598,400
for the year ended December 31, 2001 when compared to year ended December 31,
2000 was primarily due the decrease in interest earned on the Partnership's
short-term investments, as previously discussed.

The decrease in the Partnership's cash position of $271,700 for the year ended
December 31, 2001 was primarily the result of distributions paid to Partners
and payments for capital and tenant improvements exceeding net cash provided by
operating activities. Liquid assets, including cash and cash equivalents, of
the Partnership as of December 31, 2001 are comprised of amounts held for
working capital purposes.

Net cash provided by operating activities decreased by $724,400 for the year
ended December 31, 2001 when compared to the year ended December 31, 2000. The
decrease was primarily due to the decrease in interest earned on the
Partnership's short-term investments, as previously discussed, together with
the timing of the payment of certain expenses.

Net cash provided by (used for) investing activities changed from $18,807,100
for the year ended December 31, 2000 to $(188,300) for the year ended December
31, 2001. The change was primarily due to the 2000 maturity of 1999 investments
in debt securities. The cash proceeds received from the sale of Brookwood
during 1999 were invested in debt securities until their distribution to
Limited Partners in 2000. The change was also due to an increase in capital and
tenant improvements.

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

As of December 31, 2001, Walker Springs had approximately 30,100 square feet of
vacant space or 19% of its net leasable square footage ("NLS"). During 2001,
the Partnership entered into a lease agreement with a new tenant to occupy
approximately 24% of the NLS. This tenant's lease, which runs for ten years,
with tenant options for three additional five year periods, commences during
2001 with the Partnership scheduled to begin receiving monthly base rent of
$19,500 in early 2002. The amount of capital and tenant improvements spent
during 2002 is largely dependant on the leasing the vacant space.

The decrease in net cash used for financing activities of $13,432,500 for the
year ended December 31, 2001 as compared to the year ended December 31, 2000
was primarily due to the May 31, 2000 special distribution of proceeds of
$13,160,000 from the sale of Brookwood.

The Managing General Partner continues to review and evaluate projections of
future rental income in its determination of adequate levels of cash reserves
due to the anticipated building and tenant improvements and leasing costs
necessary to be made at Walker Springs during the next several years. For the
year ended December 31, 2001, in addition to Cash Flow (as defined the
Partnership Agreement), the Partnership utilized $86,200 working capital
reserves to fund Partner distributions.

Distributions to Limited Partners for the quarter ended December 31, 2001 were
declared in the amount of $140,000 or $2.00 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
Walker Springs 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.

6

<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

None.

                                                                             7

<PAGE>

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

(a) & (e) DIRECTORS

The Partnership has no directors. First Capital Financial LLC ("FCFC")
(formerly known as First Capital Financial Corporation) is the Managing General
Partner. The directors of FCFC, as of March 1, 2002, 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 2002.

<TABLE>
<CAPTION>
                           Name                   Office
                           ----                   ------
                      <S>                        <C>
                      Douglas Crocker II........ Director
                      Donald J. Liebentritt..... Director
</TABLE>

Douglas Crocker II, 61, 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 Wellsford Real Properties Inc. and Ventas,
Inc. Mr. Crocker was an Executive Vice President of Equity Financial and
Management Company ("EFMC") from November 1992 until March 1997.

Donald J. Liebentritt, 51, has been Vice President of the Managing General
Partner since July 1997 and a Director since May 2000 and is President of
Equity Group Investments, LLC ("EGI"), Vice President and Assistant Secretary
of Great American Management and Investment Inc. ("Great American") and was
Principal and Chairman of the Board of Rosenberg and Liebentritt P.C. until its
dissolution in 1999. Mr. Liebentritt has also been a director of Davel
Communications, Inc. since November 2000.

(b) & (e) EXECUTIVE OFFICERS

The Partnership does not have any executive officers. The executive officers of
the Managing General Partner as of March 1, 2002 are shown in the table. All
officers are elected to serve for one year or until their successors are
elected and qualified.

<TABLE>
<CAPTION>
             Name                                 Office
             ----                                 ------
        <S>                        <C>
        Douglas Crocker........... President and Chief Executive Officer
        Donald J. Liebentritt..... Vice President
        Philip Tinkler............ Vice President--Finance and Treasurer
</TABLE>

PRESIDENT AND CEO--See Table of Directors above.

VICE PRESIDENT--See Table of Directors above.

