<PAGE>


                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                          Washington, D.C. 20549-1004

                                   FORM 10-Q

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

        For the period ended            September 30, 1999
                              --------------------------------------
                                   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               0-15632
                              --------------------------------------

               First Capital Institutional Real Estate, Ltd. - 4
             -----------------------------------------------------
            (Exact name of registrant as specified in its charter)


            Illinois                                             36-3441345
-------------------------------                             -------------------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

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

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

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


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

The First Amended and Restated Certificate and Agreement of Limited Partnership
filed as Exhibit A to the Partnership's Prospectus dated November 5, 1986,
included in the Partnership's Registration Statement on Form S-11, is
incorporated herein by reference in Part I of this report.


<PAGE>

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BALANCE SHEETS
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                               September 30,
                                                   1999      December 31,
                                                (Unaudited)      1998
-------------------------------------------------------------------------
<S>                                            <C>           <C>
ASSETS
Investment in commercial rental property:
 Land                                           $ 2,509,900  $ 2,509,900
 Buildings and improvements                      15,548,600   15,548,600
-------------------------------------------------------------------------
                                                 18,058,500   18,058,500
 Accumulated depreciation and amortization       (4,499,700)  (4,177,200)
-------------------------------------------------------------------------
 Total investment property, net of accumulated
  depreciation and amortization                  13,558,800   13,881,300
Cash and cash equivalents                           568,000    1,107,100
Investments in debt securities                    4,325,900    3,499,300
Rents receivable                                    115,800      179,600
Other assets                                         12,700       12,700
-------------------------------------------------------------------------
                                                $18,581,200  $18,680,000
-------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
 Accounts payable and accrued expenses          $   466,500  $   378,200
 Due to Affiliates                                   41,900       42,700
 Distributions payable                              365,500      389,300
 Security deposits                                   29,100       25,900
 Other liabilities                                   55,000       36,900
-------------------------------------------------------------------------
                                                    958,000      873,000
-------------------------------------------------------------------------
Partners' capital:
 General Partner                                     40,300       40,300
 Limited Partners (593,025 Units issued and
  outstanding)                                   17,582,900   17,766,700
-------------------------------------------------------------------------
                                                 17,623,200   17,807,000
-------------------------------------------------------------------------
                                                $18,581,200  $18,680,000
-------------------------------------------------------------------------
</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the nine months ended September 30, 1999 (Unaudited) and the year ended
December 31, 1998
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                            General     Limited
                                            Partner    Partners       Total
-------------------------------------------------------------------------------
<S>                                         <C>       <C>          <C>
Partners' capital, January 1, 1998          $ 40,300  $17,767,800  $17,808,100
Net income for the year ended December 31,
 1998                                         92,800    1,185,000    1,277,800
Distributions for the year ended December
 31, 1998                                    (92,800)  (1,186,100)  (1,278,900)
-------------------------------------------------------------------------------
Partners' capital, December 31, 1998          40,300   17,766,700   17,807,000
Net income for the nine months ended
 September 30, 1999                           69,000      705,700      774,700
Distributions for the nine months ended
 September 30, 1999                          (69,000)    (889,500)    (958,500)
-------------------------------------------------------------------------------
Partners' capital, September 30, 1999       $ 40,300  $17,582,900  $17,623,200
-------------------------------------------------------------------------------
</TABLE>
    The accompanying notes are an integral part of the financial statements
                                                                               2
<PAGE>

STATEMENTS OF INCOME AND EXPENSES
For the quarters ended September 30, 1999 and 1998
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)

