<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                   June 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 Partership'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>
                                                June 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      (4,392,200)  (4,177,200)
------------------------------------------------------------------------
 Total investment property, net of accumulated
  depreciation and amortization                 13,666,300   13,881,300
Cash and cash equivalents                        2,402,200    1,107,100
Investments in debt securities                   2,350,600    3,499,300
Rents receivable                                    69,800      179,600
Other assets                                        12,700       12,700
------------------------------------------------------------------------
                                               $18,501,600  $18,680,000
------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
 Accounts payable and accrued expenses         $   379,100  $   378,200
 Due to Affiliates                                  42,700       42,700
 Distributions payable                             342,500      389,300
 Security deposits                                  31,100       25,900
 Other liabilities                                  55,600       36,900
------------------------------------------------------------------------
                                                   851,000      873,000
------------------------------------------------------------------------
Partners' capital:
 General Partner                                    40,300       40,300
 Limited Partners (593,025 Units issued and
  outstanding)                                  17,610,300   17,766,700
------------------------------------------------------------------------
                                                17,650,600   17,807,000
------------------------------------------------------------------------
                                               $18,501,600  $18,680,000
------------------------------------------------------------------------
</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the six months ended June 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 six months ended
 June 30, 1999                                46,000      436,600      482,600
Distributions for the six months ended
 June 30, 1999                               (46,000)    (593,000)    (639,000)
-------------------------------------------------------------------------------
Partners' capital, June 30, 1999            $ 40,300  $17,610,300  $17,650,600
-------------------------------------------------------------------------------
</TABLE>
    The accompanying notes are an integral part of the financial statements
                                                                               2
<PAGE>

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

<TABLE>
<CAPTION>
                                                              1999     1998
-----------------------------------------------------------------------------
<S>                                                         <C>      <C>
Income:
 Rental                                                     $509,100 $502,800
 Interest                                                     58,500  137,300
-----------------------------------------------------------------------------
                                                             567,600  640,100
-----------------------------------------------------------------------------
Expenses:
 Interest on loan payable to General Partner                           22,600
 Depreciation and amortization                               107,500  106,500
 Property operating:
  Affiliates                                                   6,800    3,200
  Nonaffiliates                                               58,000   63,400
 Real estate taxes                                            76,000   74,700
 Insurance--Affiliate                                          4,500    2,200
 Repairs and maintenance                                      17,500   30,500
 General and administrative:
  Affiliates                                                   5,000    5,100
  Nonaffiliates                                               43,200    9,500
-----------------------------------------------------------------------------
                                                             318,500  317,700
-----------------------------------------------------------------------------
Net income                                                  $249,100 $322,400
-----------------------------------------------------------------------------
Net income allocated to General Partner                     $ 23,000 $ 18,000
-----------------------------------------------------------------------------
Net income allocated to Limited Partners                    $226,100 $304,400
-----------------------------------------------------------------------------
Net income allocated to Limited Partners per Unit (593,025
 Units outstanding)                                         $   0.38 $   0.51
-----------------------------------------------------------------------------
</TABLE>

