<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                            0-12537
                                     ___________________________________________


              First Capital Income Properties, Ltd. - Series VIII
--------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)

         Florida                                                 59-2192277
--------------------------------                            --------------------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)


Two North Riverside Plaza, 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 July 28, 1982, 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>
                                                  June 30,
                                                    1999      December 31,
                                                 (Unaudited)      1998
-------------------------------------------------------------------------------
<S>                                              <C>          <C>           <C>
ASSETS
Investment in commercial rental properties:
 Land                                            $ 3,985,900  $ 3,985,900
 Buildings and improvements                       20,343,900   20,033,500
-------------------------------------------------------------------------------
                                                  24,329,800   24,019,400
 Accumulated depreciation and amortization        (9,946,900)  (9,609,400)
-------------------------------------------------------------------------------
 Total investment properties, net of accumulated
  depreciation and amortization                   14,382,900   14,410,000
Cash and cash equivalents                            595,000    2,392,000
Investments in debt securities                     4,302,300    3,243,600
Rents receivable, net                                 15,800       95,200
Other assets                                                        1,100
-------------------------------------------------------------------------------
                                                 $19,296,000  $20,141,900
-------------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
 Accounts payable and accrued expenses           $   291,500  $   353,900
 Due to Affiliates                                    44,900       56,600
 Distributions payable                               427,800      427,800
 Security deposits                                    63,400       31,600
 Other liabilities                                     4,200       14,300
-------------------------------------------------------------------------------
                                                     831,800      884,200
-------------------------------------------------------------------------------
Partners' capital:
 General Partners (deficit)                          (53,800)     (30,300)
 Limited Partners (70,000 Units issued and
  outstanding)                                    18,518,000   19,288,000
-------------------------------------------------------------------------------
                                                  18,464,200   19,257,700
-------------------------------------------------------------------------------
                                                 $19,296,000  $20,141,900
-------------------------------------------------------------------------------
</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
                                           Partners    Partners       Total
-------------------------------------------------------------------------------
<S>                                        <C>        <C>          <C>
Partners' (deficit) capital, January 1,
 1998                                      $ (27,000) $25,340,000  $25,313,000
Net income for the year ended December
 31, 1998                                    183,400    1,263,000    1,446,400
Distributions for the year ended December
 31, 1998                                   (186,700)  (7,315,000)  (7,501,700)
-------------------------------------------------------------------------------
Partners' (deficit) capital, December 31,
 1998                                        (30,300)  19,288,000   19,257,700
Net income for the six months ended June
 30, 1999                                     62,100           --       62,100
Distributions for the six months ended
 June 30, 1999                               (85,600)    (770,000)    (855,600)
-------------------------------------------------------------------------------
Partners' (deficit) capital, June 30,
 1999                                      $ (53,800) $18,518,000  $18,464,200
-------------------------------------------------------------------------------
</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                                              $ 473,500  $1,100,500
 Interest                                               56,100      84,400
 Gain on sale property                                              11,800
--------------------------------------------------------------------------
                                                       529,600   1,196,700
--------------------------------------------------------------------------
Expenses:
 Depreciation and amortization                         165,400     187,900
 Property operating:
  Affiliates                                            17,700      75,600
  Nonaffiliates                                        131,900     127,700
 Real estate taxes                                      80,000     123,200
 Insurance--Affiliate                                    6,600         100
 Repairs and maintenance                               106,500     118,100
 General and administrative:
  Affiliates                                             6,700       3,700
  Nonaffiliates                                         33,600      27,400
--------------------------------------------------------------------------
                                                       548,400     663,700
--------------------------------------------------------------------------
Net (loss) income                                    $ (18,800) $  533,000
--------------------------------------------------------------------------
Net income allocated to General Partners             $  19,300  $   50,600
--------------------------------------------------------------------------
Net (loss) income allocated to Limited Partners      $ (38,100) $  482,400
--------------------------------------------------------------------------
Net (loss) income allocated to Limited Partners per
 Unit (70,000 Units outstanding)                     $   (0.54) $     6.89
--------------------------------------------------------------------------
</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                                            $  956,300 $2,298,200
 Interest                                             118,500    157,100
------------------------------------------------------------------------
                                                    1,074,800  2,455,300
------------------------------------------------------------------------
Expenses:
 Depreciation and amortization                        337,500    373,500
 Property operating:
  Affiliates                                           28,700    129,000
  Nonaffiliates                                       227,800    304,500
 Real estate taxes                                    160,000    257,200
 Insurance--Affiliate                                  13,200     12,800
 Repairs and maintenance                              186,200    225,700
 General and administrative:
  Affiliates                                           14,800     11,900
  Nonaffiliates                                        44,500     64,300
 Loss on sale of property                                        338,200
------------------------------------------------------------------------
                                                    1,012,700  1,717,100
------------------------------------------------------------------------
Net income                                         $   62,100 $  738,200
------------------------------------------------------------------------
Net income allocated to General Partners           $   62,100 $   97,700
------------------------------------------------------------------------
Net income allocated to Limited Partners           $        0 $  640,500
------------------------------------------------------------------------
Net income allocated to Limited Partners per Unit
 (70,000 Units outstanding)                        $     0.00 $     9.15
------------------------------------------------------------------------
</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                                            $    62,100  $   738,200
 Adjustments to reconcile net income to net cash
  provided by operating activities:
  Depreciation and amortization                            337,500      373,500
  Loss on sale of property                                              338,200
  Changes in assets and liabilities:
  Decrease in rents receivable                              79,400       35,000
  Decrease in other assets                                   1,100       10,400
  (Decrease) in accounts payable and accrued expenses      (62,400)    (291,300)
  (Decrease) increase in due to Affiliates                 (11,700)      25,500
  (Decrease) in other liabilities                          (10,100)     (30,200)
--------------------------------------------------------------------------------
   Net cash provided by operating activities               395,900    1,199,300
--------------------------------------------------------------------------------
Cash flows from investing activities:
 (Increase) in investments in debt securities           (1,058,700)    (402,200)
 Proceeds from sale of property                                       5,656,300
 Payments for capital and tenant improvements             (310,400)     (70,700)
--------------------------------------------------------------------------------
   Net cash (used for) provided by investing
    activities                                          (1,369,100)   5,183,400
--------------------------------------------------------------------------------
Cash flows from financing activities:
 Distributions paid to Partners                           (855,600)  (1,011,100)
 Increase (decrease) in security deposits                   31,800      (26,700)
--------------------------------------------------------------------------------
   Net cash (used for) financing activities               (823,800)  (1,037,800)
--------------------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents    (1,797,000)   5,344,900
Cash and cash equivalents at the beginning of the
 period                                                  2,392,000    5,353,200
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period     $   595,000  $10,698,100
--------------------------------------------------------------------------------
</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 Certificate and 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 six months ended June 30, 1999 are not necessarily indicative
of the operating results for the year ending December 31, 1999.

