<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                   March 31, 1999
                         -------------------------------------------------------
 
                                      OR
 
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934
 
    For the transition period from                     to
                                   --------------------    ---------------------
 
Commission File Number                            0-12537
                       ---------------------------------------------------------
 
 
              First Capital Income Properties, Ltd. - Series VIII
--------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)
 
            Florida                                               59-2192277
-------------------------------                              -------------------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)
 
Two North Riverside Plaza, Suite 1000, Chicago, Illinois          60606-2607
--------------------------------------------------------     -------------------
       (Address of principal executive offices)                   (Zip Code)
 
                                (312) 207-0020
--------------------------------------------------------------------------------
             (Registrant's telephone number, including area code)
 
                                Not applicable
--------------------------------------------------------------------------------
     (Former name, former address and former fiscal year, if changed since
                                 last report)
 
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes  X    No
                                        ---      ---

Documents incorporated by reference:

The First Amended and Restated Certificate and Agreement of Limited Partnership
filed as Exhibit A to the Partnership's Prospectus dated July 28, 1982, included
in the Partnership's Registration Statement on Form S-11, is incorporated herein
by reference in Part I of this report.
<PAGE>
 
                         PART I. FINANCIAL INFORMATION
 
                          ITEM 1. FINANCIAL STATEMENTS
BALANCE SHEETS
(All dollars rounded to nearest 00s)
 
<TABLE>
<CAPTION>
                                                  March 31,
                                                    1999      December 31,
                                                 (Unaudited)      1998
--------------------------------------------------------------------------
<S>                                              <C>          <C>
ASSETS
Investment in commercial rental properties:
 Land                                            $ 3,985,900  $ 3,985,900
 Buildings and improvements                       20,064,600   20,033,500
--------------------------------------------------------------------------
                                                  24,050,500   24,019,400
Accumulated depreciation and amortization         (9,781,500)  (9,609,400)
--------------------------------------------------------------------------
 Total investment properties, net of accumulated
  depreciation and amortization                   14,269,000   14,410,000
Cash and cash equivalents                          1,971,000    2,392,000
Investments in debt securities                     3,241,100    3,243,600
Rents receivable                                     110,600       95,200
Other assets                                             300        1,100
--------------------------------------------------------------------------
                                                 $19,592,000  $20,141,900
--------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
 Accounts payable and accrued expenses           $   171,200  $   353,900
 Due to Affiliates, net                               46,000       56,600
 Distributions payable                               427,800      427,800
 Security deposits                                    33,200       31,600
 Other liabilities                                     3,000       14,300
--------------------------------------------------------------------------
                                                     681,200      884,200
--------------------------------------------------------------------------
Partners' capital:
 General Partners (deficit)                          (30,300)     (30,300)
 Limited Partners (70,000 Units issued and
  outstanding)                                    18,941,100   19,288,000
--------------------------------------------------------------------------
                                                  18,910,800   19,257,700
--------------------------------------------------------------------------
                                                 $19,592,000  $20,141,900
--------------------------------------------------------------------------
</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the quarter ended March 31, 1999 (Unaudited)
and the year ended December 31, 1998
(All dollars rounded to nearest 00s)
 
<TABLE>
<CAPTION>
                                            General     Limited
                                           Partners    Partners       Total
-------------------------------------------------------------------------------
<S>                                        <C>        <C>          <C>
Partners' (deficit) capital,
 January 1, 1998                           $ (27,000) $25,340,000  $25,313,000
Net income for the year ended December
 31, 1998                                    183,400    1,263,000    1,446,400
Distributions for the year ended December
 31, 1998                                   (186,700)  (7,315,000)  (7,501,700)
-------------------------------------------------------------------------------
Partners' (deficit) capital, December 31,
 1998                                        (30,300)  19,288,000   19,257,700
Net income for the quarter ended March
 31, 1999                                     42,800       38,100       80,900
Distributions for the quarter ended
 March 31, 1999                              (42,800)    (385,000)    (427,800)
-------------------------------------------------------------------------------
Partners' (deficit) capital,
 March 31, 1999                            $ (30,300) $18,941,100  $18,910,800
-------------------------------------------------------------------------------
</TABLE>
    The accompanying notes are an integral part of the financial statements
                                                                               2
<PAGE>
 
