<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, 1995
                         -------------------------------------------------------

                                      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 950, 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>
 
BALANCE SHEETS
(All dollars rounded to nearest 00s)
 
<TABLE>
<CAPTION>
                                             September 30,
                                                 1995       December 31,
                                              (Unaudited)       1994
-----------------------------------------------------------------------------
<S>                                          <C>            <C>           <C>
ASSETS
Investment in commercial rental properties:
 Land                                        $  6,486,700   $  7,260,400
 Buildings and improvements                    30,917,000     36,197,000
-----------------------------------------------------------------------------
                                               37,403,700     43,457,400
Accumulated depreciation and amortization     (10,965,200)   (11,909,800)
-----------------------------------------------------------------------------
 Total investment properties, net of
  accumulated depreciation and amortization    26,438,500     31,547,600
Investment in mortgage loan receivable                         1,064,000
-----------------------------------------------------------------------------
                                               26,438,500     32,611,600
Cash and cash equivalents                       9,642,300      8,356,100
Rents receivable                                  211,600        259,700
Other assets (net of accumulated
 amortization on loan acquisition costs of
 $163,300 and $104,500, respectively)              17,500        115,700
-----------------------------------------------------------------------------
                                             $ 36,309,900   $ 41,343,100
-----------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
 Accounts payable and accrued expenses       $    524,900   $    237,900
 Due to Affiliates                                134,200        115,200
 Security deposits                                 66,100        110,800
 Distributions payable                            836,100        777,800
 Other liabilities                                  5,000          4,900
-----------------------------------------------------------------------------
                                                1,566,300      1,246,600
-----------------------------------------------------------------------------
Partners' capital:
 General Partners                                 186,600        178,000
 Limited Partners (70,000 Units authorized,
  issued and outstanding)                      34,557,000     39,918,500
-----------------------------------------------------------------------------
                                               34,743,600     40,096,500
-----------------------------------------------------------------------------
                                             $ 36,309,900   $ 41,343,100
-----------------------------------------------------------------------------
</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the nine months ended September 30, 1995
and the year ended December 31, 1994
(Unaudited)
(All dollars rounded to nearest 00s)
 
<TABLE>
<CAPTION>
                                          General     Limited
                                         Partners     Partners       Total
-------------------------------------------------------------------------------
<S>                                      <C>        <C>           <C>
Partners' (deficit) capital, January 1,
 1994                                    $ (44,600) $ 38,345,100  $ 38,300,500
Net income for the year ended December
 31, 1994                                  533,700    19,423,400    19,957,100
Distributions for the year ended
 December 31, 1994                        (311,100)  (17,850,000)  (18,161,100)
-------------------------------------------------------------------------------
Partners' capital, December 31, 1994       178,000    39,918,500    40,096,500
Net income for the nine months ended
 September 30, 1995                        270,000     2,241,200     2,511,200
Distributions for the nine months ended
 September 30, 1995                       (261,400)   (7,602,700)   (7,864,100)
-------------------------------------------------------------------------------
Partners' capital, September 30, 1995    $ 186,600  $ 34,557,000  $ 34,743,600
-------------------------------------------------------------------------------
</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, 1995 and 1994
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
 