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 focus, therefore, is to prepare its
assets for sale and find purchasers for its remaining assets when market
conditions warrant such an action. The Partnership has two tenants who occupy
21% of the Partnership's rental properties. These tenants occupied 11% and 10%
of the Partnership's rentable space, respectively.

Commercial rental properties held for investment are recorded at cost, net of
any provisions for value impairment, and depreciated (exclusive of amounts
allocated to land) on the straight-line method over their estimated useful
lives. Upon classifying a commercial rental property as held for disposition,
no depreciation or amortization of such property is provided for in the
financial statements. Lease acquisition fees are recorded at cost and amortized
over the life of 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 rental properties for impairment when conditions
exist which may indicate that it is probable that the sum of expected cash
flows (undiscounted) from a property is less than its estimated carrying basis.
Upon determination that an impairment has occurred, the carrying basis in the
rental property is reduced to its estimated fair market value. Management was
not aware of any indicator that would result in a significant impairment loss
during the periods reported.

Property sales are recorded when title transfers and sufficient consideration
has been received by the Partnership. Upon disposition, the related costs and
accumulated depreciation and amortization are removed from the respective
accounts. Gains or losses on sales are recognized in accordance with GAAP.

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

Investments in debt securities at June 30, 1999 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 market value. All of
these securities had maturities of less than one year when purchased.

Certain reclassifications have been made to the previously reported 1998
statements in order to provide comparability with the 1999 statements. These
reclassifications had no effect on net income or Partners capital (deficit).

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, subsequent to December 23, 1982,
the Termination of the Offering, the General Partners are entitled to 10% of
Cash Flow (as defined in the Partnership Agreement), as a Partnership
Management Fee. In addition, Net Profits (exclusive of Net Profits from the
sale or disposition of Partnership properties) are allocated: first, to the
General Partners, in an amount equal to the greater of the General Partners'
Partnership Management Fee for such fiscal year, or 1% of such Net Profits; and
second, the balance, if any, to the Limited Partners. Net Profits from the sale
or disposition of a Partnership property are allocated: first, to the General
Partners and the Limited Partners with negative balances in their capital
accounts, pro rata in proportion to such respective negative balances, to the
extent of the total of such negative balances; second, to the General Partners,
in an amount necessary to make the aggregate amount of their capital accounts
equal to the greater of the Sale or Refinancing Proceeds to be distributed to
the General Partners with respect to the sale or disposition of such property
or 1% of such Net Profits; and third, the balance, if any, to the Limited
Partners. Net Losses (exclusive of Net Losses from the sale, disposition or
provision for value impairment of Partnership properties) are allocated 1% to
the General Partners and 99% to the Limited Partners. Net Losses from the sale,
disposition or provision for value impairment of Partnership properties are
allocated: first, to the extent that the balance in the General Partners'
capital accounts exceeds their Capital Investment or the balance in the capital
accounts of the Limited Partners exceeds the