Philip Tinkler, 37, has been Vice President of Finance and Treasurer of the
Managing General Partner since April 2001, and has also been Vice President/
Assistant Treasurer of Great American since March 2001, and Treasurer and Vice
President of Accounting for EGI since May 2000.

(d) FAMILY RELATIONSHIPS

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

(f) INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

There are no involvements in certain legal proceedings among any of the
foregoing directors and officers.

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, 2001. 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, 2002, 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, 2002,
   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 or provided 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, 2001, these Affiliates were entitled to leasing, property
   management and supervisory fees of $3,300. Other Affiliates of the Managing
   General Partner were entitled to fees, compensation and reimbursements of
   $37,600 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, $3,200 was due to Affiliates as of
   December 31, 2001.

8

<PAGE>

   As of December 31, 2001, $37,700 was due to the Managing General Partner for
   real estate commissions earned in connection with the previous sale of
   Partnership properties. 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 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,
   2001, the General Partners were paid a Partnership Management Fee and
   allocated Net Profits of $62,200.

(b)None.

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

(d)None.

                                                                             9

<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, 2001.

10

<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 LLC
                                             MANAGING GENERAL PARTNER

                                               /s/  DOUGLAS CROCKER II
                                          By: _______________________________
Dated:  March 22, 2002
                                                   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 22, 2002 President, Chief Executive
--------------------------                  Officer and Director of the
    DOUGLAS CROCKER II                      Managing General Partner

/s/  DONALD J. LIEBENTRITT March 22, 2002 Vice President and Director of
--------------------------                  the Managing General Partner
  DONALD J. LIEBENTRITT

   /s/  PHILIP TINKLER     March 22, 2002 Vice President--Finance and
--------------------------                  Treasurer
      PHILIP TINKLER

                                                                             11

<PAGE>

INDEX OF FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS
FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT

<TABLE>
<CAPTION>
                                                               Pages
         <S>                                                 <C>
         --------------------------------------------------------------
         Report of Independent Auditors                         A-2
         Balance Sheets as of December 31, 2001 and 2000        A-3
         Statements of Partners' Capital for the Years Ended
           December 31, 2001, 2000 and 1999                     A-3
         Statements of Income and Expenses for the Years
           Ended December 31, 2001, 2000 and 1999               A-4
         Statements of Cash Flows for the Years Ended
           December 31, 2001, 2000 and 1999                     A-4
         Notes to Financial Statements                       A-5 to A-6
         --------------------------------------------------------------
</TABLE>

SCHEDULES FILED AS PART OF THIS REPORT

<TABLE>
<S>                                                                  <C>
III--Real Estate and Accumulated Depreciation as of December 31,2001 A-7 to A-9
</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

Lease Agreement with Hubney Fitness Corporation, d/b/a The Rush Fitness
complex, a tenant scheduled to occupy greater than 10% of the net leasable
square footage.

EXHIBIT (13) Annual Report to Security Holders

The 2000 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.

                                                                            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, 2001 and 2000, and the related
statements of income and expenses, partners' capital and cash flows for each of
the three years in the period ended December 31, 2001. Our audit also included
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 auditing standards generally
accepted in the United States. 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, 2001 and 2000, and the results of
its operations and its cash flows for each of the three years in the period
ended December 31, 2001, in conformity with accounting principles generally
accepted in the United States. 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
February 28, 2002, except for Note 6, as to which the date is March 15, 2002

A-2

<PAGE>

BALANCE SHEETS
December 31, 2001 and 2000
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                              2001         2000
            -----------------------------------------------------
            <S>                            <C>          <C>
            ASSETS
            Investment in commercial
              rental property:
             Land                          $ 1,784,700  $ 1,784,700
             Buildings and improvements      5,875,800    5,687,500
            -----------------------------------------------------
                                             7,660,500    7,472,200
             Accumulated depreciation
               and amortization             (3,008,900)  (2,834,000)
            -----------------------------------------------------
             Total investment property,
               net of accumulated
               depreciation and
               amortization                  4,651,600    4,638,200
            Cash and cash equivalents        6,199,700    6,471,400
            Rents receivable                     4,200       56,100
            Other assets                        49,500        5,900
            -----------------------------------------------------
                                           $10,905,000  $11,171,600
            -----------------------------------------------------
</TABLE>