<TABLE>
<CAPTION>
                                                      1995       1994
------------------------------------------------------------------------
<S>                                                <C>        <C>
Income:
 Rental                                            $1,150,500 $1,350,400
 Interest on short-term investments                   184,900    176,200
 Interest on mortgage loan receivable                             29,100
------------------------------------------------------------------------
                                                    1,335,400  1,555,700
------------------------------------------------------------------------
Expenses:
 Interest                                                        170,700
 Depreciation and amortization                        261,100    315,800
 Property operating:
 Affiliates                                            74,900     86,900
 Nonaffiliates                                        199,000    172,500
 Real estate taxes                                    118,600    126,400
 Insurance--Affiliate                                  11,200     19,700
 Repairs and maintenance                              111,000    132,300
 General and administrative:
 Affiliates                                            20,500     15,100
 Nonaffiliates                                         26,900     39,500
 Expenses on sale of property                          17,200     34,900
------------------------------------------------------------------------
                                                      840,400  1,113,800
------------------------------------------------------------------------
Net income                                         $  495,000 $  441,900
------------------------------------------------------------------------
Net income allocated to General Partners           $   83,400 $   77,400
------------------------------------------------------------------------
Net income allocated to Limited Partners           $  411,600 $  364,500
------------------------------------------------------------------------
Net income allocated to Limited Partners per Unit
 (70,000 Units issued and outstanding)             $     5.88 $     5.21
------------------------------------------------------------------------
</TABLE>
 
STATEMENTS OF INCOME AND EXPENSES
For the nine months ended September 30, 1995 and 1994
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
 
<TABLE>
<CAPTION>
                                                          1995       1994
------------------------------------------------------------------------------
<S>                                                    <C>        <C>
Income:
 Rental                                                $3,871,800 $ 4,943,200
 Interest on short-term investments                       496,700     495,600
 Interest on mortgage loan receivable                      16,300      87,400
 Gain on sale of property                                 859,800  18,929,700
------------------------------------------------------------------------------
                                                        5,244,600  24,455,900
------------------------------------------------------------------------------
Expenses:
 Interest                                                             965,300
 Depreciation and amortization                            943,400   1,146,800
 Property operating:
 Affiliates                                               270,300     252,700
 Nonaffiliates                                            529,500     490,600
 Real estate taxes                                        409,500     450,700
 Insurance--Affiliate                                      40,800      59,100
 Repairs and maintenance                                  377,900     397,000
 General and administrative:
 Affiliates                                                39,900      33,900
 Nonaffiliates                                            122,100     121,000
------------------------------------------------------------------------------
                                                        2,733,400   3,917,100
------------------------------------------------------------------------------
Net income before extraordinary (loss) on early
 extinguishment of debt                                 2,511,200  20,538,800
Extraordinary (loss) on early extinguishment of debt                 (914,300)
------------------------------------------------------------------------------
Net income                                             $2,511,200 $19,624,500
------------------------------------------------------------------------------
Net income allocated to General Partners               $  270,000 $   458,100
------------------------------------------------------------------------------
Net income allocated to Limited Partners               $2,241,200 $19,166,400
------------------------------------------------------------------------------
Net income before extraordinary (loss) on early
 extinguishment of debt allocated to Limited Partners
 per Unit (70,000 Units issued and outstanding)        $    32.02 $    286.70
------------------------------------------------------------------------------
Net income allocated to Limited Partners per Unit
 (70,000 Units issued and outstanding)                 $    32.02 $    273.81
------------------------------------------------------------------------------
</TABLE>
STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 1995 and 1994
(Unaudited)
(All dollars rounded to nearest 00s)
 
