<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, 1997
                             --------------------------------------------------
 
                                      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                                            Identification No.)
organization)                                                      
 
Two North Riverside Plaza, Suite 1100, 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,
                                                 1997       December 31,
                                              (Unaudited)       1996
-----------------------------------------------------------------------------
<S>                                          <C>            <C>           <C>
ASSETS
 Investment in commercial rental properties:
 Land                                        $  6,086,700   $  6,086,700
 Buildings and improvements                    28,419,700     28,217,200
-----------------------------------------------------------------------------
                                               34,506,400     34,303,900
Accumulated depreciation and amortization     (12,465,500)   (11,934,300)
-----------------------------------------------------------------------------
 Total investment properties, net of
  accumulated depreciation and amortization    22,040,900     22,369,600
Cash and cash equivalents                       1,698,900      4,029,600
Investments in debt securities                  3,599,000      1,076,000
Rents receivable                                   72,200        261,700
Other assets                                          400          9,500
-----------------------------------------------------------------------------
                                             $ 27,411,400   $ 27,746,400
-----------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
 Accounts payable and accrued expenses       $    551,800   $    567,600
 Due to Affiliates                                 63,800        130,200
 Distributions payable                            505,600        505,600
 Security deposits                                 48,400         51,200
 Other liabilities                                  2,600         65,800
-----------------------------------------------------------------------------
                                                1,172,200      1,320,400
-----------------------------------------------------------------------------
Partners' capital:
 General Partners (deficit)                       (17,000)       (17,000)
 Limited Partners (70,000 Units issued and
  outstanding)                                 26,256,200     26,443,000
-----------------------------------------------------------------------------
                                               26,239,200     26,426,000
-----------------------------------------------------------------------------
                                             $ 27,411,400   $ 27,746,400
-----------------------------------------------------------------------------
</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the nine months ended September 30, 1997 (Unaudited) and the year ended
December 31, 1996
(All dollars rounded to nearest 00s)
 
<TABLE>
<CAPTION>
                                            General     Limited
                                           Partners    Partners       Total
-------------------------------------------------------------------------------
<S>                                        <C>        <C>          <C>
Partners' capital, January 1, 1996         $      --  $32,339,000  $32,339,000
Net income for the year ended December
 31, 1996                                    251,300      509,000      760,300
Distributions for the year ended December
 31, 1996                                   (268,300)  (6,405,000)  (6,673,300)
-------------------------------------------------------------------------------
Partners' (deficit) capital, December 31,
 1996                                        (17,000)  26,443,000   26,426,000
Net income for the nine months ended
 September 30, 1997                          151,700    1,178,200    1,329,900
Distributions for the nine months ended
 September 30, 1997                         (151,700)  (1,365,000)  (1,516,700)
-------------------------------------------------------------------------------
Partners' (deficit) capital, September
 30, 1997                                  $ (17,000) $26,256,200  $26,239,200
-------------------------------------------------------------------------------
</TABLE>
    The accompanying notes are an integral part of the financial statements.
2
<PAGE>
 
STATEMENTS OF INCOME AND EXPENSES
For the quarters ended September 30, 1997 and 1996
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
 
<TABLE>
<CAPTION>
                                                      1997       1996
------------------------------------------------------------------------
<S>                                                <C>        <C>
Income:
 Rental                                            $1,091,500 $1,115,200
 Interest on short-term investments                    75,000    130,500
------------------------------------------------------------------------
                                                    1,166,500  1,245,700
------------------------------------------------------------------------
Expenses:
 Depreciation and amortization                        177,300    181,100
 Property operating:
  Affiliates                                           37,300    111,700
  Nonaffiliates                                       188,600    158,900
 Real estate taxes                                    134,900    139,800
 Insurance--Affiliate                                  11,200     12,100
 Repairs and maintenance                              129,600    130,200
 General and administrative:
  Affiliates                                           13,000      9,900
  Nonaffiliates                                        19,300     20,400
------------------------------------------------------------------------
                                                      711,200    764,100
------------------------------------------------------------------------
Net income                                         $  455,300 $  481,600
------------------------------------------------------------------------
Net income allocated to General Partners           $   50,600 $   50,600
------------------------------------------------------------------------
Net income allocated to Limited Partners           $  404,700 $  431,000
------------------------------------------------------------------------
Net income allocated to Limited Partners per Unit
 (70,000 Units outstanding)                        $     5.78 $     6.16
------------------------------------------------------------------------
</TABLE>
 