<TABLE>
<CAPTION>
                                                      1999       1998
------------------------------------------------------------------------
<S>                                                <C>        <C>
Income:
 Rental                                            $  523,500 $  457,200
 Interest                                              66,700     63,500
------------------------------------------------------------------------
                                                      590,200    520,700
------------------------------------------------------------------------
 Expenses:
 Depreciation and amortization                        107,500    107,500
 Property operating:
  Affiliates                                           15,200      4,500
 Nonaffiliates                                         43,600     46,000
 Real estate taxes                                     76,000     73,900
 Insurance--Affiliate                                   4,800      7,000
 Repairs and maintenance                               18,900     43,200
 General and administrative:
  Affiliates                                            5,900      4,600
 Nonaffiliates                                         26,200     18,800
------------------------------------------------------------------------
                                                      298,100    305,500
------------------------------------------------------------------------
 Net income                                        $  292,100 $  215,200
------------------------------------------------------------------------
 Net income allocated to General Partner           $   23,000 $   18,000
------------------------------------------------------------------------
 Net income allocated to Limited Partners          $  269,100 $  197,200
------------------------------------------------------------------------
 Net income allocated to Limited Partners per Unit
  (593,025 Units outstanding)                      $     0.45 $     0.33
------------------------------------------------------------------------
<CAPTION>
                                                      1999       1998
------------------------------------------------------------------------
<S>                                                <C>        <C>
 Income:
 Rental                                            $1,557,700 $1,488,200
 Interest                                             183,800    376,200
------------------------------------------------------------------------
                                                    1,741,500  1,864,400
------------------------------------------------------------------------
 Expenses:
 Interest on loan payable to General Partner                      56,000
 Depreciation and amortization                        322,500    321,100
 Property operating:
 Affiliates                                            26,800      9,500
  Nonaffiliates                                       153,400    178,400
 Real estate taxes                                    228,000    222,300
 Insurance--Affiliate                                  13,800     13,500
 Repairs and maintenance                               99,700    100,500
 General and administrative:
 Affiliates                                            16,200     16,300
 Nonaffiliates                                        106,400     66,800
------------------------------------------------------------------------
                                                      966,800    984,400
------------------------------------------------------------------------
 Net income                                        $  774,700 $  880,000
------------------------------------------------------------------------
 Net income allocated to General Partner           $   69,000 $   54,000
------------------------------------------------------------------------
 Net income allocated to Limited Partners          $  705,700 $  826,000
------------------------------------------------------------------------
 Net income allocated to Limited Partners per Unit
  (593,025 Units outstanding)                      $     1.19 $     1.39
------------------------------------------------------------------------
</TABLE>

STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 1999 and 1998
(Unaudited)
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                                        1999        1998
-----------------------------------------------------------------------------
<S>                                                  <C>         <C>
Cash flows from operating activities:
 Net income                                          $  774,700  $   880,000
 Adjustments to reconcile net income to net cash
  provided by operating activities:
  Depreciation and amortization                         322,500      321,100
  Changes in assets and liabilities:
   Decrease in rents receivable                          63,800       70,400
   Decrease in other assets                                           17,100
   Increase in accounts payable and accrued expenses     88,300       44,900
   (Decrease) in due to Affiliates                         (800)      (5,100)
   Increase (decrease) in other liabilities              18,100       (7,500)
-----------------------------------------------------------------------------
    Net cash provided by operating activities         1,266,600    1,320,900
-----------------------------------------------------------------------------
Cash flows from investing activities:
 (Increase) decrease in investments in debt
  securities, net                                      (826,600)     347,700
 Payments for capital and tenant improvements                        (15,000)
 Decrease in restricted cash                                          50,000
-----------------------------------------------------------------------------
    Net cash (used for) provided by investing
     activities                                        (826,600)     382,700
-----------------------------------------------------------------------------
Cash flows from financing activities:
 Distributions paid to Partners                        (982,300)  (7,526,200)
 (Net repayment of) loan payable to General Partner               (1,569,500)
 Increase (decrease) in security deposits                 3,200       (3,300)
-----------------------------------------------------------------------------
    Net cash (used for) financing activities           (979,100)  (9,099,000)
-----------------------------------------------------------------------------
Net (decrease) in cash and cash equivalents            (539,100)  (7,395,400)
Cash and cash equivalents at the beginning of the
 period                                               1,107,100   10,407,900
-----------------------------------------------------------------------------
Cash and cash equivalents at the end of the period   $  568,000  $ 3,012,500
-----------------------------------------------------------------------------
Supplemental information:
 Interest paid to General Partner during the period  $           $    56,000
-----------------------------------------------------------------------------
</TABLE>

    The accompanying notes are an integral part of the financial statements
                                                                               3
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(Unaudited)
September 30, 1999

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 Agreement of Limited Partnership,
which is included in the Registration Statement and incorporated herein by
reference.

ACCOUNTING POLICIES:
The financial statements have been prepared in accordance with generally
accepted accounting principles ("GAAP"). The Partnership utilizes the accrual
method of accounting. Under this method, revenues are recorded when earned and
expenses are recorded when incurred. 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 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, 1999 are not necessarily
indicative of the operating results for the year ending December 31, 1999.

Commercial rental property is 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. Lease acquisition fees
are recorded at cost and amortized over the life of the lease. Repair and
maintenance costs are expensed as incurred; expenditures for improvements are
capitalized and depreciated over the estimated life of such improvements.