<TABLE>
<CAPTION>
                                                        1995          1994
-------------------------------------------------------------------------------
<S>                                                  <C>          <C>
Cash flows from operating activities:
 Net income                                          $ 2,511,200  $ 19,624,500
 Adjustments to reconcile net income to net cash
  provided by operating activities:
 Depreciation and amortization                           943,400     1,146,800
 (Gain) on sale of property                             (859,800)  (18,929,700)
 Forgiveness of principal on mortgage loan
  receivable                                              20,000
 Extraordinary loss on early extinguishment of debt                    914,300
 Changes in assets and liabilities:
  Decrease in rents receivable                            48,100        19,400
  Decrease in other assets                                39,400        23,900
  Increase in accounts payable and accrued expenses      287,000       294,200
  Increase in due to Affiliates                           19,000         4,000
  Increase (decrease) in other liabilities                   100      (155,900)
-------------------------------------------------------------------------------
   Net cash provided by operating activities           3,008,400     2,941,500
-------------------------------------------------------------------------------
Cash flows from investing activities:
 Proceeds from sale of property                        5,163,800    43,267,800
 Payments for capital and tenant improvements            (79,500)     (438,600)
 Proceeds from retirement of mortgage loan
  receivable                                           1,044,000
 (Increase) in escrow deposits                                        (119,200)
 Maturity of restricted certificate of deposit                          75,000
-------------------------------------------------------------------------------
   Net cash provided by investing activities           6,128,300    42,785,000
-------------------------------------------------------------------------------
Cash flows from financing activities:
 Principal payments on mortgage loans payable                      (21,611,600)
 Prepayment cost on mortgage loan payable                             (914,300)
 Distributions paid to Partners                       (7,805,800)  (17,601,000)
 (Decrease) increase in security deposits                (44,700)       11,200
-------------------------------------------------------------------------------
   Net cash (used for) financing activities           (7,850,500)  (40,115,700)
-------------------------------------------------------------------------------
Net increase in cash and cash equivalents              1,286,200     5,610,800
Cash and cash equivalents at the beginning of the
 period                                                8,356,100    10,171,300
-------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period   $ 9,642,300  $ 15,782,100
-------------------------------------------------------------------------------
Supplemental information:
 Interest paid during the period                                      $965,300
-------------------------------------------------------------------------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
3
<PAGE>
 
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
September 30, 1995
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. Under this method of accounting, revenues are
recorded when earned and expenses are recorded when incurred.
 
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, 1995 are not necessarily
indicative of the operating results for the year ending December 31, 1995.
 
Certain reclassifications have been made to the previously reported 1994
statements in order to provide comparability with the 1995 statements. These
reclassifications have no effect on net income or Partners' capital.
 
The 1994 financial statements included the Partnership's 50% interest in a
joint venture with an Affiliated partnership. This joint venture was formed for
the purpose of acquiring a 100% interest in certain real property and was
operated under the common control of the Managing General Partner prior to its
sale on April 6, 1994. Accordingly, the Partnership's pro rata share of the
venture's revenues, expenses, assets, liabilities and capital was included in
the financial statements.
 
Property sales or dispositions 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. Any gain or loss on sale or disposition is recognized
in accordance with generally accepted accounting principles.
 
Cash equivalents are considered all highly liquid investments purchased with a
maturity of three months or less.
 
Reference is made to the Partnership's annual report for the year ended
December 31, 1994 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
distributable Cash Flow (as defined by 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: (A) the General
Partners' Partnership Management Fee for such fiscal year; or (B) 1% of such
Net Profits; and second, the balance, if any, to the Unit Holders. Net Profits
from the sale or disposition of a Partnership property are allocated: first, to
the General Partners and the Unit Holders 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: (A) the Sale or Refinancing Proceeds to be
distributed to the General Partners with respect to the sale or disposition of
such property; or (B) 1% of such Net Profits; and third, the balance, if any,
to the Unit Holders. Net Losses (exclusive of Net Losses from the sale or
disposition of Partnership properties) are allocated 1% to the General Partners
and 99% to the Unit Holders. Net Losses from the sale or disposition 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 Unit Holders exceeds the amount of their
Capital Investment (the "Excess Balances"), to the General Partners and the
Unit Holders pro rata in proportion to such Excess Balances until such Excess
Balances are reduced to zero; second, to the General Partners and the Unit
Holders pro rata in proportion to the balances in their respective capital
accounts until the balances in their capital accounts shall be reduced to zero;
third, the balance, if any, 99% to the Unit Holders 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 or disposition of a
Partnership property. For the quarter and nine months ended September 30, 1995,
the General Partners were entitled to a Partnership Management Fee, and
accordingly, Net Profits from operations of $83,600 and $261,400, respectively.
For the quarter and nine months ended September 30, 1995, the General Partners
were allocated a Net (Loss) from the sale of a Partnership property of $(200)
and Net Profits from the sale of a Partnership property of $8,600.
 