STATEMENTS OF INCOME AND EXPENSES
For the nine months ended September 30, 1997 and 1996
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
 
<TABLE>
<CAPTION>
                                                      1997       1996
------------------------------------------------------------------------
<S>                                                <C>        <C>
Income:
 Rental                                            $3,283,300 $3,723,300
 Interest on short-term investments                   209,900    373,300
------------------------------------------------------------------------
                                                    3,493,200  4,096,600
------------------------------------------------------------------------
Expenses:
 Depreciation and amortization                        531,200    536,200
 Property operating:
  Affiliates                                          123,200    271,300
  Nonaffiliates                                       566,400    461,500
 Real estate taxes                                    404,900    417,300
 Insurance--Affiliate                                  33,600     36,500
 Repairs and maintenance                              374,000    352,400
 General and administrative:
  Affiliates                                           26,400     32,200
  Nonaffiliates                                       103,600    105,700
------------------------------------------------------------------------
                                                    2,163,300  2,213,100
------------------------------------------------------------------------
Net income                                         $1,329,900 $1,883,500
------------------------------------------------------------------------
Net income allocated to General Partners           $  151,700 $  217,800
------------------------------------------------------------------------
Net income allocated to Limited Partners           $1,178,200 $1,665,700
------------------------------------------------------------------------
Net income allocated to Limited Partners per Unit
 (70,000 Units outstanding)                        $    16.83 $    23.80
------------------------------------------------------------------------
</TABLE>
STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 1997 and 1996
(Unaudited)
(All dollars rounded to nearest 00s)
 
<TABLE>
<CAPTION>
                                                          1997        1996
------------------------------------------------------------------------------
<S>                                                    <C>         <C>
Cash flows from operating activities:
 Net income                                            $1,329,900  $1,883,500
 Adjustments to reconcile net income to net cash
  provided by operating activities:
  Depreciation and amortization                           531,200     536,200
  Changes in assets and liabilities:
  Decrease in rents receivable                            189,500      92,100
  Decrease (increase) in other assets                       9,100     (12,000)
  (Decrease) in accounts payable and accrued expenses     (15,800)    (35,300)
  (Decrease) increase in due to Affiliates                (66,400)     56,900
  (Decrease) in other liabilities                         (63,200)    (24,700)
------------------------------------------------------------------------------
   Net cash provided by operating activities            1,914,300   2,496,700
------------------------------------------------------------------------------
Cash flows from investing activities:
 (Increase) in investments in debt securities          (2,523,000) (6,795,600)
 Payments for capital and tenant improvements            (202,500)   (207,200)
------------------------------------------------------------------------------
   Net cash (used for) investing activities            (2,725,500) (7,002,800)
------------------------------------------------------------------------------
Cash flows from financing activities:
 Distributions paid to Partners                        (1,516,700) (2,508,300)
 (Decrease) in security deposits                           (2,800)    (12,000)
------------------------------------------------------------------------------
   Net cash (used for) financing activities            (1,519,500) (2,520,300)
------------------------------------------------------------------------------
Net (decrease) in cash and cash equivalents            (2,330,700) (7,026,400)
Cash and cash equivalents at the beginning of the
 period                                                 4,029,600   9,248,100
------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period     $1,698,900  $2,221,700
------------------------------------------------------------------------------
</TABLE>
    The accompanying notes are an integral part of the financial statements.
                                                                               3
<PAGE>
 
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
September 30, 1997
 
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"). Under this method of accounting,
revenues are recorded when earned and expenses are recorded when incurred.
 
Preparation of the Partnership's financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
 
The financial information included in these financial statements is unaudited;
however, in management's opinion, all adjustments (consisting of only normal,
recurring accruals) necessary for a fair presentation of the results of
operations for the periods included have been made. Results of operations for
the quarter and nine months ended September 30, 1997 are not necessarily
indicative of the operating results for the year ending December 31, 1997.
 
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 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.
 
Cash equivalents are considered all highly liquid investments with maturity of
three months or less when purchased.
 