STATEMENTS OF INCOME AND EXPENSES
For the quarters ended March 31, 1999 and 1998
(Unaudited)
(All dollars rounded to nearest 00s except per Unit amounts)
 
<TABLE>
<CAPTION>
                                                             1999      1998
------------------------------------------------------------------------------
<S>                                                        <C>      <C>
Income:
 Rental                                                    $482,800 $1,197,700
 Interest                                                    62,400     72,700
------------------------------------------------------------------------------
                                                            545,200  1,270,400
------------------------------------------------------------------------------
Expenses:
 Depreciation and amortization                              172,100    185,600
 Property operating:
  Affiliates                                                 11,000     53,400
  Nonaffiliates                                              95,900    176,800
 Real estate taxes                                           80,000    134,000
 Insurance--Affiliate                                         6,600     12,700
 Repairs and maintenance                                     79,700    107,600
 General and administrative:
  Affiliates                                                  8,100      8,200
  Nonaffiliates                                              10,900     36,900
Provision for value impairment                                         350,000
------------------------------------------------------------------------------
                                                            464,300  1,065,200
------------------------------------------------------------------------------
Net income                                                 $ 80,900 $  205,200
------------------------------------------------------------------------------
Net income allocated to General Partners                   $ 42,800 $   47,100
------------------------------------------------------------------------------
Net income allocated to Limited Partners                   $ 38,100 $  158,100
------------------------------------------------------------------------------
Net income allocated to Limited Partners per Unit (70,000
 Units outstanding)                                        $   0.54 $     2.26
------------------------------------------------------------------------------
</TABLE>
STATEMENTS OF CASH FLOWS
For the quarters ended March 31, 1999 and 1998
(Unaudited)
(All dollars rounded to nearest 00s)
 
<TABLE>
<CAPTION>
                                                          1999        1998
-------------------------------------------------------------------------------
<S>                                                    <C>         <C>
Cash flows from operating activities:
 Net income                                            $   80,900  $   205,200
 Adjustments to reconcile net income to net cash
  provided by operating activities:
  Provision for value impairment                                       350,000
  Depreciation and amortization                           172,100      185,600
  Changes in assets and liabilities:
   (Increase) in rents receivable                         (15,400)     (22,800)
   Decrease in other assets                                   800        3,000
   (Decrease) in accounts payable and accrued expenses   (182,700)    (336,100)
   (Decrease) increase in due to Affiliates               (10,600)      26,700
   (Decrease) in other liabilities                        (11,300)     (30,400)
-------------------------------------------------------------------------------
    Net cash provided by operating activities              33,800      381,200
-------------------------------------------------------------------------------
Cash flows from investing activities:
 Payments for capital and tenant improvements             (31,100)     (18,100)
 Decrease (increase) in investments in debt
  securities, net                                           2,500   (1,200,500)
-------------------------------------------------------------------------------
    Net cash (used for) investing activities              (28,600)  (1,218,600)
-------------------------------------------------------------------------------
Cash flows from financing activities:
 Distributions paid to Partners                          (427,800)    (505,600)
 Increase (decrease) in security deposits                   1,600       (8,000)
-------------------------------------------------------------------------------
    Net cash (used for) financing activities             (426,200)    (513,600)
-------------------------------------------------------------------------------
Net (decrease) in cash and cash equivalents              (421,000)  (1,351,000)
Cash and cash equivalents at the beginning of the
 period                                                 2,392,000    5,353,200
-------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period     $1,971,000  $ 4,002,200
-------------------------------------------------------------------------------
</TABLE>
    The accompanying notes are an integral part of the financial statements
3
<PAGE>
 
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
March 31, 1999
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
 
DEFINITION OF SPECIAL TERMS:
Capitalized terms used in this report have the same meaning as those terms have
in the Partnership's Registration Statement filed with the Securities and
Exchange Commission on Form S-11. Definitions of these terms are contained in
Article III of the First Amended and Restated Certificate and Agreement of
Limited Partnership, which is included in the Registration Statement and
incorporated herein by reference.
 