Fees and reimbursements paid and payable by the Partnership to Affiliates
during the quarter and nine months ended September 30, 1995 were as follows:
 
<TABLE>
<CAPTION>
                                                          Paid
                                                  --------------------
                                                  Quarter  Nine Months Payable
-------------------------------------------------------------------------------
<S>                                               <C>      <C>         <C>
Property management and leasing fees              $100,600  $254,200   $ 76,200
Reimbursement of property insurance premiums, at
 cost                                               11,200    40,800       None
Real estate commissions (a)                           None      None     37,700
Reimbursement of expenses, at cost:
 (1) Accounting                                      7,000    18,300      8,100
 (2) Investor communication                          1,900     5,800      9,700
 (3) Legal                                          21,700    36,100        900
 (4) Mortgage servicing                               None      None      1,600
-------------------------------------------------------------------------------
                                                  $142,400  $355,200   $134,200
-------------------------------------------------------------------------------
</TABLE>
(a) As of September 30, 1995, the Partnership owed $37,700 to the Managing
    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, no Affiliate of the
    General Partners may receive payment of a real estate commission upon 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 by the Partnership Agreement) which has been
    distributed to the Unit Holders from the initial date of investment) of 6%
    simple interest per annum on their Capital Investment from the initial date
    of investment.
 
Revco D. S., Inc. ("Revco"), a drug store company, of which a 20% ownership
interest was acquired by Zell Chilmark Fund L.P., an Affiliate of the Managing
General Partner, on September 1, 1992, is obligated to the Partnership under a
lease for store space at Walker Springs Plaza Shopping Center. During the
quarter and nine months ended September 30, 1995, Revco paid rent of $10,300
and $39,100, respectively. The rents paid by Revco are comparable to those paid
by other tenants at Walker Springs Plaza Shopping Center.
 
3. INVESTMENT IN MORTGAGE LOAN RECEIVABLE:
 
On April 30, 1986, the Partnership acquired a first mortgage loan with an
aggregate outstanding principal balance of $1,064,000. The loan was purchased
at a discount of $50,700, which amount was amortized over the life of the loan.
The real property mortgaged by this loan was held as collateral under a loan
agreement. In addition, payment of the mortgage loan was guaranteed by the
original holder of the loan if the borrower were to be declared in default by
the Partnership. As of December 31, 1994, the loan balance remained at
$1,064,000, earning interest at a rate of 10%. The maturity date of this
mortgage loan investment, which was September 1, 1993, was extended until
December 31, 1994 and then again to January 31, 1995. All unpaid interest and
an extension fee of 1.5% of the principal balance were received from the
obligor of the loan as consideration for the extension from September 1, 1993
to December 31, 1994. On February 24, 1995, the Partnership received
$1,060,300, including $16,300 in accrued interest from January 1, 1995, in full
satisfaction of this mortgage loan receivable.
 
4. PROPERTY SALE:
 
On June 16, 1995 the Partnership sold its interest in the Tuckerstone Commons /
Rooker Royal I & II Warehouses, located in Atlanta, Georgia, for a sale price
of $5,300,000. The Partnership incurred selling expenses of $136,200, including
$21,500 in legal expenses paid to an Affiliate of the Managing General Partner.
The Partnership received net sale proceeds of $5,163,800. The net gain reported
by the Partnership for financial statement purposes was $859,800. For tax
reporting purposes the Partnership will report a net gain of approximately
$1,940,000 for the year ending December 31, 1995. This sale was an all-cash
sale.
                                                                               4
<PAGE>
 
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, 1994, for a discussion of the Partnership's business.
 
