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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549-1004



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FORM 10-Q



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------



For the period ended September 30, 2003



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 0-12538



First Capital Institutional Real Estate, Ltd.1

(Exact name of registrant as specified in its charter)



|Florida                                                        |  | 59-2197264                          
|-------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|Two North Riverside Plaza, Suite 700, Chicago, Illinois        |  | 60606-2607 (Zip Code)               
|(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   ̈



Indicate by
check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes  x        No   ̈



Documents incorporated by reference:



The First Amended and
Restated Certificate and Agreement of Limited Partnership filed as Exhibit A to the definitive Prospectus dated October 25, 1982, included in the Registrants Registration Statement on Form S-11 (Registration No. 2-79092), is incorporated
herein by reference in Part I of this report.



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PART I. FINANCIAL INFORMATION



ITEM 1. FINANCIAL STATEMENTS



BALANCE SHEETS

(All dollars rounded to nearest 00s)



|                                                            |  | September 30, 2003 (Unaudited) |           | December 31, 2002
|----------------------------------------------------------- |  | ------------------------------ | --------- | -----------------
|                                                           
|                                                            |  |                               
|ASSETS                                                      |  |                                |           |                  
|Cash and cash equivalents                                   |  | $                              | 4,049,800 |                  
|Other assets                                                |  |                                | 3,000     |                  
|                                                           
|                                                            |  | $                              | 4,052,800 |                  
|                                                           
|                                                            | 
|LIABILITIES AND PARTNERS CAPITAL                           |  |                                |          
|Liabilities:                                                |  |                                |           |                  
|Accounts payable and accrued expenses                       |  | $                              | 45,400    |                  
|Other liabilities                                           |  |                                | 2,200     |                  
|                                                           
|Total Liabilities                                           |  |                                | 47,600    |                  
|                                                           
|Commitments and contingencies for environmental remediation |  |                                |          |                  
|Partners capital:                                          |  |                                |           |                  
|General Partners                                            |  |                                | 614,100   |                  
|Limited Partners(60,000 Units issued and outstanding)       |  |                                | 3,391,100 |                  
|                                                           
|                                                            |  |                                | 4,005,200 |                  
|                                                           
|                                                            |  | $                              | 4,052,800 |                  
|                                                           



STATEMENTS OF PARTNERS CAPITAL

For the nine months ended September 30, 2003 (Unaudited)

and the year
ended December 31, 2002

(All dollars rounded to nearest 00s)



|                                                      |  | GeneralPartners |         |   | LimitedPartners |   |           | Total | 
|----------------------------------------------------- |  | --------------- | ------- | - | --------------- | - | --------- | ----- | 
|                                                     
|Partners capital, January 1, 2002                    |  | $               | 615,100 |   |                 | $ | 3,484,000 |       | 
|Net (loss) for theyear endedDecember 31, 2002         |  |                 | (500    | ) |                 |   | (47,100   | )     | 
|                                                     
|Partners capital, December 31, 2002                  |  |                 | 614,600 |   |                 |   | 3,436,900 |       | 
|Net (loss) for thenine months endedSeptember 30, 2003 |  |                 | (500    | ) |                 |   | (45,800   | )     | 
|                                                     
|Partners capital, September 30, 2003                 |  | $               | 614,100 |   |                 | $ | 3,391,100 |       | 
|                                                     



2

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



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STATEMENTS OF INCOME AND EXPENSES

For
the quarters ended September 30, 2003 and 2002

(Unaudited)

(All dollars rounded
to nearest 00s

except per Unit amounts)



|                                                                             |  | 2003 |         |   | 2002 |  
|---------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | -
|                                                                            
|Income:                                                                      |  |      |         |   |      |  
|Interest                                                                     |  | $    | 9,500   |   |      | $
|                                                                            
|                                                                             |  |      | 9,500   |   |      |  
|                                                                            
|Expenses:                                                                    |  |      |         |   |      |  
|General and administrative:                                                  |  |      |         |   |      |  
|Affiliates                                                                   |  |      | 2,500   |   |      |  
|Nonaffiliates                                                                |  |      | 23,900  |   |      |  
|                                                                            
|                                                                             |  |      | 26,400  |   |      |  
|                                                                            
|Net (loss)                                                                   |  | $    | (16,900 | ) |      | $
|                                                                            
|Net (loss) allocated to GeneralPartners                                      |  | $    | (200    | ) |      | $
|                                                                            
|Net (loss) allocated to Limited Partners                                     |  | $    | (16,700 | ) |      | $
|                                                                            
|Net (loss) allocated to Limited Partners per Unit (60,000 Units outstanding) |  | $    | (0.28   | ) |      | $
|                                                                            