Investments in debt securities at September 30, 1997 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 1996
statements in order to provide comparability with the 1997 statements. These
reclassifications have no effect on net income or Partners' (deficit) capital.
 
Reference is made to the Partnership's annual report for the year ended
December 31, 1996 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 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 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 nine months ended September 30, 1997, the General Partners were
entitled to distributable Cash Flow (as defined in the Partnership Agreement),
and accordingly allocated Net Profits, of $50,600 and $151,700, respectively.
 
4
<PAGE>
 
Fees and reimbursements paid and payable by the Partnership to Affiliates
during the quarter and nine months ended September 30, 1997 were as follows:
 
<TABLE>
<CAPTION>
                                                         Paid
                                                  -------------------
                                                  Quarter Nine Months Payable
-----------------------------------------------------------------------------
<S>                                               <C>     <C>         <C>
Property management and leasing fees              $45,900  $176,300   $21,700
Reimbursement of property insurance premiums, at
 cost                                              17,700    33.600      None
Real estate commission (a)                           None      None    37,700
Legal                                               3,600    19,900       400
Reimbursement of expenses, at cost:
 --Accounting                                       5,500    16,200     3,100
 --Investor communications                          3,800     6,600       900
-----------------------------------------------------------------------------
                                                  $76,500  $252,600   $63,800
-----------------------------------------------------------------------------
</TABLE>
(a) As of September 30, 1997, the Partnership owed $37,700 to the Managing
    General Partner for real estate commissions earned in connection with the
    sale of a property. 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.
 
Revco D. S., Inc. ("Revco"), a drug store company, which was 19% owned by Zell
Chilmark Fund, L.P ("Chilmark"), an Affiliate of the Managing General Partner,
is obligated to the Partnership under a lease for store space at Walker Springs
Plaza Shopping Center. During the quarter ended June 30, 1997 Chilmark reduced
their interest in Revco to less than 10% and completely liquidated their
interest in July 1997. The per square foot rent required of Revco at the
inception of its lease was comparable to that paid by other tenants at this
property.
 
On-site property management for the Partnership's office property is provided
by an Affiliate of the Managing General Partner for fees ranging from 3% to 6%
of gross rents received from the property. As of December 31, 1996, the
Affiliate providing property management and certain leasing services to the
Partnership's shopping centers sold its management contracts to an unrelated
party. This unaffiliated company receives fees ranging from 3% to 6% of gross
rents received from the properties.
 
3. ASSET HELD FOR DISPOSITION:
 
The Partnership is currently marketing Old Mill Place Shopping Center ("Old
Mill") for sale. The carrying basis, net of accumulated depreciation and
amortization, of Old Mill on the Partnership's Balance Sheet as of September
30, 1997 was $6,959,500, which does not exceed the estimated fair value, less
costs to sell. Net income for Old Mill, included in the Partnership's
Statements of Income and Expenses for the quarter and nine months ended
September 30, 1997 was $155,100 and $468,500, respectively.
 
                                                                               5
<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, 1996 for a discussion of the Partnership's business.
 
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,
1997 and 1996. 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
                     9/30/97  9/30/96   9/30/97    9/30/96
------------------------------------------------------------
<S>                  <C>      <C>      <C>        <C>
BROOKWOOD METROPLEX OFFICE BUILDINGS
Rental revenues      $557,000 $593,900 $1,622,300 $1,785,900
------------------------------------------------------------
Property net income  $131,300 $118,900 $  362,200 $  504,700
------------------------------------------------------------
Average occupancy         94%     100%        97%       100%
------------------------------------------------------------
OLD MILL PLACE SHOPPING CENTER
Rental revenues      $263,200 $243,500 $  806,600 $1,104,100
------------------------------------------------------------
Property net income  $155,100 $122,300 $  468,500 $  716,600
------------------------------------------------------------
Average occupancy         82%      85%        82%        86%
------------------------------------------------------------
WALKER SPRINGS PLAZA SHOPPING CENTER
Rental revenues      $271,400 $277,800 $  854,500 $  834,400
------------------------------------------------------------
Property net income  $126,300 $140,500 $  419,400 $  427,900
------------------------------------------------------------
Average occupancy        100%     100%       100%       100%
------------------------------------------------------------
</TABLE>
(a) Excludes certain income and expense items which are either not directly
    related to individual property operating results such as interest income on
    investments and general and administrative expenses or are related to
    properties previously disposed of by the Partnership.
 