As the Partnership progresses through the disposition phase of its life cycle,
management's discussion and analysis of financial condition and results of
operations is complicated with respect to comparisons between periods. Results
of net income and cash flows as defined by generally accepted accounting
principles ("GAAP") as well as Cash Flow (as defined by the Partnership
Agreement) are generally expected to decline as real property interests are
sold or disposed of since the Partnership no longer realizes the results
generated from such real property interests. Accordingly, rental income, debt
service, depreciation and amortization expense, property operating expenses,
repairs and maintenance expenses, real estate taxes and insurance are expected
to decline, but will continue to comprise the significant components of net
income and cash flows (as defined by GAAP) as well as Cash Flow (as defined by
the Partnership Agreement) until the final property is sold. Also, during the
disposition phase, cash and cash equivalents increase as Sale and Refinancing
Proceeds are received and decrease as the Partnership utilizes these proceeds
for the purposes of distributions to Limited Partners, repayment of mortgage
loans payable, making capital improvements to the Partnership's remaining
properties or other working capital requirements. Prior to being utilized for
such purposes, these proceeds are invested in short-term money market
instruments. Sale and Refinancing Proceeds are excluded from the determination
of Cash Flow (as defined by the Partnership Agreement).
 
OPERATIONS
The table below is a recap of certain operating results of each of the
Partnership's properties for the quarters and nine months ended September 30,
1995 and 1994. 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
                            9/30/95  9/30/94    9/30/95    9/30/94
---------------------------------------------------------------------
<S>                         <C>      <C>       <C>        <C>
BROOKWOOD METROPLEX OFFICE BUILDINGS I & II
Rental revenues             $567,900 $560,100  $1,744,700 $1,651,300
---------------------------------------------------------------------
Property net income (loss)  $107,400 $(56,000) $  353,500 $ (128,800)
---------------------------------------------------------------------
Average occupancy               100%     100%        100%        97%
---------------------------------------------------------------------
OLD MILL PLACE SHOPPING CENTER
Rental revenues             $313,600 $337,200  $  980,800 $  986,200
---------------------------------------------------------------------
Property net income         $124,800 $169,000  $  403,200 $  410,600
---------------------------------------------------------------------
Average occupancy                88%      96%         90%        96%
---------------------------------------------------------------------
WALKER SPRINGS PLAZA SHOPPING CENTER
Rental revenues             $271,800 $270,800  $  782,800 $  823,100
---------------------------------------------------------------------
Property net income         $149,100 $118,800  $  390,600 $  400,200
---------------------------------------------------------------------
Average occupancy               100%     100%        100%        98%
---------------------------------------------------------------------
</TABLE>
 
<TABLE>
<S>                         <C>      <C>      <C>      <C>
TUCKERSTONE COMMONS/ROOKER ROYAL I & II WAREHOUSES (B)
Rental revenues             $(3,100) $180,400 $380,000 $  477,200
-----------------------------------------------------------------
Property net (loss) income  $(6,600) $ 94,900 $171,200 $  179,500
-----------------------------------------------------------------
Average occupancy             (b)         90%   (b)           86%
-----------------------------------------------------------------
EL PASO NATURAL GAS BUILDING (C)
Rental revenues                                        $1,003,400
-----------------------------------------------------------------
Property net income                                    $  324,100
-----------------------------------------------------------------
Average occupancy                                         (c)
-----------------------------------------------------------------
</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) Tuckerstone Commons / Rooker Royal I & II Warehouses ("Rooker") was sold on
    June 16, 1995. The property net income excludes the gain or loss from the
    sale of the property which was included in the Statements of Income and
    Expenses for the quarter and nine months ended September 30, 1995.
(c) El Paso Natural Gas Building ("El Paso") was sold on April 6, 1994. The
    property net income excludes the gain or loss from the sale of the property
    and a mortgage prepayment penalty which were included in the Statements of
    Income and Expenses for the nine months ended September 30, 1994.
 