ACCOUNTING POLICIES:
The financial statements have been prepared in accordance with generally
accepted accounting principles ("GAAP"). The Partnership utilizes the accrual
method of accounting. Under this method, revenues are recorded when earned and
expenses are recorded when incurred. The Partnership recognizes rental income
that is contingent upon tenants' achieving specified targets, only to the
extent that such targets are attained.
 
Preparation of the Partnership's financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
 
The financial information included in these financial statements is unaudited;
however, in management's opinion, all adjustments (consisting of only normal,
recurring accruals) necessary for a fair presentation of the results of
operations for the periods included have been made. Results of operations for
the three months ended March 31, 1999 are not necessarily indicative of the
operating results for the year ending December 31, 1999.
 
The Partnership has one reportable segment as the Partnership is in the
disposition phase of its life cycle, wherein it is seeking to liquidate its
remaining operating assets. Management's focus, therefore, is to prepare its
assets for sale and find purchasers for its remaining assets when market
conditions warrant such an action. The Partnership has two tenants who occupy
21% of the Partnership's rental properties. These tenants occupied 11% and 10%
of the Partnership's rentable space, respectively.
 
Commercial rental properties held for investment are recorded at cost, net of
any provisions for value impairment, and depreciated (exclusive of amounts
allocated to land) on the straight-line method over their estimated useful
lives. Upon classifying a commercial rental property as held for disposition,
no depreciation or amortization of such property is provided for in the
financial statements. Lease acquisition fees are recorded at cost and amortized
over the life of the lease. Repair and maintenance costs are expensed as
incurred; expenditures for improvements are capitalized and depreciated over
the estimated life of such improvements.
 
The Partnership evaluates its rental properties for impairment when conditions
exist which may indicate that it is probable that the sum of expected future
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. Except as
disclosed in Note 3, 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 March 31, 1999 are comprised of corporate
debt securities and are classified as held-to-maturity. These investments are
carried at their amortized cost basis in the financial statements, which
approximated fair value. All of these securities had maturities of less than
one year when purchased.
 
Reference is made to the Partnership's annual report for the year ended
December 31, 1998 for a description of other accounting policies and additional
details of the Partnership's financial condition, results of operations,
changes in Partners' capital and changes in cash balances for the year then
ended. The details provided in the notes thereto have not changed except as a
result of normal transactions in the interim or as otherwise disclosed herein.
 
2.RELATED PARTY TRANSACTIONS:
 
In accordance with the Partnership Agreement, subsequent to December 23, 1982,
the Termination of the Offering, the General Partners are entitled to 10% of
Cash Flow (as defined in the Partnership Agreement), as a Partnership
Management Fee. In addition, Net Profits (exclusive of Net Profits from the
sale or disposition of Partnership properties) are allocated: first, to the
General Partners, in an amount equal to the greater of the General Partners'
Partnership Management Fee for such fiscal year, or 1% of such Net Profits; and
second, the balance, if any, to the Limited Partners. Net Profits from the sale
or disposition of a Partnership property are allocated: first, to the General
Partners and the Limited Partners with negative balances in their capital
accounts, pro rata in proportion to such respective negative balances, to the
extent of the total of such negative balances; second, to the General Partners,
in an amount necessary to make the aggregate amount of their capital accounts
equal to the greater of the Sale or Refinancing Proceeds to be distributed to
the General Partners with respect to the sale or disposition of such property
or 1% of such Net Profits; and third, the balance, if any, to the Limited
Partners. Net Losses (exclusive of Net Losses from the sale, disposition or
provision for value impairment of Partnership properties) are allocated 1% to
the General Partners and 99% to the Limited Partners. Net Losses from the sale,
disposition or provision for value impairment of Partnership properties are
allocated: first, to the extent that the balance in the General Partners'
capital accounts exceeds their Capital Investment or the balance in the capital
accounts of the Limited Partners exceeds the 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
 