<TABLE>
               <S>                       <C>         <C>
               LIABILITIES AND PARTNERS' CAPITAL
               Liabilities:
                Accounts payable and
                  accrued expenses       $   247,000 $   270,100
                Due to Affiliates, net        40,900      38,800
                Security deposits             30,500      30,500
                Distributions payable        171,100     155,600
               -------------------------------------------------
                                             489,500     495,000
               -------------------------------------------------
               Partners' capital:
                General Partners              50,100      50,100
                Limited Partners (70,000
                  Units issued and
                  outstanding)            10,365,400  10,626,500
               -------------------------------------------------
                                          10,415,500  10,676,600
               -------------------------------------------------
                                         $10,905,000 $11,171,600
               -------------------------------------------------
</TABLE>

STATEMENTS OF PARTNERS' CAPITAL
For the years ended December 31, 2001, 2000 and 1999
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                General      Limited
                                Partners     Partners       Total
          <S>                   <C>        <C>           <C>
          ------------------------------------------------------------
          Partners' (deficit)
            capital,
            January 1, 1999     $ (30,300) $ 19,288,000  $ 19,257,700
          Net income for the
            year ended
            December 31, 1999     251,600     5,694,000     5,945,600
          Distributions for the
            year ended
            December 31, 1999    (171,200)  (14,700,000)  (14,871,200)
          ------------------------------------------------------------
          Partners' capital,
            December 31, 1999      50,100    10,282,000    10,332,100
          Net income for the
            year ended
            December 31, 2000      62,200       904,500       966,700
          Distributions for the
            year ended
            December 31, 2000     (62,200)     (560,000)     (622,200)
          ------------------------------------------------------------
          Partners' capital,
            December 31, 2000      50,100    10,626,500    10,676,600
          Net income for the
            year ended
            December 31, 2001      62,200       298,900       361,100
          Distributions for the
            year ended
            December 31, 2001     (62,200)     (560,000)     (622,200)
          ------------------------------------------------------------
          Partners' capital,
            December 31, 2001   $  50,100  $ 10,365,400  $ 10,415,500
          ------------------------------------------------------------
</TABLE>


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

<PAGE>

STATEMENTS OF INCOME AND EXPENSES
For the years ended December 31, 2001, 2000 and 1999
(All dollars rounded to nearest 00s except per Unit amounts)

<TABLE>
<CAPTION>
                                                                                2001       2000       1999
-------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>        <C>        <C>
Income:
 Rental                                                                      $  761,100 $  784,600 $1,850,500
 Interest                                                                       259,600    752,700    280,500
 Gain on sale of property                                                                           5,779,800
-------------------------------------------------------------------------------------------------------------
                                                                              1,020,700  1,537,300  7,910,800
-------------------------------------------------------------------------------------------------------------
Expenses:
 Depreciation and amortization                                                  174,900    167,700    672,900
 Property operating:
   Affiliates                                                                     3,300      8,600     12,600
   Nonaffiliates                                                                 93,900     86,500    456,400
 Real estate taxes                                                              154,400    150,400    301,000
 Insurance--Affiliate                                                            20,200     20,200     25,800
 Repairs and maintenance                                                         33,700     29,000    354,900
 General and administrative:
   Affiliates                                                                    17,400      8,200     29,900
   Nonaffiliates                                                                161,800    100,000    111,700
-------------------------------------------------------------------------------------------------------------
                                                                                659,600    570,600  1,965,200
-------------------------------------------------------------------------------------------------------------
Net income                                                                   $  361,100 $  966,700 $5,945,600
-------------------------------------------------------------------------------------------------------------
Net income allocated to General Partners                                     $   62,200 $   62,200 $  251,600
-------------------------------------------------------------------------------------------------------------
Net income allocated to Limited Partners                                     $  298,900 $  904,500 $5,694,000
-------------------------------------------------------------------------------------------------------------
Net income allocated to Limited Partners per Unit (70,000 Units outstanding) $     4.27 $    12.92 $    81.34
-------------------------------------------------------------------------------------------------------------
</TABLE>