Net income for the Partnership increased $53,100 for the quarter ended
September 30, 1995 when compared to the quarter ended September 30, 1994 and
decreased $17,113,300 for the nine months ended September 30, 1995 when
compared to the nine months ended September 30, 1994. The increase in net
income for the quarterly periods under comparison was primarily due to the
absence of mortgage interest expense of $170,700 at Brookwood Metroplex Office
Buildings I and II ("Brookwood"), as a result of the payoff, on October 3,
1994, of the mortgage loan collateralizing Brookwood, partially offset by the
effect of the sale of Rooker on June 16, 1995 (property net income of $94,900
for the quarter ended September 30, 1994) and lower income earned of $29,100 on
the mortgage loan receivable as a result of the payoff of the loan on February
24, 1995. The decrease in net income for the nine-month periods under
comparison was primarily due to the sale of El Paso on April 6, 1994, (net gain
on the sale of $18,015,400 after the mortgage prepayment penalty and property
net income of $324,100) and lower income earned of $71,100 on the mortgage loan
receivable. The decrease in the nine-month period was partially offset by the
net gain on the sale of Rooker of $859,800 and the absence of interest expense
of $511,900 on the mortgage loan collateralized by Brookwood. For further
discussion regarding the sale of Partnership properties see notes (b) and (c)
to the comparative operating results table presented above as well as the Notes
to Financial Statements in this report and the Partnership's Annual Report on
Form 10-K for the year ended December 31, 1994. The sales of these properties
 
5
<PAGE>
 
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
accounted for the significant decreases in rental income, interest expense and
depreciation and amortization.
 
Net income before extraordinary loss on early extinguishment of debt, exclusive
of sold properties, mortgage interest expense and interest income on the
mortgage loan receivable decreased $6,000 or 1%, and $49,000 or 3%,
respectively, for the quarterly and nine-month periods under comparison. The
decrease for the quarterly periods under comparison was due to lower operating
results at Old Mill Place Shopping Center ("Old Mill") and Brookwood of $44,200
and $7,300, respectively, partially offset by: 1) increased operating results
at Walker Springs Plaza Shopping Center ("Walker Springs") of $30,300; 2) an
increase in interest income earned on short-term investments of $8,900 due to
an increase in the average interest rate earned on these investments and 3) a
decrease in general and administrative expenses primarily due to lower data
processing costs and legal fees, partially offset by an increase in other
professional service fees. The decrease for the nine-month periods under
comparison was due to lower operating results at Brookwood, Walker Springs and
Old Mill of $29,600, $9,600 and $7,400, respectively, as well as an increase in
general and administrative expenses of $7,400 due to increases in professional
service fees and printing costs, partially offset by lower data processing
costs and legal fees.
 
The following comparative discussion includes only the operating results of the
Partnership's three remaining property investments.
 
Rental revenues decreased $14,800, or 1%, for the quarter ended September 30,
1995 when compared to the quarter ended September 30, 1994 and increased
$47,700 or 1%, for the nine months ended September 30, 1995 when compared to
the nine months ended September 30, 1994. The primary factor which caused the
decrease in rental revenues for the quarterly periods under comparison was the
lower average occupancy rate at Old Mill. The primary factor which impacted
rental revenues for the nine-month periods under comparison was increased
rental revenues at Brookwood due to an increase in tenant expense
reimbursements as a result of reimbursements in 1995 which included prior year
reimbursements that were greater than had been previously estimated and an
increase in the average base rental rates charged to new and renewing tenants.
Partially offsetting the increase in nine-month rental revenues was lower
tenant expense reimbursements at Walker Springs as a result of reimbursements
in 1994 which included prior year reimbursements that were greater than had
been previously estimated as well as a decrease in 1995 expenses which are
reimbursable from tenants.
 
Property operating expenses increased $38,100 and $89,600, respectively, for
the comparable periods. The primary factors which caused the decreases in
property operating expenses were increases in utility costs, property
management and leasing fees and professional service costs at Brookwood and
professional service costs at Old Mill.
 