4
<PAGE>
 
provision for value impairment of a Partnership property. For the three months
ended March 31, 1999 and 1998, the General Partners' were paid a Partnership
Management Fee and allocated Net Profits of $42,800 and $50,600, respectively.
In addition, for the three months ended March 31, 1998, the General Partners
were allocated a (loss) from a provision for value impairment of $(3,500).
 
Fees and reimbursements paid and payable by the Partnership to Affiliates
during the quarter ended March 31, 1999 were as follows:
 
<TABLE>
<CAPTION>
                                                 Paid   Payable
---------------------------------------------------------------
<S>                                             <C>     <C>
Property and asset management and leasing fees  $18,300 $ 6,200
Reimbursement of property insurance premiums      6,600    None
Real estate commission (a)                         None  37,700
Legal                                             2,300    None
Reimbursement of expenses, at cost:
 --Accounting                                     5,600   1,300
 --Investor communications                        3,600     800
---------------------------------------------------------------
                                                $36,400 $46,000
---------------------------------------------------------------
</TABLE>
 
(a) As of March 31, 1999, the Partnership owed $37,700 to the Managing General
    Partner for real estate commissions earned in connection with the sale of
    five of the warehouses comprising a portion of the Atlanta Gateway Park
    Industrial Center. These commissions have been accrued but not paid. In
    accordance with the Partnership Agreement, the Partnership will not pay
    the General Partners or any Affiliates a real estate commission from the
    sale of a Partnership property until Limited Partners have received
    cumulative distributions of Sale or Refinancing Proceeds equal to 100% of
    their Original Capital Contribution, plus a cumulative return (including
    all Cash Flow (as defined in the Partnership Agreement) which has been
    distributed to the Limited Partners from the initial date of investment)
    of 6% simple interest per annum on their Capital Investment.
 
On-site property management for the Partnership's properties is provided by an
Affiliate of the Managing General Partner and a third-party management group
for fees equal to 3% of gross rents received from the properties. The
Affiliate and the third-party property management group are entitled to
leasing fees equal to 3% of gross rents received from the properties, reduced
by leasing fees, if any, paid to other third parties.
 
3.PROVISION FOR VALUE IMPAIRMENT:
 
During the three months ended March 31, 1998, market conditions indicated that
the Partnership would not realize its carrying basis upon the sale of Old Mill
Shopping Center ("Old Mill"). Accordingly, the Partnership recorded a
provision for value impairment in the amount of $350,000. The sale of Old Mill
was consummated in June 1998.
 
                                                                              5
<PAGE>
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
Reference is made to the Partnership's annual report for the year ended
December 31, 1998 for a discussion of the Partnership's business.
 
Statements contained in this Management's Discussion and Analysis of Financial
Condition and Results of Operations, which are not historical facts, may be
forward-looking statements. Such statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially from those
projected. Readers are cautioned not to place undue reliance on these forward-
looking statements, which speak only as of the date hereof.
 
One of the Partnership's objectives is to dispose of its properties when market
conditions allow for the achievement of the maximum possible sale price. The
Partnership, in addition to being in the operation of properties phase, is in
the disposition of properties phase of its life cycle. During the disposition
phase of the Partnership's life cycle, comparisons of operating results are
complicated due to the timing and effect of property sales. Partnership
operating results are generally expected to decline as real property interests
are sold since the Partnership no longer receives the net income generated from
such properties. During 1998, the Partnership sold Old Mill Place Shopping
Center ("Old Mill").
 