STATEMENTS OF INCOME AND EXPENSES

For the nine months ended September 30, 2003 and 2002

(Unaudited)

(All dollars rounded to nearest 00s

except per Unit amounts)



|                                                                             |  | 2003 |         |   | 2002 |  
|---------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | -
|                                                                            
|Income:                                                                      |  |      |         |   |      |  
|Interest                                                                     |  | $    | 33,500  |   |      | $
|                                                                            
|                                                                             |  |      | 33,500  |   |      |  
|                                                                            
|Expenses:                                                                    |  |      |         |   |      |  
|General and administrative:                                                  |  |      |         |   |      |  
|Affiliates                                                                   |  |      | 7,300   |   |      |  
|Nonaffiliates                                                                |  |      | 72,500  |   |      |  
|                                                                            
|                                                                             |  |      | 79,800  |   |      |  
|                                                                            
|Net (loss)                                                                   |  | $    | (46,300 | ) |      | $
|                                                                            
|Net (loss) allocated to General Partners                                     |  | $    | (500    | ) |      | $
|                                                                            
|Net (loss) allocated to Limited Partners                                     |  | $    | (45,800 | ) |      | $
|                                                                            
|Net (loss) allocated to Limited Partners per Unit (60,000 Units outstanding) |  | $    | (0.76   | ) |      | $
|                                                                            



STATEMENTS OF CASH FLOWS

For the nine months ended September 30, 2003 and 2002

(Unaudited)

(All dollars rounded to nearest 00s)



|                                                                                 |  | 2003 |           |   | 2002 |  
|-------------------------------------------------------------------------------- |  | ---- | --------- | - | ---- | -
|                                                                                
|Cash flows from operating activities:                                            |  |      |           |   |      |  
|Net (loss)                                                                       |  | $    | (46,300   | ) |      | $
|Adjustments to reconcile net (loss) to net cash (used for) operating activities: |  |      |           |   |      |  
|Changes in assets and liabilities:                                               |  |      |           |   |      |  
|Decrease in other assets                                                         |  |      | 1,700     |   |      |  
|Increase in accounts payable and accrued expenses                                |  |      | 8,500     |   |      |  
|Increase in due to Affiliates                                                    |  |      |          |   |      |  
|(Decrease) in other liabilities                                                  |  |      | (2,800    | ) |      |  
|                                                                                
|Net cash (used for) operating activities                                         |  |      | (38,900   | ) |      |  
|                                                                                
|Cash and cash equivalents at the beginning of the period                         |  |      | 4,088,700 |   |      |  
|                                                                                
|Cash and cash equivalents at the end of the period                               |  | $    | 4,049,800 |   |      | $
|                                                                                



3

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



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NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2003



1. Summary of significant accounting policies:



Definition of special terms:

Capitalized terms used in this report have the same meaning
as those terms 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 accompanying unaudited financial statements have been prepared in accordance with accounting principles
generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting
principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating
results for the quarter and nine months ended September 30, 2003 are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. Reference is made to the Partnerships Annual Report for the year ended
December 31, 2002, 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.



The Partnership has disposed of its real estate properties and upon resolution of the environmental matter disclosed in Note 3, the Partnership will make a liquidating distribution
and dissolve.



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 accounting principles generally accepted in the United States 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.



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



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.



2. Related party transactions:



In accordance with the Partnership Agreement, subsequent to March 31, 1983, the Termination of the Offering, the General Partners are entitled to 10% of Cash Flow (as defined by the Partnership Agreement) as their Subordinated
Partnership Management Fee, provided that Limited Partners first receive specified non-cumulative annual rates of return on their Capital Investment.



In accordance with the Partnership Agreement, Net Profits (exclusive of depreciation and Net Profits from the sale, disposition, or provision for value impairment of Partnership
properties) are allocated: first, to the General Partners, in an amount equal to the greater of the General Partners Subordinated 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, to the General Partners, in an amount equal to the aggregate amount of depreciation previously allocated to them; second, 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; third, to the General Partners, in an amount necessary to make the aggregate
amount of their capital accounts equal to the greater of the Sale 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 fourth, the balance, if any, to the Limited
Partners. Net Losses (exclusive of depreciation and 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. All depreciation is
allocated 10% to the General Partners and 90% 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 (collectively, 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 and among them (in the ratio which their respective capital account
balances bear to the aggregate of all capital account 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 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. The General Partners were not entitled to cash distributions for the
quarters and nine months ended September 30, 2003 and 2002. For the quarter and nine months ended September 30, 2003, the General Partners were allocated Net (Losses) of $(200) and $(500), respectively. For the quarter and nine months ended
September 30, 2002, the General Partners were allocated Net (Losses) of $(0) and $(300), respectively.