                                                                               4
<PAGE>

amount of their Capital Investment (the "Excess Balances"), to the General
Partners and the Limited Partners pro rata in proportion to such Excess
Balances until such Excess Balances are reduced to zero; second, to the General
Partners and the Limited Partners pro rata in proportion to the balances in
their respective capital accounts until the balances in their capital accounts
shall be reduced to zero; and third, the balance, if any, 99% to the Limited
Partners and 1% to the General Partners. In all events there shall be allocated
to the General Partners not less than 1% of Net Profits and Net Losses from the
sale, disposition or provision for value impairment of a Partnership property.
For the quarter and six months ended June 30, 1999 the General Partners were
paid a Partnership Management Fee of $42,800 and $85,600, respectively. For the
quarter and six months ended June 30, 1999 the General Partners were allocated
Net Profits of $19,300 and $62,100, respectively. For the quarter and six
months ended June 30, 1998 the General Partners were paid a Partnership
Management Fee and allocated Net Profits of $50,500 and $101,100, respectively.
In addition, the General Partners were allocated a (loss) on the sale of
property of $(3,400) for the six months ended June 30, 1998 and a gain on the
sale of property of $100 for the quarter ended June 30, 1998.

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>
Property management and leasing fees          $24,800 $43,100 $ 3,500
Reimbursement of property insurance premiums    6,600  13,200    None
Real estate commission (a)                       None    None  37,700
Legal                                           6,500   8,800    None
Reimbursement of expenses, at cost:
 --Accounting                                   2,700   8,300   2,300
 --Investor communications                      2,500   6,100   1,400
---------------------------------------------------------------------
                                              $43,100 $79,500 $44,900
---------------------------------------------------------------------
</TABLE>

The variance between the amounts listed on this table and the Statement of
Income and Expenses is due to capitalized improvement costs.

(a) As of June 30, 1999, the Partnership owed $37,700 to the Managing General
    Partner for real estate commissions earned in connection with the sale of
    five of the warehouses comprising a portion of the Atlanta Gateway Park
    Industrial Center. These commissions have been accrued but not paid. In
    accordance with the Partnership Agreement, the Partnership will not pay the
    General Partners or any Affiliates a real estate commission from the sale
    of a Partnership property until Limited Partners have received cumulative
    distributions of Sale or Refinancing Proceeds equal to 100% of their
    Original Capital Contribution, plus a cumulative return (including all Cash
    Flow (as defined in the Partnership Agreement) which has been distributed
    to the Limited Partners from the initial date of investment) of 6% simple
    interest per annum on their Capital Investment.

On-site property management for the Partnership's properties is provided by
Affiliate of the Managing General Partner and a third-party management group
for fees equal to 3% of gross rents received from the properties. The Affiliate
and the third-party property management groups are entitled to leasing fees
equal to 3% of gross rents received from the properties, reduced by leasing
fees, if any, paid to other third parties.

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 to 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 sale price. The
Partnership, in addition to being in the operation of properties phase, is in
the disposition of properties 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
operating results are generally expected to decline as real property interests
are sold since the Partnership no longer receives the net income generated from
such properties. During 1998, the Partnership sold Old Mill Place Shopping
Center ("Old Mill").