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

<TABLE>
<CAPTION>
                                                      1999       1998
------------------------------------------------------------------------
<S>                                                <C>        <C>
Income:
 Rental                                            $1,034,200 $1,031,000
 Interest                                             117,100    312,700
------------------------------------------------------------------------
                                                    1,151,300  1,343,700
------------------------------------------------------------------------
Expenses:
 Interest on loan payable to General Partner                      56,000
 Depreciation and amortization                        215,000    213,600
 Property operating:
  Affiliates                                           11,600      5,000
  Nonaffiliates                                       109,800    132,400
 Real estate taxes                                    152,000    148,400
 Insurance--Affiliate                                   9,000      6,500
 Repairs and maintenance                               80,800     57,300
 General and administrative:
  Affiliates                                           10,300     11,700
  Nonaffiliates                                        80,200     48,000
------------------------------------------------------------------------
                                                      668,700    678,900
------------------------------------------------------------------------
Net income                                         $  482,600 $  664,800
------------------------------------------------------------------------
Net income allocated to General Partner            $   46,000 $   36,000
------------------------------------------------------------------------
Net income allocated to Limited Partners           $  436,600 $  628,800
------------------------------------------------------------------------
Net income allocated to Limited Partners per Unit
 (593,025 Units outstanding)                       $     0.74 $     1.06
------------------------------------------------------------------------
</TABLE>
STATEMENTS OF CASH FLOWS
For the six months ended June 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                                            $  482,600  $   664,800
 Adjustments to reconcile net income to net cash
  provided by operating activities:
  Depreciation and amortization                           215,000      213,600
  Changes in assets and liabilities:
   Decrease in rents receivable                           109,800       83,800
   Decrease in other assets                                             17,100
   Increase (decrease) in accounts payable and accrued
    expenses                                                  900      (39,700)
   (Decrease) in due to Affiliates                                      (2,400)
   Increase (decrease) in other liabilities                18,700      (11,400)
-------------------------------------------------------------------------------
    Net cash provided by operating activities             827,000      925,800
-------------------------------------------------------------------------------
Cash flows from investing activities:
 Decrease (increase) in investments in debt securities  1,148,700     (178,400)
 Payments for capital and tenant improvements                          (15,000)
 Decrease in restricted cash                                            50,000
-------------------------------------------------------------------------------
    Net cash provided by (used for) investing
     activities                                         1,148,700     (143,400)
-------------------------------------------------------------------------------
Cash flows from financing activities:
 Distributions paid to Partners                          (685,800)  (7,229,700)
 Net repayment of loan payable to General Partner                   (1,569,500)
 Increase (decrease) in security deposits                   5,200       (3,500)
-------------------------------------------------------------------------------
    Net cash (used for) financing activities             (680,600)  (8,802,700)
-------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents    1,295,100   (8,020,300)
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     $2,402,200  $ 2,387,600
-------------------------------------------------------------------------------
Supplemental information:
 Interest paid to General Partner                      $           $    56,000
-------------------------------------------------------------------------------
</TABLE>

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

NOTES TO FINANCIAL STATEMENTS
(Unaudited)
June 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.

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 six months ended June 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 its estimated useful life. 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. In addition, 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.

                                                                               4
<PAGE>

NOTES TO FINANCIAL STATEMENTS--CONTINUED
(Unaudited)
2. Related party transactions: (continued)


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 six months
ended June 30, 1999, the General Partner was allocated earnings and accrued a
Partnership Management Fee of $23,000 and $46,000, respectively. For the
quarter and six months ended June 30, 1998, the General Partner was allocated
earnings and accrued a Partnership Management Fee of $18,000 and $36,000,
respectively.

In accordance with the Partnership Agreement, the General Partner made advances
(the "Loan") 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 shall be advanced to the Partnership by the General Partner for
distribution to the Limited Partners shall be the amount of Acquisition Fees
and Partnership Management Fees actually paid to the General Partner or its
Affiliates. Amounts advanced bear 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 as
disclosed above. In May 1998, the Partnership utilized a portion of the
proceeds from the 1997 sale of Park Plaza to repay the outstanding balance of
the Loan.

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

<TABLE>
<CAPTION>
                                                    Paid
                                              ----------------
                                                         Six
                                              Quarter  Months  Payable
----------------------------------------------------------------------
<S>                                           <C>      <C>     <C>
Asset management fees                         $  3,100 $ 5,200    None
Real estate commissions (a)                       None    None $40,200
Reimbursement of property insurance premiums     4,500   9,000    None
Legal                                            3,700   6,500    None
Reimbursement of expenses, at cost:
 --Accounting                                    1,900   5,500   1,500
 --Investor communication                        1,700   4,600   1,000
----------------------------------------------------------------------
                                              $ 14,900 $30,800 $42,700
----------------------------------------------------------------------
</TABLE>
(a) As of June 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.

5
<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. During the year ended December 31, 1997, the Partnership sold its
interest in three of its remaining four properties.

OPERATIONS
The table below is a recap of the Partnership's share of certain operating
results of each of its properties for the quarters and six months ended June
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             For the
                             Quarters Ended     Six Months Ended
                            ----------------- ---------------------
                            6/30/99  6/30/98   6/30/99    6/30/98
--------------------------------------------------------------------
<S>                         <C>      <C>      <C>        <C>
INDIAN RIDGE PLAZA SHOPPING CENTER
Rental revenues             $509,100 $492,800 $1,034,200 $1,022,600
--------------------------------------------------------------------
Property net income         $238,400 $209,200 $  456,000 $  486,400
--------------------------------------------------------------------
Average occupancy                88%      89%        88%        89%
--------------------------------------------------------------------
SOLD PROPERTY (B)
Rental revenues                      $ 10,000            $    8,200
--------------------------------------------------------------------
Property net income (loss)           $  8,700            $  (17,200)
--------------------------------------------------------------------
</TABLE>
(a) Excludes certain income and expense items which are either not directly
    related to individual property operating results such as interest income,
    interest expense and general and administrative expenses.
(b) Sold Property includes results from Park Plaza Professional Office Building
    ("Park Plaza") which was sold during 1997.