OPERATIONS
 
The table below is a recap of certain operating results of each of the
Partnership's properties for the quarters ended March 31, 1999 and 1998. The
discussion following the table should be read in conjunction with the financial
statements and notes thereto appearing in this report.\
 
<TABLE>
<CAPTION>
                               Comparative
                            Operating Results
                               (a) For the
                             Quarters Ended
                            3/31/99   3/31/98
----------------------------------------------
<S>                         <C>       <C>
BROOKWOOD METROPLEX OFFICE BUILDINGS I & II
Rental revenues             $259,000  $683,100
----------------------------------------------
Property net (loss) income  $(60,600) $247,800
----------------------------------------------
Average occupancy                33%       99%
----------------------------------------------
WALKER SPRINGS PLAZA SHOPPING CENTER
Rental revenues             $223,800  $257,100
----------------------------------------------
Property net income         $ 98,200  $120,500
----------------------------------------------
Average occupancy                75%      100%
----------------------------------------------
OLD MILL PLACE SHOPPING CENTER (B)
----------------------------------------------
Rental revenues                       $257,600
----------------------------------------------
Property net income                   $159,500
----------------------------------------------
</TABLE>
(a) Excludes certain income and expense items, which are not directly related
    to individual property operating results such as interest income and
    general and administrative expenses.
(b) Old Mill Place Shopping Center ("Old Mill") was sold on June 17, 1998.
 
Net income decreased by $124,300 for the three months ended March 31, 1999 when
compared to the three months ended March 31, 1998. The decrease was primarily
the result of diminished operating results at Brookwood Metroplex Office
Buildings I & II ("Brookwood") and Walker Springs Plaza Shopping Center
("Walker Springs"). Also contributing to the decrease was the absence of
results in 1999 due to the 1998 sale of Old Mill. The decrease was partially
offset by a provision for value impairment recorded on Old Mill during 1998.
 
Net income, exclusive of the effects of Old Mill, decreased by $314,800 for the
quarter ended March 31, 1999 when compared to the quarter ended March 31, 1998.
The decrease was primarily due to diminished operating results at Brookwood and
Walker Springs.
 
The following comparative discussion excludes the operating results of Old
Mill.
 
Rental revenues decreased by $457,400 or 48.6% for the three months ended March
31, 1999 when compared to the three months ended March 31, 1998. The decrease
was primarily due a decrease in base rents, which was due to a decline in
occupancy at Brookwood. On December 31, 1998, a tenant who occupied a
significant portion of the rentable space at Brookwood vacated at the
expiration of their lease. The decrease was also due to a decrease in base
rents at Walker Springs due to a decrease in occupancy.
 
Repairs and maintenance expense decreased by $22,100 for the three-month
periods under comparison. The decrease was primarily the result of a decrease
in cleaning expenses at Brookwood, which was due to the significant decline in
occupancy.
 
Property operating expenses decreased by $85,100 for the quarter ended March
31, 1999 when compared to the quarter ended March 31, 1999. The decrease was
primarily due to a decrease in management fees and utilities at Brookwood,
which was due to the significant decrease in occupancy.
 
To increase and/or maintain occupancy levels at the Partnership's properties,
the Managing General Partner, through its asset and property management groups,
continues to take the following actions: 1) implementation of marketing
programs, including hiring of third-party leasing agents or providing on-site
leasing personnel, advertising, direct mail campaigns and development of
building brochures; 2) early renewal of existing tenants' leases and addressing
any expansion needs these tenants may have; 3) promotion of local broker events
and networking with local brokers; 4) networking with national level retailers;
5) cold-calling other businesses and tenants in the market area and 6)
providing rental concessions or competitively pricing rental rates depending on
market conditions.
 
