<PAGE>

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

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

                                   FORM 10-Q

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

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

    For the period ended September 30, 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 0-12538

               First Capital Institutional Real Estate, Ltd.--1
            (Exact name of registrant as specified in its charter)

                          Florida                 59-2197264
              (State or other jurisdiction of  (I.R.S. Employer
              incorporation or organization)  Identification No.)

                     Two North Riverside Plaza,        60606-2607
                             Suite 600,                (Zip Code)
                         Chicago, Illinois
              (Address of principal executive offices)

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

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

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

Documents incorporated by reference:

The First Amended and Restated Certificate and Agreement of Limited Partnership
filed as Exhibit A to the 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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<PAGE>

BALANCE SHEETS
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                        September 30,
                                            2001      December 31,
                                         (Unaudited)      2000
              <S>                       <C>           <C>
              ----------------------------------------------------

              ASSETS
              Cash and cash equivalents  $ 4,140,700  $ 4,084,100
              Other assets                       200          200
              ----------------------------------------------------
                                         $4,140,900   $4,084,300
              ----------------------------------------------------

              LIABILITIES AND PARTNERS' CAPITAL
              Liabilities:
               Accounts payable and
                 accrued expenses        $    33,800  $    31,400
               Due to Affiliates               3,900        1,200
               Other liabilities               2,400        2,400
              ----------------------------------------------------
                                         40,100       35,000
              ----------------------------------------------------
              Partners' capital:
               General Partners              615,100      614,600
               Limited Partners (60,000
                 Units issued and
                 outstanding)              3,485,700    3,434,700
              ----------------------------------------------------
                                         4,100,800    4,049,300
              ----------------------------------------------------
                                         $ 4,140,900  $ 4,084,300
              ----------------------------------------------------
</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the nine months ended September 30, 2001 (Unaudited)
and the year ended December 31, 2000
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                   General   Limited
                                   Partner   Partners    Total
               <S>                 <C>      <C>        <C>
               --------------------------------------------------
               Partners' capital,
                 January 1, 2000   $613,100 $3,288,200 $3,901,300
               Net income for the
                 year ended
                 December 31, 2000    1,500    146,500    148,000
               --------------------------------------------------
               Partners' capital,
                 December 31, 2000  614,600  3,434,700  4,049,300
               Net income for the
                 nine months ended
                 September 30,
                 2001                   500     51,000     51,500
               --------------------------------------------------
               Partners' capital,
                 September 30,
                 2001              $615,100 $3,485,700 $4,100,800
               --------------------------------------------------
</TABLE>

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

<PAGE>

STATEMENTS OF INCOME AND EXPENSES
For the quarters ended September 30, 2001 and 2000
(Unaudited)
(All dollars rounded to nearest 00s except per Unit amounts)

<TABLE>
<CAPTION>
                                                2001      2000
             <S>                               <C>       <C>
             -------------------------------------------------
             Income:
              Interest                         $37,900   $63,100
             -------------------------------------------------
                                                37,900    63,100
             -------------------------------------------------
             Expenses:
              General and administrative:
                Affiliates                       6,700     1,400
                Nonaffiliates                   26,900    22,800
             -------------------------------------------------
                                                33,600    24,200
             -------------------------------------------------
             Net income                        $ 4,300   $38,900
             -------------------------------------------------
             Net income allocated to General
               Partners                        $    --   $   400
             -------------------------------------------------
             Net income allocated to Limited
               Partners                        $ 4,300   $38,500
             -------------------------------------------------
             Net income allocated to Limited
               Partners per Unit (60,000 Units
               outstanding)                    $  0.07   $  0.64
             -------------------------------------------------
</TABLE>

STATEMENTS OF INCOME AND EXPENSES
For the nine months ended September 30, 2001 and 2000
(Unaudited)
(All dollars rounded to nearest 00s except per Unit amounts)