STATEMENTS OF CASH FLOWS
For the years ended December 31, 2001, 2000 and 1999
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                                                                      2001         2000          1999
--------------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>         <C>           <C>
Cash flows from operating activities:
 Net income                                                                        $  361,100  $    966,700  $  5,945,600
 Adjustments to reconcile net income to net cash provided by operating activities:
   Depreciation and amortization                                                      174,900       167,700       672,900
   (Gain) on sale of property                                                                                  (5,779,800)
   Changes in assets and liabilities:
     Decrease in rents receivable                                                      51,900        13,400        25,700
     (Increase) decrease in other assets                                              (43,600)       (5,900)        1,100
     (Decrease) increase in accounts payable and accrued expenses                     (23,100)       83,400      (167,200)
     Increase (decrease) in due to Affiliates                                           2,100        30,300       (48,100)
     (Decrease) in other liabilities                                                                 (7,900)       (6,400)
--------------------------------------------------------------------------------------------------------------------------
       Net cash provided by operating activities                                      523,300     1,247,700       643,800
--------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
 Payments for building and tenant improvements                                       (188,300)      (28,000)     (374,000)
 Decrease (increase) in investments in debt securities                                           18,835,100   (15,591,500)
 Proceeds from the sale of property                                                                            15,113,000
--------------------------------------------------------------------------------------------------------------------------
       Net cash (used for) provided by investing activities                          (188,300)   18,807,100      (852,500)
--------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
 Distributions paid to Partners                                                      (606,700)  (14,054,400)   (1,711,200)
 Increase (decrease) in security deposits                                                            15,200       (16,300)
--------------------------------------------------------------------------------------------------------------------------
       Net cash (used for) financing activities                                      (606,700)  (14,039,200)   (1,727,500)
--------------------------------------------------------------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents                                 (271,700)    6,015,600    (1,936,200)
Cash and cash equivalents at the beginning of the year                              6,471,400       455,800     2,392,000
--------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at the end of the year                                   $6,199,700  $  6,471,400  $    455,800
--------------------------------------------------------------------------------------------------------------------------
</TABLE>

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

<PAGE>

NOTES TO FINANCIAL STATEMENTS
December 31, 2001

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.

In 1998, the Company adopted the Financial Accounting Standards Board's
Statement of Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information". The Partnership has one
reportable segment as the Partnership is in the disposition phase of its life
cycle, wherein it is seeking to liquidate its remaining operating asset.
Management's main focus, therefore, is to prepare its remaining asset for sale
and find a purchaser when market conditions warrant such an action. The
adoption of Statement 131 did not effect the results of operations or financial
position of the Partnership.

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 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. The Partnership
recognizes rental income that is contingent upon tenants' achieving specified
targets, only to the extent that such targets are attained.

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 Federal 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 further depreciation or amortization of such property is provided for in the
financial statements. Lease acquisition fees are recorded at cost and amortized
over the life of each respective 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. The Managing
General Partner was not aware of any indicator that would result in a
significant impairment loss during the periods reported.

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.

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

The Partnership's financial statements include financial instruments, including
receivables and trade liabilities. The fair values of financial instruments,
including cash and cash equivalents, was not materially different from their
carrying values at December 31, 2001 and 2000.

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

                       The accompanying notes are an integral part of the
financial statements.                   A-5

<PAGE>

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 years ended December 31, 2001 and 2000 the General Partners were paid a
Partnership Management Fee and allocated Net Profits of $62,200. For the year
ended December 31, 1999, the General Partners were paid a Partnership
Management Fee of $171,200 and allocated Net Profits of $251,600, which
included a gain on the sale of property of $80,400.

Fees and reimbursements paid and payable/(receivable) by the Partnership
to/(from) Affiliates for the years ended December 31, 2001, 2000 and 1999 were
as follows:

<TABLE>
<CAPTION>
                                                    2001              2000               1999
                                              ---------------- ------------------ -----------------
<S>                                           <C>     <C>      <C>       <C>      <C>      <C>
                                                 Paid  Payable     Paid   Payable     Paid  Payable
----------------------------------------------------------------------------------------------------
Property management and leasing fees          $ 3,300 $   None $(25,300) $   None $ 65,300 $(33,900)
Real estate commission (a)                       None   37,700     None    37,700     None   37,700
Reimbursements of property insurance premiums  20,200     None   20,200      None   25,800     None
Legal                                            None     None     None      None   61,800     None
Reimbursements of expenses at cost:
--Accounting                                    2,000    2,000    5,500      None   16,200    3,800
--Investor communication                       13,300    1,200    6,300     1,100   11,900      900
----------------------------------------------------------------------------------------------------
                                              $38,800 $ 40,900 $  6,700  $ 38,800 $181,000 $  8,500
----------------------------------------------------------------------------------------------------
</TABLE>

(a)As of December 31, 2001, the Partnership owed $37,700 to the Managing
   General Partner for real estate commissions earned in connection with the
   previous sale of Partnership properties. 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.