LIQUIDITY AND CAPITAL RESOURCES
One of the Partnership's objectives is to dispose of its properties when market
conditions allow for the achievement of the maximum possible sales price. In
the interim, the Partnership continues to manage and maintain its remaining
properties. Notwithstanding the Partnership's intention relative to property
sales, another primary objective of the Partnership is to provide cash
distributions to Partners from Partnership operations. To the extent cumulative
cash distributions exceed net income during a fiscal year, such excess
distributions will be treated as a return of capital. Cash Flow (as defined in
the Partnership Agreement) is generally not equal to net income or cash flows
as determined by generally accepted accounting principles ("GAAP"), since
certain items are treated differently under the Partnership Agreement than
under GAAP. Management believes that to facilitate a clear understanding of the
Partnership's operations, an analysis of Cash Flow (as defined in the
Partnership Agreement) should be examined in
 
6
<PAGE>
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS--(CONTINUED)
 
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
Flows.
 
<TABLE>
<CAPTION>
                                                     Comparative Cash Flow
                                                        Results For the
                                                        Quarters Ended
                                                      3/31/99     3/31/98
----------------------------------------------------------------------------
<S>                                                  <C>        <C>
Cash Flow (as defined in the Partnership Agreement)  $ 253,000  $   740,800
Items of reconciliation:
 (Increase) in current assets                          (14,600)     (19,800)
 (Decrease) in current liabilities                    (204,600)    (339,800)
----------------------------------------------------------------------------
Net cash provided by operating activities            $  33,800  $   381,200
----------------------------------------------------------------------------
Net cash (used for) investing activities             $ (28,600) $(1,218,600)
----------------------------------------------------------------------------
Net cash (used for) financing activities             $(426,200) $  (513,600)
----------------------------------------------------------------------------
</TABLE>
 
The decrease in Cash Flow (as defined in the Partnership Agreement) of $487,800
for the three months ended March 31, 1999 when compared to three months ended
March 31, 1998 was primarily due to the decrease in net income, exclusive of
depreciation, amortization and provisions for value impairment, as previously
discussed.
 
The decrease in the Partnership's cash position of $421,000 for the three
months ended March 31, 1999 was primarily the result of distributions paid to
Partners and expenditures made for capital and tenant improvements and leasing
costs exceeding net cash provided by operating activities. Liquid assets
(including cash, cash equivalents and investments in debt securities) of the
Partnership as of March 31, 1999 are comprised of amounts held for working
capital purposes.
 
Net cash provided by operating activities decreased by $347,400 for the three
months ended March 31, 1999 when compared to the three months ended March 31,
1998. The decrease was primarily due to diminished operating results, as
previously discussed. The decrease was partially offset by the timing of the
payment of certain expenses at Old Mill and Brookwood.
 
Net cash used for investing activities decreased by $1,190,000 for the three
months ended March 31, 1999 when compared to the three months ended March 31,
1998. The decrease was primarily due to the net maturity of amounts invested in
debt securities. 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 mature less than one year from their date of purchase.
 
The Partnership has no financial instruments for which there are significant
market risks. Due to the timing of the maturities and liquid nature of the
Partnership's investments in debt securities, the Partnership does not believe
that it has material market risk.
 
The Partnership maintains working capital reserves to pay for capital
expenditures such as building and tenant improvements and leasing costs. During
the three months ended March 31, 1999, the Partnership spent $31,100 for
capital and tenant improvements and leasing costs. Amounts to be spent for
building and tenant improvements and leasing costs during 1999 depend to a
large extent on the retenanting issues at Brookwood and Walker Springs, as
discussed below. The Managing General Partner believes that ongoing
improvements and leasing costs are necessary in order to increase and/or
maintain occupancy levels in very competitive markets, maximize rental rates
charged to new and renewing tenants and to prepare the remaining properties for
disposition.
 
A tenant occupying approximately 67% of the rentable square footage at
Brookwood did not exercise its option to renew its lease on December 31, 1998
and vacated the property. Retenanting Brookwood will require a significant
amount of capital and will take an extended period of time. The Managing
General Partner is currently pursuing new tenants for the vacated space. During
this process, the Managing General Partner is evaluating local and regional
market conditions for the potential sale of the property. During 1999, Cash
Flow (as defined in the Partnership Agreement) generated by Brookwood will be
severely reduced.
 