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

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 assets. Management's main focus, therefore, is to prepare
its asset for sale and find a purchaser when market conditions warrant such an
action. The Partnership has two tenants who occupy 41% of the Partnership's
rental property. These tenants occupied 24% and 17% of the Partnership's
rentable space, respectively.

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

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

Reference is made to the Partnership's annual report for the year ended
December 31, 1998, 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, as compensation for services
rendered in managing the affairs of the Partnership, the General Partner shall
be entitled to receive subsequent to May 4, 1988, the Termination of the
Offering, a Partnership Management Fee payable annually within 60 days
following the last day of each fiscal year, which shall be an amount equal to
the lesser of (i) 0.5% of the net value of the Partnership's assets as of the
end of such fiscal year reflected on the Certificate of Value furnished to the
Limited Partners, plus, to the extent the Partnership Management Fee paid in
any prior year was less than 0.5% of the net value of the Partnership's assets
in such prior year, the amount of such deficit, or (ii) an amount equal to the
difference between 10% of the Partnership's aggregate Cash Flow (as defined in
the Partnership Agreement) for the period from the Commencement of Operations
to the end of the fiscal year for which such Partnership Management Fee is
payable, and the aggregate amount previously paid to the General Partner as a
Partnership Management Fee. Sale Proceeds are distributed: first, 75% to all
Limited Partners and 25% to the General Partner until the earlier of (i)
receipt by Limited Partners of cumulative distributions of Sale Proceeds in an
amount equal to 100% of their Original Capital Contribution, or (ii) receipt by
the General Partner of cumulative distributions of Sale Proceeds sufficient to
repay all outstanding advances to the Partnership from the General Partner;
thereafter, to the General Partner, until all outstanding advances, if any, to
the Partnership from the General Partner have been repaid; thereafter, to the
Limited Partners, until they have received cumulative distributions of Sale
Proceeds in an amount equal to 100% of their Original Capital Contribution,
plus an amount (including Cash Flow (as defined in the Partnership Agreement))
equal to a cumulative return of 6% per annum simple interest on their Capital
Investment from their investment date in the Partnership; thereafter, 85% to
all Limited Partners; and 15% to the General Partner, provided, however, that
no distribution of the General Partner's 15% share of Sale Proceeds shall be
made until Limited Partners have received the greater of (i) Sale Proceeds plus
Cash Flow (as defined in the Partnership Agreement) previously received in
excess of the Preferred Return equal to 125% of the Limited Partners' Original
Capital Contribution, or (ii) Sale Proceeds plus all Cash Flow (as defined in
the Partnership Agreement) previously received equal to their Original Capital
Contribution plus a 10% per annum simple interest return on their Capital
Investment from the date of investment.

In accordance with the Partnership Agreement, Net Profits (exclusive of Net
Profits from the sale or disposition of Partnership properties) shall be
allocated to the General Partner in an amount equal to the greater of 1% of
such Net Profits or the Partnership Management Fee paid by the Partnership to
the General Partner during such year, and the balance, if any, to the Limited
Partners. Net Losses (exclusive of Net Losses from the sale, disposition or
provision for value impairment of Partnership properties) are allocated 1% to
the General Partner and 99% to the Limited Partners. Net Profits from the sale
or disposition of a Partnership property are allocated: first, prior to giving
effect to any distributions of Sale Proceeds from the transaction, to the
General Partner and 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 each Limited Partner
in an amount, if any, necessary to make the positive balance in its Capital
Account equal to the Sale Proceeds to be distributed to such Limited Partner
with respect to the sale or disposition of such property; third, to the General
Partner in an amount, if any, necessary to make the positive balance in its
Capital Account equal to the Sale Proceeds to be distributed to the General
Partner with respect to the sale or disposition of such property; and fourth,
the balance, if any, 15% to the General Partner and 85% to the Limited
Partners. Net Losses from the sale, disposition or provision for value
impairment of Partnership properties are allocated: first, after giving effect
to any distributions of Sale Proceeds from the transaction to the General
Partner and Limited Partners with positive balances in their Capital Accounts,
pro rata in proportion to such respective positive balances, to the extent of
the total amount of such positive balances; and second, the balance, if any, 1%
to the General Partner and 99% to the Limited Partners. Notwithstanding
anything to the contrary, there shall be allocated to the General Partner not
less than 1% of all items of Partnership income, gain, loss, deduction and
credit during the existence of the Partnership. For the quarter and nine months
ended September 30, 1999, the General Partner was allocated earnings and
accrued a Partnership Management Fee of $23,000 and $69,000, respectively.