OPERATIONS
The table below is a recap of certain operating results of each of the
Partnership's 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 Quarters     For the Six Months
                                  Ended                 Ended
                            -------------------  ---------------------
                             6/30/99   6/30/98    6/30/99    6/30/98
-----------------------------------------------------------------------
<S>                         <C>        <C>       <C>        <C>
BROOKWOOD METROPLEX OFFICE BUILDING
Rental revenues             $ 244,700  $611,900  $ 503,700  $1,295,000
-----------------------------------------------------------------------
Property net (loss) income  $(107,700) $178,500  $(168,300) $  426,300
-----------------------------------------------------------------------
Average occupancy                  45%       99%        39%         99%
-----------------------------------------------------------------------
WALKER SPRINGS PLAZA SHOPPING CENTER
Rental revenues             $ 228,700  $253,100  $ 452,500  $  510,200
-----------------------------------------------------------------------
Property net income         $  72,900  $119,500  $ 171,100  $  240,000
-----------------------------------------------------------------------
Average occupancy                  73%       84%        73%         92%
-----------------------------------------------------------------------
OLD MILL PLACE SHOPPING CENTER (B)
Rental revenues                        $235,400             $  493,000
-----------------------------------------------------------------------
Property net income                    $169,800             $  329,300
-----------------------------------------------------------------------
</TABLE>
(a) Excludes certain income and expense items which are either not directly
    related to individual property operating results such as interest income
    and general and administrative expenses or are related to properties
    disposed of by the Partnership prior to the periods under comparison.
(b) This property was sold in June 1998. Property net income excludes a gain on
    sale of $11,800 for the quarter ended June 30, 1998 and a loss on sale of
    $338,200 for the six months ended June 30, 1998.

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

Net income decreased by $676,100 for the six months ended June 30, 1999 when
compared to the six months ended June 30, 1998. The decrease was primarily due
to the diminished operating results at Walker Springs Plaza Shopping Center
("Walker Springs") and Brookwood Metroplex Office Buildings I & II
("Brookwood"). In addition the decrease was due to the absence of 1999
operating results from Old Mill due to its 1998 sale. The decrease was
partially offset by the loss on sale of Old Mill recorded in 1998.

Net income (loss) changed from $533,000 for the quarter ended June 30, 1998 to
$(18,800) for the quarter ended June 30, 1999. The change was primarily due to
diminished operating results at Brookwood and Walker Springs. The decrease was
also due to the 1999 absence of results from Old Mill due to its 1998 sale.

Net income, exclusive of Old Mill, for the quarter and six months ended June
30, 1998 was $351,400 and $747,100. Net (loss) income, exclusive of Old Mill,
for the quarter and six months ended June 30, 1999 was $(18,800) and $62,100.

The following comparative discussion excludes the operating results of Old
Mill.

Rental revenues decreased by $391,600 or 45.3%, and $849,000 or 47.0%, for the
quarter and six months ended June 30, 1999 when compared to the quarter and six
months ended June 30, 1998. The decreases were primarily due to a decrease in
base rents, which was due to a decline in the average occupancy at Brookwood.
On December 31, 1998, a tenant who occupied a significant portion of the
rentable space at Brookwood vacated at the expiration of their lease. The
decreases were also due to a decrease in base rents at Walker Springs due to a
decrease in occupancy. The Partnership has made progress in re-tenanting
Brookwood and expects rental revenues to gradually improve through the last six
months of 1999 and the first six months of 2000.

Repair and maintenance expenses decreased by $6,300 and $28,300 for the quarter
and six months ended June 30, 1999 when compared to the quarter and six months
ended June 30, 1998. The decreases were primarily due to a decrease in cleaning
costs at Brookwood, which was due to the significant decline in occupancy. The
decreases were partially offset by an increase in repairs and preventive
maintenance to the roof at Walker Springs.

Property operating expenses decreased by $29,600 and $114,700 for the quarterly
and six-month periods under comparison, respectively. The decreases were
primarily due to decreases in management fees and utilities at Brookwood, which
was due to the significant decline in occupancy. The decreases were also due to
the vacancy of the property manager position at Brookwood.

All other expenses remained relatively unchanged for the periods under
comparison.

To increase and/or maintain occupancy levels at the Partnership's properties,
the Managing 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
building 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
properties. 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 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 and are not indicative of actual
distributions to Partners and should not necessarily be considered as an
alternative to the results disclosed in the Statements of Income and Expenses
and Statements of Cash Flow.

<TABLE>
<CAPTION>
                                                       Comparative Cash Flow
                                                        Results For the Six
                                                           Months Ended
                                                      ------------------------
                                                        6/30/99      6/30/98
-------------------------------------------------------------------------------
<S>                                                   <C>          <C>
Amount of Cash Flow (as defined in the Partnership
 Agreement)                                           $   399,600  $ 1,449,900
Items of reconciliation:
 Decrease in current assets                                80,500       45,400
 (Decrease) in current liabilities                        (84,200)    (296,000)
-------------------------------------------------------------------------------
Net cash provided by operating activities             $   395,900  $ 1,199,300
-------------------------------------------------------------------------------
Net cash (used for) provided by investing activities  $(1,369,100) $ 5,183,400
-------------------------------------------------------------------------------
Net cash (used for) financing activities              $  (823,800) $(1,037,800)
-------------------------------------------------------------------------------
</TABLE>

                                                                               6
<PAGE>


The decrease in Cash Flow (as defined in the Partnership Agreement) of
$1,050,300 for the six months ended June 30, 1999 when compared to six months
ended June 30, 1998 was primarily due to the decrease in net income, exclusive
of depreciation, amortization and loss on sale of property, as previously
discussed.