Walker Springs currently has approximately 44,000 square feet of vacant space.
The Partnership is currently in the process of attempting to locate one or two
suitable tenants to bring the occupancy to 100%. There can be no assurance that
the Partnership will be successful in its efforts. Results at Walker Springs
were adversely impacted during 1998 and will continue to be in 1999 until a new
tenant(s) can be secured to occupy the available space. The securing of a new
tenant(s) could result in substantial tenant improvement costs.
 
The decrease in net cash used for financing activities of $87,400 for the
quarter ended March 31, 1999 as compared to the quarter ended March 31, 1998
was primarily due to a decrease in distributions of Cash Flow (as defined by
the Partnership Agreement) to Partners.
 
The Year 2000 problem is the result of the inability of existing computer
programs to distinguish between a year beginning with "20" rather than "19".
This is the result of computer programs using two rather than four digits to
define an applicable year. If not corrected, any program having time-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in a variety of problems including miscalculations,
loss of data and failure of entire systems. Critical areas that could be
effected are accounts receivable and rent collections, accounts payable,
general ledger, cash management, fixed assets, investor services, computer
hardware, telecommunications systems and health, security, fire and safety
systems.
 
The Partnership has engaged Affiliated and unaffiliated entities to perform all
of its critical functions that utilize software that may have time-sensitive
applications. All of these service providers are providing these services for
their own organizations as well as for other clients. The Managing General
Partner, on behalf of the Partnership, has been in close communication with
each of these service providers regarding steps that are being taken to assure
that there will be no serious interruption of the operations of the
 
                                                                               7
<PAGE>
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS--(CONTINUED)
 
Partnership resulting from Year 2000 problems. Based on the results of these
queries, as well as a review of the disclosures by these service providers, the
Managing General Partner believes that the Partnership will be able to continue
normal business operations and will incur no material costs related to Year
2000 issues.
 
The Partnership has not formulated a contingency plan. However, the Managing
General Partner believes that based on the size of the Partnership's portfolio
and its limited number of transactions, aside from catastrophic failure of
banks, governmental agencies, etc., it could carry out substantially all of its
critical operations on a manual basis or easily convert to systems that are
Year 2000 compliant.
 
The Managing General Partner continues to take a conservative approach to
projections of future rental income in its determination of adequate levels of
cash reserves due to the anticipated capital and tenant improvements and
leasing costs necessary to be made at the Partnership's properties during the
next several years. For the three months ended March 31, 1999, the Partnership
utilized its current Cash Flow (as defined in the Partnership Agreement) plus
$174,700 of previously established working capital reserves to fund the
quarterly distribution to Partners.
 
Distributions to Limited Partners for the quarter ended March 31, 1999 were
declared in the amount of $385,000, or $5.50 per Unit. Cash distributions are
made 60 days after the last day of each fiscal quarter. The amount of future
distributions to Partners will ultimately be dependent upon the performance of
the Partnership's investments as well as the Managing General Partner's
determination of the amount of cash necessary to supplement working capital
reserves, including the costs associated with the re-tenanting of Brookwood and
Walker Springs, to meet future liquidity requirements of the Partnership.
Accordingly, there can be no assurance as to the amounts of cash available for
future distributions to Partners.
 
8
<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 
             March 31, 1999.

<PAGE>
 
                                  SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                           FIRST CAPITAL INCOME PROPERTIES, LTD. - SERIES VIII

                           By:  FIRST CAPITAL FINANCIAL CORPORATION
                                MANAGING GENERAL PARTNER

Date: May 13, 1999         By: /s/ DOUGLAS CROCKER II
      ------------            ----------------------------------------------
                                   DOUGLAS CROCKER II
                              President and Chief Executive Officer

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