Unless otherwise disclosed, discussions of fluctuations between 1997 and 1996
refer to both the quarters and nine months ended September 30, 1997 and 1996.
 
Net income decreased by $553,600 for the nine months ended September 30, 1997
when compared to the nine months ended September 30, 1996. The decrease was
primarily due to the 1996 receipt of $319,600 as consideration for the early
termination of two tenant's leases at Old Mill Shopping Center ("Old Mill").
Also contributing to the decrease was a decrease in interest earned on the
Partnership's short-term investments, resulting from a reduced amount of cash
available for investment, and diminished operating results at Brookwood
Metroplex Office Buildings I & II ("Brookwood"). Partially offsetting the
decrease was improved operating results at Old Mill, exclusive of lease
termination payments, and decreased general and administrative expenses due to
reduced personnel costs.
 
Net income decreased by $26,300 for the quarter ended September 30, 1997 when
compared to the quarter ended September 30, 1996. The decrease was primarily
due to the decrease in interest earned on the Partnership's short-term
investments. The decrease was partially offset by an increase in operating
results at Old Mill.
 
Rental revenues decreased by $440,000 or 11.8% for the nine months ended
September 30, 1997 when compared to the nine months ended September 30, 1996.
The primary factor which caused the decrease in rental revenues was the 1996
receipt of payments as consideration for the early termination of two tenants'
leases at Old Mill in order to vacate the premises prior to the expiration of
their respective leases. Also contributing to the decrease was a decrease in
tenant expense reimbursements at Brookwood. The decrease was related to the
estimate of the 1996 reconciliation of tenant expense reimbursements. It was
estimated that Brookwood had underbilled its tenants by $81,200 during 1996,
which was to be payable by the tenants upon reconciliation in 1997. After
finalizing the reconciliation it was determined the tenants had in fact been
overbilled by $9,100.
 
Rental revenues decreased by $23,700 or 2.1% for the quarter ended September
30, 1997 when compared to the quarter ended September 30, 1996. The decrease
was primarily due to a decrease in tenant expense reimbursements at Old Mill
and Brookwood. Partially offsetting the decrease was an increase in base rental
income at Old Mill.
 
Repair and maintenance expenses increased by $21,600 for the nine-month periods
under comparison. The increase was primarily the result of an increase in
cleaning costs at Brookwood, which was due in part to an increase in wages.
Repair and maintenance expenses remained relatively unchanged for the quarterly
periods under comparison.
 
Real estate expense decreased by $4,900 and $12,400 for the quarter and nine
months ended September 30, 1997 when compared to the quarter and nine months
ended September 30, 1996, respectively. The decreases were primarily the result
of an anticipated reduction in 1997 taxes at Old Mill.
 
Property operating expenses decreased by $44,700 and $43,200 for the quarter
and nine months ended September 30, 1997 when compared to the quarter and nine
months ended September 30, 1996. The decreases were primarily the result of a
decrease in management fees at Brookwood, which was due to the decrease in
rental income and an increase in leasing commissions paid to outside brokers
which are capitalized and amortized over the life of their respective leases.
 
To increase and/or maintain occupancy levels at the Partnership's properties,
the Managing General Partner, through its Affiliated and unaffiliated 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 cumulative
cash distributions exceed net income, such excess distributions will be treated
as a return of capital. Cash Flow (as defined in the Partnership Agreement) is
generally not equal to net income or cash flows as determined by generally
accepted accounting principles ("GAAP"), since certain items are treated
differently under the Partnership Agreement than under GAAP. Management
believes that to facilitate a clear understanding of the Partnership's
 
                                                                               6
<PAGE>
 
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
 
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 Nine
                                                          Months Ended
                                                       9/30/97      9/30/96
------------------------------------------------------------------------------
<S>                                                  <C>          <C>
Cash Flow (as defined in the Partnership Agreement)  $ 1,861,100  $ 2,419,700
Items of reconciliation:
Decrease in current assets                               198,600       80,100
(Decrease) in current liabilities                       (145,400)      (3,100)
------------------------------------------------------------------------------
Net cash provided by operating activities            $ 1,914,300  $ 2,496,700
------------------------------------------------------------------------------
Net cash (used for) investing activities             $(2,725,500) $(7,002,800)
------------------------------------------------------------------------------
Net cash (used for) financing activities             $(1,519,500) $(2,520,300)
------------------------------------------------------------------------------
</TABLE>
 