In accordance with the Partnership Agreement, the General Partner made advances
to the Partnership in cumulative amounts equal to the Acquisition Fees and the
Partnership Management Fees which were paid to the General Partner or its
Affiliates for distribution to the Limited Partners on a pro rata basis to the
extent that Cash Flow (as defined in the Partnership Agreement) was less than
sufficient to distribute cash in amounts equal to the Limited Partners'
Preferred Return (7.5% per annum noncompounding cumulative return on the
Limited Partners' Capital Investment); provided, however, that the maximum
amount which was to be advanced to the Partnership by the General Partner for
distribution to the Limited Partners was the amount of Acquisition Fees and
Partnership Management Fees actually paid to the General Partner or its
Affiliates. Amounts advanced bore interest at the rate of 8.5% per annum simple
interest, payable monthly. Repayment of amounts advanced were made only from
Cash Flow (as defined in the Partnership Agreement) if and to the extent it is
more than sufficient to distribute cash to the Limited Partners in amounts
equal to the Limited Partners' Preferred Return and from Sale Proceeds to the
extent permitted in the Partnership Agreement. During the nine months ended
September 30, 1998, the Partnership, in accordance with the Partnership
Agreement, repaid the General Partner the remaining outstanding balance on the
loan of $1,569,500, utilizing a portion of the Sale Proceeds from the sale of
Park Plaza Professional Building ("Park Plaza").

Fees and reimbursements paid and payable by the Partnership to Affiliates
during the quarter and nine months ended September 30, 1999 were as follows:

<TABLE>
<CAPTION>
                                                    Paid
                                               ---------------
                                                        Nine
                                               Quarter Months  Payable
----------------------------------------------------------------------
 <S>                                           <C>     <C>     <C>
 Asset management fees                         $ 4,200 $ 9,400    None
 Real estate commissions (a)                      None    None  40,200
 Reimbursement of property insurance premiums    4,800  13,800    None
 Legal                                          11,200  17,700    None
 Reimbursement of expenses, at cost:
 --Accounting                                    3,500   9,000   1,100
 --Investor communication                        2,900   7,500     600
----------------------------------------------------------------------
                                               $26,600 $57,400 $41,900
----------------------------------------------------------------------
</TABLE>
(a) As of September 30, 1999, the Partnership owed $40,200 to the General
    Partner for real estate commissions earned in connection with the sales of
    Partnership properties. These commissions have been accrued but not paid.
    In accordance with the Partnership Agreement, the Partnership will not pay
    the General Partner or any Affiliates a real estate commission from the
    sale of a Partnership property until Limited Partners have received
    cumulative distributions of Sale or Financing 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 investment date) of 6%
    simple interest per annum on their Capital Investment.
4
<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, 1998 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.

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 also
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. Partnership operations are
generally expected to decline as real property interests are sold since the
Partnership no longer receives income generated from such real property
interests. As of September 30, 1999, the Partnership has sold all of its real
property investments with the exception of Indian Ridge Plaza Shopping Center
("Indian Ridge").

OPERATIONS
The table below includes a recap of the Partnership's share of certain
operating results of its properties for the quarters and nine months ended
September 30, 1999 and 1998. 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 Quarters    For the Nine Months
                                  Ended                Ended
                            -----------------  ---------------------
                            9/30/99  9/30/98    9/30/99    9/30/98
---------------------------------------------------------------------
<S>                         <C>      <C>       <C>        <C>
INDIAN RIDGE PLAZA SHOPPING CENTER
Rental revenues             $503,800 $490,100  $1,538,000 $1,512,700
---------------------------------------------------------------------
Property net income         $236,900 $209,300  $  692,900 $  695,700
---------------------------------------------------------------------
Average occupancy                87%      89%         88%        89%
---------------------------------------------------------------------
SOLD PROPERTIES (B)
---------------------------------------------------------------------
Rental revenues             $ 19,800 $(32,800) $   19,800 $  (24,600)
---------------------------------------------------------------------
Property net income (loss)  $ 19,800 $(29,800) $   19,800 $  (47,000)
---------------------------------------------------------------------
</TABLE>
(a) Excludes certain income and expense items which are not directly related to
    individual property operating results such as interest income, interest
    expense and general and administrative expenses.
(b) Sold Properties includes results from Park Plaza Professional Building
    ("Park Plaza") and Carrollton Crossroads Shopping Center ("Carrollton"),
    which were sold during 1997.