Depreciation and amortization expense decreased $12,100 for the quarterly
period and increased $45,900 for the nine-month period. The decrease in the
quarterly period is due to the fact that the periodic depreciation and
amortization expense for certain assets whose depreciable and amortizable lives
has expired during 1995 exceeds the periodic depreciation and amortization
expense for depreciable and amortizable assets placed in service during 1995.
Depreciation and amortization expense increased for the nine-month period as a
result of the 1995 write-off of the unamortized acquisition costs on the
mortgage loan collateralized by Brookwood, which was paid off in October 1994.
 
Real estate tax expense decreased $1,800 and $26,900 for the quarter and nine
months ended September 30, 1995, when compared to the quarter and nine months
ended September 30, 1994, respectively. The decreases were primarily due to the
receipt of a partial refund of 1993 real estate taxes as well as to a lower
real estate tax liability in 1995 for Walker Springs as a result of a lower
assessment. Partially offsetting the decrease was an increase in real estate
taxes for Old Mill due to projected increases in the assessed value and tax
rate.
 
Insurance expense decreased $3,500 and $10,400, respectively, during the
quarter and nine months ended September 30, 1995, when compared to the
comparable 1994 periods. These decreases were primarily due to lower group
rates on the Partnership's combined insurance coverage as a result of a minimal
amount of claims made over the past several years, which provided a good loss
experience relative to the Partnership's properties.
 
Repairs and maintenance expense decreased $14,300 and $3,900, respectively, for
the quarter and nine months ended September 30, 1995, when compared to the
comparable 1994 periods. The decreases were primarily due to nonrecurring
expenses incurred in 1994 such as emergency roof repairs and aerial photographs
at Old Mill and driveway and parking lot repair and restriping at Walker
Springs. Partially offsetting the decreases was increased repair and
maintenance expenses at Brookwood during 1995 due to additional landscaping as
well as an increase in the cost of janitorial services.
 
To increase and/or maintain occupancy levels at the Partnership's properties,
the Managing General Partner, through its Affiliated 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 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 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 Partnership net income or cash flows as defined 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
                                                                               6
<PAGE>
 
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Cash Flow (as defined by the Partnership Agreement) should be examined in
conjunction with an analysis of net income or cash flows (as defined by GAAP).
The following table includes a reconciliation of Cash Flow (as defined by 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 neccessarily be considered as an alternative to the
results disclosed in the Statements of Income and Expenses and Statements of
Cash Flows.
 
<TABLE>
<CAPTION>
                                                     Comparative Cash Flow
                                                        Results for the
                                                       Nine Months Ended
                                                      9/30/95      9/30/94
------------------------------------------------------------------------------
<S>                                                 <C>          <C>
Amount of Cash Flow (as defined in the Partnership
 Agreement)                                         $ 2,594,800  $  2,522,800
Items of reconciliation:
 Forgiveness of principal on mortgage loan
  receivable                                             20,000
Principal payments on mortgage loan payable                           233,100
Decrease in current assets                               87,500        43,300
Increase in current liabilities                         306,100       142,300
------------------------------------------------------------------------------
Net cash provided by operating activities           $ 3,008,400  $  2,941,500
------------------------------------------------------------------------------
Net cash provided by investing activities           $ 6,128,300  $ 42,785,000
------------------------------------------------------------------------------
Net cash (used for) financing activities            $(7,850,500) $(40,115,700)
------------------------------------------------------------------------------
</TABLE>
 
The increase in Cash Flow (as defined by the Partnership Agreement) of $72,000
for the nine months ended September 30, 1995 when compared to nine months ended
September 30, 1994 was primarily due to an increase in net income, exclusive of
gains on sale of properties and the effects of depreciation and amortization
expense, which components have been previously discussed, as well as the
absence of principal payments on the mortgage loan collateralized by El Paso.
 