The decrease in Cash Flow (as defined in the Partnership Agreement) of $558,600
for the nine months ended September 30, 1997 when compared to nine months ended
September 30, 1996 was primarily due to decreased net income, exclusive of
depreciation and amortization expense, as previously discussed.
 
The decrease in the Partnership's cash position of $2,330,700 for the nine
months ended September 30, 1997 was primarily the result of additional
investments in debt securities, distributions paid to Partners and expenditures
made for capital and tenant improvements and leasing costs exceeding net cash
provided by operating activities. The liquid assets, including cash, cash
equivalents and investments debt securities, of the Partnership as of September
30, 1997 are comprised of amounts held for working capital purposes.
 
Net cash provided by operating activities decreased by $582,400 for the nine
months ended September 30, 1997 when compared to the nine months ended
September 30, 1996. This decrease was primarily due to the decrease in net
income, exclusive of depreciation and amortization, as previously discussed,
along with the timing of the payment of certain expenses at Brookwood.
 
Net cash used for investing activities decreased by $4,277,300 for the nine
months ended September 30, 1997 when compared to the nine months ended
September 30, 1996. The decrease was primarily due to the Partnership making
larger investments in debt securities during the nine months ended September
30, 1996 when compared to the nine months ended September 30, 1997. The
investments in debt securities is a result of the continued extension of the
maturities of certain of the Partnership's short-term investments in an effort
to maximize the return on these amounts as they are held for working capital
purposes. These investments are of investment grade and generally mature less
than one year from their date of purchase.
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, 1997, the Partnership spent $202,500 for
capital and tenant improvements and leasing costs and has projected to spend
approximately $450,000 during the remainder of 1997. Included in the projected
amount are capital and tenant improvements and leasing costs of approximately
$400,000 at Brookwood. 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.
 
The decrease in net cash used for financing activities of $1,000,800 for the
nine months ended September 30, 1997 as compared to the nine months ended
September 30, 1996 was primarily the result of a reduction in the amount of
distributions to Partners. Following the special distribution of Sales Proceeds
in November 1996, the Partnership adjusted the amount of distributions to an
amount that was consistent with the amount of Cash Flow (as defined in the
Partnership Agreement) generated by the Partnership's remaining properties less
amounts deemed necessary to be retained to supplement working capital reserves.
 
The Partnership has recently been notified that the tenant occupying
approximately 63% of the rentable square footage of Brookwood does not intend
to exercise its option ("Option") to renew its lease expiring in December 1998.
Market rental rates currently being quoted by competing properties are greater
than the Option rate. Retenanting Brookwood will require a significant amount
of capital and will likely take an extended period of time. The Managing
General Partner is currently evaluating various options with respect to this
property. These include, but are not limited to: 1) immediately marketing the
property for sale; 2) begin securing new tenants for the property to replace
the old tenant upon its lease expiration and then marketing the property for
sale or 3) begin to secure new tenants for the property, while marketing the
property for sale to a buyer that would be in position to complete the
retenanting process.
 
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. As a result of this, cash continues to be retained to
supplement working capital reserves. For the nine months ended September 30,
1997, Cash Flow (as defined in the Partnership Agreement) retained to
supplement working capital reserves amounted to $344,400.
 
Distributions of Cash Flow (as defined in the Partnership Agreement) to Limited
Partners for the quarter ended September 30, 1997 were declared in the amount
of $455,000, or $6.50 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 
          September 30, 1997.
<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, 1997                By: /s/       DOUGLAS CROCKER II
      -----------------                    -------------------------------------
                                                     DOUGLAS CROCKER II
                                           President and Chief Executive Officer


Date: November 14, 1997                By: /s/        NORMAN M. FIELD
      -----------------                    -------------------------------------
                                                      NORMAN M. FIELD
                                            Vice President-Finance and Treasurer