3. Future minimum rentals:
Future minimum rental income due on noncancelable leases as of December 31,
2001 were as follows:

<TABLE>
                             <S>        <C>
                             2002       $  795,900
                             2003          673,300
                             2004          536,900
                             2005          441,000
                             2006          235,600
                             Thereafter  1,246,400
                             ---------------------
                                        $3,929,100
                             ---------------------
</TABLE>

4. 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. For the years ended
December 31, 2001, 2000 and 1999, net income for tax reporting purposes were
$500,900, $816,700 and $10,961,500, respectively. The aggregate cost of
commercial rental properties for federal income tax purposes at December 31,
2001 was $7,621,200.

5. Property sales:
On November 23, 1999, the Partnership consummated the sale of Brookwood
Metroplex Office Buildings I & II for a sale price of $15,250,000. Net Proceeds
from this transaction amounted to $15,113,000, which was net of closing
expenses. In addition, the Partnership received additional proceeds from the
buyer totaling $1,122,700, which represented a reimbursement for certain costs
incurred in re-tenanting Brookwood. The Partnership recorded a gain of
$5,779,800 for the year ended December 31, 1999 and distributed $13,160,000 or
$188.00 per Unit on May 31, 2000 to Limited Partners of record as of November
23, 1999. The remaining proceeds were retained to facilitate the re-tenanting
of Walker Springs Plaza Shopping Center.

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

6. Subsequent event:
The Partnership completed the sale of Walker Springs on March 15, 2002 to an
unrelated party for $6,210,000 in cash. The Partnership received sale proceeds
of approximately $5,900,000.

A-6

<PAGE>

SCHEDULE III--REAL ESTATE AND ACCUMULATED DEPRECIATION
As of December 31, 2001

<TABLE>
<CAPTION>
                    Column A                            Column C              Column D                   Column E
                    --------                      --------------------- -------------------- ---------------------------------
                                                                         Costs capitalized
                                                      Initial cost         subsequent to           Gross amount at which
                                                    to Partnership(1)       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>
Walker Springs Plaza Shopping Center (Knoxville,
 TN)                                              $1,756,800 $4,440,200 $1,365,100  $98,400  $1,784,700 $5,875,800 $7,660,500
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
                    Column A                         Column F       Column G   Column H     Column I
                    --------                      --------------- ------------ --------- ---------------



                                                                                          Life on which
                                                                                         depreciation in
                                                                                          latest income
                                                    Accumulated     Date of      Date     statements is
                   Description                    Depreciation(3) construction Acquired     computed
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>             <C>          <C>       <C>
Walker Springs Plaza Shopping Center (Knoxville,                                              35(5)
 TN)                                                $3,008,900        1972     Dec. 1983     3-7(6)
--------------------------------------------------------------------------------------------------------
</TABLE>

Column B--Not Applicable.


                 See accompanying notes on the following page

                                                                            A-7

<PAGE>

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>
                                                                     Years Ended
                                     ---------------------------------------------------------------------------
<S>                                  <C>        <C>          <C>        <C>           <C>           <C>
                                        December 31, 2001       December 31, 2000          December 31, 1999
                                     ---------- ------------ ---------- ------------- ------------  ------------
                                                Accumulated               Accumulated                Accumulated
                                        Cost    Depreciation    Cost     Depreciation     Cost      Depreciation
-----------------------------------------------------------------------------------------------------------------
Balance at the beginning of the year $7,472,200   $2,834,000 $7,444,200 $   2,666,300 $ 24,019,400   $ 9,609,400
Additions during the year:
 Improvements                           188,300                  28,000                    374,000
 Provision for depreciation.........                 174,900                  167,700                    672,900
Deductions during the year:
 Basis of real property sold                                                           (16,949,200)
 Accumulated depreciation on sold
   real property....................                                                                  (7,616,000)
-----------------------------------------------------------------------------------------------------------------
Balance at the end of the year       $7,660,500   $3,008,900 $7,472,200 $   2,834,000 $  7,444,200   $ 2,666,300
-----------------------------------------------------------------------------------------------------------------
</TABLE>

Note 4. The aggregate cost for federal income tax purposes at December 31, 2001
was $7,621,200.

Note 5. Estimated useful life for building.

Note 6. Estimated useful life for improvements.

A-8