Unless otherwise disclosed, discussions of fluctuations between 1999 and 1998
refer to both the quarters and six months ended June 30, 1999 and 1998.

Net income decreased by $73,300 and $182,200 for the quarter and six months
ended June 30, 1999 when compared to the quarter and six months ended June 30,
1998, respectively. The decreases were primarily the result of a reduction 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 in operating results for the six-month
periods under comparison at Indian Ridge Plaza Shopping Center ("Indian Ridge")
were substantially offset by the 1998 loss from Park Plaza's post sale
operations. Improved operating results at Indian Ridge for the quarterly
periods under comparison were offset by increased general and administrative
expenses resulting from increased state taxes.

The following comparative discussion includes the results of Indian Ridge.

Rental revenues increased by $16,300 or 3.3% and $11,600 or 1.1% for the
quarter and six months ended June 30, 1999 when compared to the quarter and six
months ended June 30, 1998, respectively. The increases were primarily due to
an increase in consideration received in 1999 for the 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 $7,000 for the six months ended June
30, 1999 when compared to the six months ended June 30, 1998. The increase was
primarily due to an increase in legal fees.

Repairs and maintenance expense decreased by $18,100 for the quarter ended June
30, 1999 when compared to the quarter ended June 30, 1998. The decrease was
primarily due to a decrease in landscaping and snow removal costs.

Repair and maintenance expense increased by $27,500 for the six months ended
June 30, 1999 when compared to the six months ended June 30, 1998. The increase
was primarily due to an increase in snow removal costs. The increase was
partially offset by a decrease in landscaping costs.

To increase and/or maintain occupancy at Indian Ridge, 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

                                                                               6
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

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 Six Months
                                                              Ended
                                                      -----------------------
                                                       6/30/99      6/30/98
------------------------------------------------------------------------------
<S>                                                   <C>         <C>
Cash Flow (as defined in the Partnership Agreement)   $  651,600  $   842,400
Items of reconciliation:
 General Partner's Partnership Management Fee             46,000       36,000
 Decrease in current assets                              109,800      100,900
 Increase (decrease) in current liabilities               19,600      (53,500)
------------------------------------------------------------------------------
Net cash provided by operating activities             $  827,000  $   925,800
------------------------------------------------------------------------------
Net cash provided by (used for) investing activities  $1,148,700  $  (143,400)
------------------------------------------------------------------------------
Net cash (used for) financing activities              $ (680,600) $(8,802,700)
------------------------------------------------------------------------------
</TABLE>

The decrease in Cash Flow (as defined in the Partnership Agreement) of $190,800
for the six months ended June 30, 1999 when compared to six months ended June
30, 1998 was primarily due to the decrease in Partnership net income, exclusive
of depreciation and amortization, as previously discussed.

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

Net cash provided by operating activities decreased by $98,800 for the six
months ended June 30, 1999 when compared to the six months ended June 30, 1998.
The decrease was primarily the result of the decrease in net income, as
previously discussed. The decrease was partially offset by the timing of the
payment of expenses at Indian Ridge.

Net cash (used for) provided by investing activities changed from $(143,400)
for the six months ended June 30, 1998 to $1,148,700 for the six months ended
June 30, 1999. The change was primarily due to a net increase in investments in
debt securities during the six months ended June 30, 1998 as compared to a net
maturity during the comparable period in 1999. 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 maintains working capital reserves to pay for capital and
tenant improvements. 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 very competitive markets, 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 $8,122,100 was
primarily due to the 1998 special distribution of Park Plaza Sale Proceeds. The
decrease was also due to the 1998 repayment 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.

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 inquiries, 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.

The Partnership has not formulated a written contingency plan. However, 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 could carry out substantially all of its
critical operations on a manual basis or easily convert to systems that are
Year 2000 compliant.

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 six
months ended June 30, 1999, Cash Flow (as defined in the Partnership Agreement)
retained to supplement working capital reserves amounted to $58,600.

Distributions to Limited Partners for the quarter ended June 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 value of its assets, net of its outstanding
liabilities, together with its expected 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.

7
<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
         June 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:  August 13, 1999        By:  /s/  DOUGLAS CROCKER II
       ---------------             --------------------------------------
                                        DOUGLAS CROCKER II
                                   President and Chief Executive Officer


Date:  August 13, 1999        By:  /s/  NORMAN M. FIELD
       ---------------             --------------------------------------
                                        NORMAN M. FIELD
                                   Vice President - Finance and Treasurer