<TABLE>
<CAPTION>
                                                2001       2000
            <S>                               <C>        <C>
            ---------------------------------------------------
            Income:
             Interest                         $139,300   $187,400
            ---------------------------------------------------
                                               139,300    187,400
            ---------------------------------------------------
            Expenses:
             General and administrative:
               Affiliates                       11,400      6,600
               Nonaffiliates                    76,400     72,400
            ---------------------------------------------------
                                                87,800     79,000
            ---------------------------------------------------
            Net income                        $ 51,500   $108,400
            ---------------------------------------------------
            Net income allocated to General
              Partners                        $    500   $  1,100
            ---------------------------------------------------
            Net income allocated to Limited
              Partners                        $ 51,000   $107,300
            ---------------------------------------------------
            Net income allocated to Limited
              Partners per Unit (60,000 Units
              outstanding)                    $   0.85   $   1.79
            ---------------------------------------------------
</TABLE>
STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 2001 and 2000
(Unaudited)
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                                  2001       2000
           <S>                                 <C>         <C>
           ---------------------------------------------------------
           Cash flows from operating
             activities:
            Net income                         $    51,500 $ 108,400
            Adjustments to reconcile net
              income to net cash provided
              by operating activities:
              Changes in assets and
                liabilities:
                (Increase) in other assets                      (200)
                Increase (decrease) in
                  accounts payable and
                  accrued expenses                   2,400   (14,900)
                Increase (decrease) in due
                  to Affiliates                      2,700    (2,100)
           ---------------------------------------------------------
                  Net cash provided by
                    operating activities            56,600    91,200
           ---------------------------------------------------------
           Cash flows from investing
             activities:
            (Increase) in investments in debt
              securities, net                           --   (17,600)
           ---------------------------------------------------------
                  Net cash (used for)
                    investing activities                --   (17,600)
           ---------------------------------------------------------
                  Net cash from financing
                    activities                          --        --
           ---------------------------------------------------------
           Net increase in cash and cash
             equivalents                            56,600    73,600
           ---------------------------------------------------------
           Cash and cash equivalents at the
             beginning of the period             4,084,100   220,800
           ---------------------------------------------------------
           Cash and cash equivalents at the
             end of the period                 $4,140,700  $294,400
           ---------------------------------------------------------
</TABLE>

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

<PAGE>

NOTES TO FINANCIAL STATEMENTS
(Unaudited)
June 30, 2001

1. Summary of significant accounting policies:

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

Accounting policies:
The Partnership has disposed of its real estate properties. Upon resolution of
the environmental matter disclosed in Note 3 and other post closing matters
related to the sale of the Partnership's properties, the Partnership will make
a liquidating distribution and dissolve.

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

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

The financial information included in these financial statements is unaudited;
however, in management's opinion, all adjustments (consisting of only normal,
recurring accruals) necessary for a fair presentation of the results of
operations for the periods included have been made. Results of operations for
the quarter and nine months ended September 30, 2001 are not necessarily
indicative of the operating results for the year ending December 31, 2001.

Cash equivalents are considered all highly liquid investments with 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.

Reference is made to the Partnership's Annual Report for the year ended
December 31, 2000, for a description of other accounting policies and
additional details of the Partnership's financial condition, results of
operations, changes in Partners' capital and changes in cash balances for the
year then ended. The details provided in the notes thereto have not changed
except as a result of normal transactions in the interim or as otherwise
disclosed herein.

2. Related party transactions:

In accordance with the Partnership Agreement, subsequent to March 31, 1983, the
Termination of the Offering, the General Partners are entitled to 10% of Cash
Flow (as defined in 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 or disposition 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; 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, 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 a Subordinated Partnership Management Fee
for the quarters and nine months ended September 30, 2001 and 2000. For the
quarter and nine months ended September 30, 2001 the General Partners were
allocated Net Profits of $0 and $500, respectively. For the quarter and nine
months ended September 30, 2000 the General Partners were allocated Net Profits
of $400 and $1,100, respectively.