Fees and reimbursements paid and payable by the Partnership to Affiliates during the quarter and nine months ended September 30, 2003 were as follows:



|                                   |  | Paid    |       |            
|---------------------------------- |  | ------- | ----- | -----------
|                                   |  | Quarter |       | Nine Months
|                                  
|Reimbursement ofexpenses, at cost: |  |         |       |            
|Accounting                        |  | $       | 2,500 |            
|                                  



4



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3. Environmental matter



In 1996, the Managing 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 thesehazardous
substances. At the present time, the Managing General Partner is unaware of any claims or other matters referred to above against the Partnership. The purchaser has completed the initial stage of the Remediation Action Plan which was approved by the
Los Angeles Regional Water Quality Control Board. However, there can be no assurance as to the timing of the completion of the remediation process. The Managing General Partner continues to monitor the documentation delivered by the purchaser
regarding the purchasers activities to remedy the hazardous substances at Lakewood.



5



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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, 2002 for a discussion of the Partnerships business.



The following Managements Discussion and Analysis of Financial Condition and Results of Operation may contain various forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements can be identified by the use of forward-looking terminology such as believes,
expects, prospects, estimated, should, may or the negative thereof or other variations thereon or comparable terminology indicating the Partnerships expectations or beliefs concerning
future events. The Partnership cautions that such statements are qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements. These risks and uncertainties should be considered in
evaluating forward-looking statements and undue reliance should not be placed on such statements.



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



Operations

Net (loss) changed from $(7,000) and $(32,100) for the quarter and nine months ended September 30, 2002 to $(16,900) and $(46,300) for the quarter and nine months ended September 30, 2003, respectively. The changes were
primarily due to a decrease in salary expense, offset by a decrease in the interest earned on the Partnerships short-term investments, the result of a decrease in the interest rates earned on those investments.



Liquidity and Capital Resources

The decrease in the Partnerships cash position of $(38,900) for the nine months ended September 30, 2003 was the result of net cash used for operating activities. Liquid assets (including cash and cash equivalents) of the
Partnership as of September 30, 2003 were comprised of amounts reserved for the Lakewood Square Shopping Center (Lakewood) (sold in 1997) environmental matter (as hereafter discussed) and Partnership liquidation expenses.



Net cash (used for) operating activities changed from $(20,500) for the nine months ended September
30, 2002 to $(38,900) for the nine months ended September 30, 2003. The change was primarily due to the payment of outstanding obligations at December 31, 2002 and the change in net (loss) as previously discussed.



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



As described in Note 3 of the Notes to Financial Statements, the Partnership is awaiting resolution
of an environmental matter at Lakewood. The Managing 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. As a result of this, it will be necessary for the Partnership to remain in existence and maintain a reserve for such
costs. When the environmental matter at Lakewood is remediated to the satisfaction of the Partnership, Limited Partners will receive a final liquidating distribution of the remaining cash held by the Partnership, less amounts reserved for
administrative expenses and any amounts deemed necessary to resolve, or provide for, any post-closing matters.



6



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ITEM 4. CONTROLS AND PROCEDURES



Evaluation of Disclosure Controls and Procedures

The principal executive officer of the
Managing General Partner, Donald J. Liebentritt, and the principal financial officer of the Managing General Partner, Philip Tinkler, evaluated as of September 30, 2003 the effectiveness of the design and operation of the Partnerships
disclosure controls and other procedures that are designed to ensure that information required to be disclosed in the reports that the Partnership files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the SECs rules and forms. As a result of this evaluation, these executive officers have concluded that, as of such date, the design and operation of the Partnerships disclosure controls and
procedures were effective.



Changes in Internal Controls over Financial Reporting

There were no changes in the Partnerships internal controls over financial reporting identified in connection with the evaluation referred to above that
have materially affected, or are reasonably likely to materially affect, the Partnerships internal controls over financial reporting.



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PART II. OTHER INFORMATION



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



(a) Exhibits:



31.1: Certification of Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).



31.2: Certification of Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the
Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).



32.1: Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(filed herewith).



(b) Reports on Form 8-K:



There were no reports filed on Form 8-K for the quarter ended September 30, 2003.



8



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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.1
|------------------------ |  |  |  | -----------------------------------------------
|                         |  |  | 
|                         |  |  |  | By:                                            
|                         |  |  |  |                                                
|                         |  |  | 
|Date:  November 12, 2003 |  |  |  | By:                                            
|                         |  |  |  |                                                
|                         |  |  | 
|Date:  November 12, 2003 |  |  |  | By:                                            
|                         |  |  |  |                                                



9