The increase in the Partnership's cash position as of September 30, 1995 when
compared to December 31, 1994 was primarily due to the proceeds received from
the sale of Rooker, the net cash provided by operating activities and the net
cash received on the retirement of the mortgage loan receivable exceeding the
distributions paid to Partners and the payments for capital and tenant
improvements and leasing costs. The liquid assets of the Partnership as of
September 30, 1995, are comprised of undistributed Sale Proceeds and
undistributed cash provided by operating activities retained for working
capital purposes.
 
Net cash provided by operating activities increased $66,900 for the nine months
ended September 30, 1995 when compared to the nine months ended September 30,
1994. This increase was primarily due to an increase in the cash provided by
operating activities of Brookwood and Walker Springs partially offset by the
absence of operating results generated from El Paso and lower cash provided by
operating activities at Old Mill as well as Rooker due to the sale of Rooker in
June 1995.
 
Net cash provided by investing activities decreased $36,656,700 for the nine
months ended September 30, 1995 when compared to the nine months ended
September 30, 1994. This decrease was primarily due to the fact that the net
proceeds received on the sale of El Paso in April 1994 were greater than the
net proceeds received on the retirement of the mortgage loan receivable and the
sale of Rooker in February and June 1995, respectively. Partially offsetting
the decrease in net cash provided by investing activities was the decrease in
payments made for capital and tenant improvements and leasing costs of
$359,100. The Partnership maintains working capital reserves to pay for capital
expenditures such as building and tenant improvements and leasing costs. During
the nine months ended September 30, 1995, the Partnership spent $79,500 for
capital and tenant improvements and leasing costs and has budgeted to spend
$310,000 during the remainder of 1995. Of the remaining budgeted amount
approximately, $200,000, $95,000, and $15,000 relates to anticipated capital
and tenant improvements and leasing costs expected to be incurred at Walker
Springs, Brookwood and Old Mill, respectively. The Managing General Partner
believes these 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.
 
On February 24, 1995, the Partnership received $1,060,300, including $16,300 in
accrued interest from January 1, 1995, in full satisfaction of the mortgage
loan receivable.
 
On June 16, 1995 the Partnership sold its interest in Rooker, located in
Atlanta, Georgia, for a sale price of $5,300,000. The Partnership incurred
selling expenses of $136,200, including $21,500 in legal expenses paid to an
Affiliate of the Managing General Partner. The Partnership received net sale
proceeds of $5,163,800. The Partnership distributed $5,250,000, or $75 per
Unit, as Sale Proceeds to the Limited Partners in August 1995.
 
Net cash used for financing activities changed from $40,115,700 for the nine
months ended September 30, 1994 to $7,850,500 for the nine months ended
September 30, 1995. This change was primarily due to the payoff of the mortgage
loan collateralized by El Paso, including a prepayment penalty, and the
distributions paid to Partners in 1994 exceeding the distributions paid to
Partners in 1995. Partially offsetting the change was a decrease in security
deposits, primarily as a result of the sale of Rooker.
 
The Managing General Partner continues to take a conservative approach to
projections of future rental income and to maintain higher 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. The Managing General Partner believes that Cash Flow (as defined
by the Partnership Agreement) is one of the best and least expensive sources of
cash.
 
Distributions to Limited Partners for the quarter ended September 30, 1995 were
declared in the amount of $10.75 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 of the availability of cash for distribution to
Partners.
7
<PAGE>
            


                          PART II. OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K
-------   --------------------------------
          (a) Exhibits:  Financial Data Schedule

          (b) Reports on Form 8-K:

              There were no reports filed on Form 8-K during the quarter
              ended September 30, 1995.




<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: November 14, 1995   By: /s/    DOUGLAS CROCKER II
                              -------------------------------------
                                     DOUGLAS CROCKER II
                              President and Chief Executive Officer


Date: November 14, 1995   By: /s/      NORMAN M. FIELD
                              --------------------------------------
                                       NORMAN M. FIELD
                              Vice President - Finance and Treasurer