Fees and reimbursements paid and payable by the Partnership to Affiliates
during the quarter and nine months ended September 30, 2001 were as follows:

<TABLE>
<CAPTION>
                                Paid
                           --------------
                                    Nine
                           Quarter Months Payable
<S>                        <C>     <C>    <C>
-------------------------------------------------
Reimbursement of expenses,
  at cost:
 --Accounting              $   --  $   -- $2,000
 --Investor communications  6,800   8,700  1,900
-------------------------------------------------
                           $6,800  $8,700 $3,900
-------------------------------------------------
</TABLE>

                                                                             5

<PAGE>

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 these
hazardous 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's revised remedial action plan (the "Plan") for the
site has been approved by the California Regional Water Quality Control Board
(the "Water Board"). The remediation is scheduled to begin in 2002, providing
the proper permits are obtained. There can be no assurance as to the timing or
successful completion of the Plan. 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.




TRANSFER AGENT AND REGISTRAR
THE BANK OF NEW YORK
P.O. Box 7090
Troy, Michigan 48007-7090
(800) 447-7364




  [LOGO] First Capital
Institutional
Real Estate, Ltd.-1
                                    [Graphic]

sponsored by FIRST CAPITAL FINANCIAL LLC
      Two North Riverside Plaza
      Chicago, Illinois 60606

<PAGE>

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

Reference is made to the Partnership's Annual Report for the year ended
December 31, 2000 for a discussion of the Partnership's business.

Statements contained in this Management's Discussion and Analysis of Financial
Condition and Results of Operations, which are not historical facts, may be
forward-looking statements. Such statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially from those
projected. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.

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

Operations
Net income decreased by $34,600 and $56,900 for the quarter and nine months
ended September 30, 2001 when compared to the quarter and nine months ended
September 30, 2000. The decreases were primarily due to a decrease in interest
earned on the Partnership's short-term investments, which was due to a decrease
in the interest rates earned on those investments.

Liquidity and Capital Resources
The increase in the Partnership's cash position of $56,600 during the nine
months ended September 30, 2001 was primarily due to net cash provided by
operating activities. Liquid assets, including cash and cash equivalents, as of
September 30, 2001 were comprised of amounts reserved for the Lakewood
environmental contingency (as hereafter discussed) and Partnership liquidation
expenses.

Net cash provided by operating activities decreased by $34,600 for the nine
months ended September 30, 2001 when compared to the nine months ended
September 30, 2000. The decrease was primarily due to the decrease in net
income as previously discussed. The decrease was partially offset due to the
timing of the payment of certain Partnership expenses.

Net cash provided by investing activities decreased by $17,600 for the nine
months ended September 30, 2001 when compared to the nine months ended
September 30, 2000. The decrease was primarily due to the maturity of the
Partnership's investments in debt securities during 2000.

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

As described in Note 3 of Notes to Financial Statements, the Partnership is
awaiting resolution of an environmental matter at Lakewood. The 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. When the environmental matter at Lakewood is
satisfactorily remediated, 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.

2

<PAGE>

PART II. OTHER INFORMATION

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

(a) Exhibits: None

(b) Reports on Form 8-K:

There were no reports filed on Form 8-K for the three months ended September
30, 2001.

6

<PAGE>

SIGNATURES

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

                                          FIRST CAPITAL INSTITUTIONAL REAL
                                          ESTATE, LTD.--1

                                          By: FIRST CAPITAL FINANCIAL LLC
                                             MANAGING GENERAL PARTNER

                                                   /s/ DOUGLAS CROCKER II
Date: November 13, 2001
                                          By: _________________________________
                                                     DOUGLAS CROCKER II
                                             President and Chief Executive
                                                          Officer

                                                   /s/ PHILIP G. TINKLER
Date: November 13, 2001
                                          By: _________________________________
                                                     PHILIP G. TINKLER
                                             Vice President--Finance and
                                                         Treasurer

                                                                             7