Unless otherwise disclosed, discussions of fluctuations between 1999 and 1998
refer to both the quarters and nine-month periods ended September 30, 1999 and
1998.

Net income decreased by $105,300 for the nine months ended September 30, 1999
when compared to the nine months ended September 30, 1998. The decrease was
primarily the result of a decrease in interest earned on the Partnership's
short-term investments caused by fewer funds available for investment, which
was due to the May 1998 distribution of Park Plaza Sale Proceeds. The decrease
was partially offset by the effects of post sale operations at Carrollton and
Park Plaza and the nonrecurrence of interest expense on the loan payable to the
General Partner.

Net income increased by $76,900 for the quarter ended September 30, 1999 when
compared to the quarter ended September 30, 1998. The increase was primarily
due to the effects of post sale operations at Carrollton and Park Plaza. The
increase was also due to improved operating results at Indian Ridge.

The following comparative discussion includes only the results of Indian Ridge.

Rental revenues increased by $13,700 or 2.8% and $25,300 or 1.7% for the
quarter and nine months ended September 30, 1999 when compared to the quarter
and nine months ended September 30, 1998, respectively. The increases were
primarily due to an increase in tenant expense reimbursements, which was due to
an adjustment in the estimated reimbursement from tenants. Also contributing to
the increase for the nine-month periods under comparison was consideration
received in 1999 for the early termination of a tenant's lease. The increases
were partially offset by decreases in base rental income, which were due to the
slight decline in average occupancy.

Property operating expenses increased by $8,600 and $15,600 for the quarter and
nine months ended September 30, 1999 when compared to the quarter and nine
months ended September 30, 1998. The increases were primarily due to an
increase in legal costs related to the pursuit of various tenant bankruptcies.

Repair and maintenance expense decreased by $23,400 for the quarter ended
September 30, 1999 when compared to the quarter ended September 30, 1998. The
decrease was primarily due to a decrease in landscaping costs and costs related
to the parking lot. An increase in snow removal costs for the nine-month
periods under comparison was almost entirely offset by the decrease in
landscaping and parking lot costs.

To increase and/or maintain the occupancy level at the Partnership's remaining
property, the General Partner, through its 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
property brochures; 2) early renewal of existing tenants' 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.

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 generally
accepted accounting principles ("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 following table includes a reconciliation of Cash
Flow (as defined in the Partnership Agreement) to cash flow provided by
operating activities as determined by GAAP. Such amounts are not indicative of
actual distributions to Partners and should not be considered as an alternative
to the results disclosed in the Statements of Income and Expenses and
Statements of Cash Flow.

<TABLE>
<CAPTION>
                                                       Comparative Cash Flow
                                                        Results For the Nine
                                                            Months Ended
                                                       -----------------------
                                                        9/30/99      9/30/98
-------------------------------------------------------------------------------
 <S>                                                   <C>         <C>
 Cash Flow (as defined in the Partnership Agreement)   $1,028,200  $ 1,147,100
 Items of reconciliation:
 General Partner's Partnership Management Fee              69,000       54,000
 Decrease in current assets                                63,800       87,500
 Increase in current liabilities                          105,600       32,300
-------------------------------------------------------------------------------
 Net cash provided by operating activities             $1,266,600  $ 1,320,900
-------------------------------------------------------------------------------
 Net cash (used for) provided by investing activities  $ (826,600) $   382,700
-------------------------------------------------------------------------------
 Net cash (used for) financing activities              $ (979,100) $(9,099,000)
-------------------------------------------------------------------------------
</TABLE>

The decrease in Cash Flow (as defined in the Partnership Agreement) of $118,900
for the nine months ended September 30, 1999 when compared to nine months ended
September 30, 1998 was primarily due to the decrease in Partnership net income,
exclusive of depreciation and amortization, as previously discussed.

The decrease in the Partnership's cash position for the nine months ended
September 30, 1999 resulted primarily from distributions paid to Limited
Partners and the net increase in investments in debt securities exceeding the
net cash provided by operating activities. Liquid assets (including cash, cash
equivalents and investments in debt securities) of the Partnership as of
September 30, 1999 were comprised of amounts held for working capital purposes.

Net cash provided by operating activities decreased by $54,300 for the nine
months ended September 30, 1999 when compared to the nine months ended
September 30, 1998. The decrease was primarily the result of the decrease in
interest income, as previously discussed.