The decrease in the Partnership's cash position of $1,797,000 for the six
months ended June 30, 1999 was primarily the result of a net increase in
investments in debt securities. In addition, distributions paid to Partners and
expenditures made for capital and tenant improvements and leasing costs
exceeded net cash provided by operating activities. Liquid assets, including
cash, cash equivalents and investments debt securities, of the Partnership as
of June 30, 1999 are comprised of amounts held for working capital purposes.

Net cash provided by operating activities decreased by $803,400 for the six
months ended June 30, 1999 when compared to the six months ended June 30, 1998.
The decrease was primarily due to diminished operating results, as previously
discussed. The decrease was partially offset by the timing of the payment of
certain expenses at Old Mill and Brookwood.

Net cash provided by (used for) investing activities changed from $5,183,400
for the six months ended June 30, 1998 to $(1,369,100) for the six months ended
June 30, 1999. The change was primarily due to the 1998 receipt of proceeds
from the sale of Old Mill. In addition, the Partnership increased its
investments in debt securities by a greater amount during the six months ended
June 30, 1999, as compared to the comparable period in 1998. Investments in
debt securities are 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 and prior to
distribution to Partners. 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
market risks. Due to the timing of the maturities and liquid nature of the
Partnership's investments in debt securities, the Partnership does not believe
that it has material market risk.

The Partnership maintains working capital reserves to pay for capital
expenditures such as building and tenant improvements and leasing costs. During
the six months ended June 30, 1999, the Partnership spent $310,400 for capital
and tenant improvements and leasing costs. Amounts to be spent for building and
tenant improvements and leasing costs during the remainder of 1999 depend to a
large extent on the retenanting activities at Brookwood and Walker Springs, as
discussed below. The Managing General Partner believes that ongoing
improvements and leasing costs are necessary in order to increase and/or
maintain occupancy levels in very competitive markets, maximize rental rates
charged to new and renewing tenants and to prepare the remaining properties for
eventual disposition.

A tenant occupying approximately 67% of the rentable square footage at
Brookwood did not exercise its option to renew its lease on December 31, 1998
and vacated the property. Re-tenanting Brookwood will require a significant
amount of capital and will take an extended period of time. The Managing
General Partner has been successful in securing some tenants for the property
and is currently pursuing additional tenants for the remaining vacated space.
During this process, the Managing General Partner is evaluating local and
regional market conditions for the potential sale of the property. During 1999,
Cash Flow (as defined in the Partnership Agreement) from Brookwood has been and
is expected to continue to be adversely impacted.

Walker Springs currently has approximately 44,000 or 27% square feet of vacant
space. The Partnership is currently in the process of attempting to locate one
or two suitable tenants to restore the occupancy to 100%. There can be no
assurance that the Partnership will be successful in its efforts. Operating
results at Walker Springs were adversely impacted during 1998 and will continue
to be in 1999 until a new tenant(s) can be secured to occupy the available
space. The securing of a new tenant(s) could result in substantial tenant
improvement costs.

The decrease in net cash used for financing activities of $214,000 for the six
months ended June 30, 1999 as compared to the six months ended June 30, 1998
was primarily due to a decrease in distributions of Cash Flow (as defined in
the Partnership Agreement) to Partners.

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 safety
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 service providers are providing these services for
their own organizations as well as for other clients. The Managing General
Partner, on behalf of the Partnership, has been in close communication 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 these queries, as
well as a review of the disclosures by these service providers, the Managing
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
Managing General Partner believes that based on the size of the Partnership's
real estate 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 Managing 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 the Partnership's properties during the
next several years. For the six months ended June 30, 1999, the Partnership
utilized its current Cash Flow (as defined in the Partnership Agreement) plus
$456,000 of previously established working capital reserves to fund the two
quarterly distributions to Partners during 1999.

Distributions of Cash Flow (as defined in the Partnership Agreement) to Limited
Partners for the quarter ended June 30, 1999 were declared in the amount of
$385,000, or $5.50 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 the Partnership's investments
as well as the Managing General Partner's determination of the amount of cash
necessary to supplement working capital reserves to meet future liquidity
requirements of the Partnership. Accordingly, there can be no assurance as to
the amounts of cash for future distributions to Partners.

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 INCOME PROPERTIES, LTD. - SERIES VIII

                         By: FIRST CAPITAL FINANCIAL CORPORATION
                             MANAGING 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