Net cash provided by (used for) investing activities changed from $382,700 for
the nine months ended September 30, 1998 to $(826,600) for the nine months
ended September 30, 1999. The change was primarily due to a net increase in
investments in debt securities during the nine months ended September 30, 1999
as compared to the net maturity during the comparable period in 1998.
Investments in debt securities is a result of the extension of the maturities
of certain of the Partnership's short-term investments in an effort to maximize
the return on these amounts as they are held for working capital purposes.
These investments are of investment-grade and mature less than one year from
their date of purchase.

The Partnership has no financial instruments for which there are significant
risks. Based on the timing and maturities of the Partnership's investments in
debt securities, the Partnership believes that it does not have material market
risk.

The Partnership maintains working capital reserves to pay for capital.
Approximately $50,000 is projected to be spent at Indian Ridge during the
remainder of 1999. Actual amounts expended may vary depending on a number of
factors including actual leasing activity and other market conditions
throughout the remainder of the year. The General Partner believes these
improvements and leasing costs are necessary in order to increase and/or
maintain the occupancy level in a very competitive market, maximize rental
rates charged to new and renewing tenants and prepare the remaining property
for eventual disposition.

The decrease in net cash used for financing activities of $8,119,900 was
primarily due to the 1998 special distribution of a portion of the Park Plaza
Sale Proceeds. The remaining Park Plaza Sale Proceeds were utilized to repay
the outstanding balance of the loan payable to the General Partner.

The Year 2000 problem is the result of the inability of existing computer
programs to distinguish between a year beginning with "20" rather than "19".
This is the result of computer programs using two rather than four digits to
define an applicable year. If not corrected, any program having time-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in a variety of problems including miscalculations,
loss of data and failure of entire systems. Critical areas that could be
effected are accounts receivable and rent collections, accounts payable,
general ledger, cash management, fixed assets, investor services, computer
hardware, telecommunications systems and health, security, fire and life
systems.

                                                                               5
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS--OVERFLOW FOR PG. 5


The Partnership has engaged Affiliated and unaffiliated entities to perform all
of its critical functions that utilize software that may have time-sensitive
applications. All of these providers are providing these services for their own
organizations as well as for other clients. The General Partner, on behalf of
the Partnership, has been in close communications with each of these service
providers regarding steps that are being taken to assure that there will be no
serious interruption of the operations of the Partnership resulting from Year
2000 problems. Based on the results of the queries, as well as a review of the
disclosures by these service providers, the General Partner believes that the
Partnership will be able to continue normal business operations and will incur
no material costs related to Year 2000 issues.

While the Partnership has not formulated a written contingency plan, it has
selected the Year 2000 compliant systems that it intends to use beginning in
the Year 2000. The General Partner believes that based on the size of the
Partnership's portfolio and its limited number of transactions, aside from
catastrophic failure of banks, governmental agencies, etc., it will be able to
carry out substantially all of its critical operations.

The General Partner continues to take a conservative approach to projections of
future rental income in its determination of adequate levels of cash reserves
due to the anticipated capital and tenant improvements and leasing costs
necessary to be made at Indian Ridge during the coming years. For the nine
months ended September 30, 1999, Cash Flow (as defined in the Partnership
Agreement) retained to supplement working capital reserves amounted to
$138,700.

Distributions to Limited Partners for the quarter ended September 30, 1999 were
declared in the amount of $296,500, or $.50 per Unit. Cash distributions are
made 60 days after the last day of each fiscal quarter. The amount of future
distributions to Partners will ultimately be dependent upon the performance of
Indian Ridge as well as the 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.

Based upon the current estimated fair value of its assets, net of its
outstanding liabilities, together with its expected operating results and
capital expenditure requirements, the General Partner believes that the
Partnership's cumulative distributions to its Limited Partners from inception
through the termination of the Partnership may be less than such Limited
Partners' Original Capital Contributions.
<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 during the quarter ended
September 30, 1999.


<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. - 4

                             By:     FIRST CAPITAL FINANCIAL CORPORATION
                                     GENERAL PARTNER

Date:  November 10, 1999     By:     /s/     DOUGLAS CROCKER II
       -----------------             -------------------------------------
                                             DOUGLAS CROCKER II
                                     President and Chief Executive Officer

Date:  November 10, 1999     By:     /s/     NORMAN M. FIELD
       -----------------             -------------------------------------
                                             NORMAN M. FIELD
                                     Vice President - Finance and Treasurer