<PAGE>

================================================================================

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549-1004

                               -----------------

                                   FORM 10-K

                               -----------------

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

    For the fiscal year ended December 31, 2002

                                      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 0-12538

               First Capital Institutional Real Estate, Ltd.--1
            (Exact name of registrant as specified in its charter)

                          Florida                      59-2197264
              (State or other jurisdiction of       (I.R.S. Employer
               incorporation or organization)      Identification No.)
                 Two North Riverside Plaza,            60606-2607
                         Suite 700,                    (Zip Code)
                     Chicago, Illinois
          (Address of principal executive offices)

      Registrant's telephone number, including area code: (312) 207-0020

       Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act: Limited Partnership
                                     Units

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  [_]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.  [X]

Documents incorporated by reference:

The First Amended and Restated Certificate and Agreement of Limited Partnership
filed as Exhibit A to the definitive Prospectus dated October 25, 1982,
included in the Registrant's Registration Statement on Form S-11 (Registration
No. 2-79092), is incorporated herein by reference in Part IV of this report.

Exhibit Index--Page A-1

================================================================================

<PAGE>

PART I

ITEM 1.  BUSINESS

The Registrant, First Capital Institutional Real Estate, Ltd.--1 (the
"Partnership") is a limited partnership organized in 1982 under the Florida
Uniform Limited Partnership Law and the business of the Partnership was to
invest primarily in existing, improved, income-producing commercial real
estate, such as shopping centers, warehouses, office buildings, and, to a
lesser extent, in other types of income-producing commercial real estate.
During the year ended December 31, 1997, the Partnership sold all of its
remaining property investments. The Partnership is monitoring the remediation
of an environmental matter at one of the properties sold during 1997. Upon the
successful remediation of the environmental matter and resolution of any other
post-closing matters, the Partnership will make a liquidating distribution and
dissolve. Capitalized terms used in this report have the same meaning as those
terms have in the Partnership Agreement.

ITEM 2.  PROPERTIES

The Partnership does not currently own any property investments.

ITEM 3.  LEGAL PROCEEDINGS

(a & b) The Partnership was not a party to, nor the subject of, any material
pending legal proceedings, nor were any such proceedings terminated during the
quarter ended December 31, 2002. Ordinary routine legal matters incidental to
the business which were not deemed material were pursued during the quarter
ended December 31, 2002.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

(a,b,c & d)  None.

2

<PAGE>

PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S EQUITY AND RELATED SECURITY HOLDER MATTERS

There has not been, nor is there expected to be, a public market for Units.

As of March 1, 2003, there were 6,848 Holders of Units.

ITEM 6.  SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                    For the Years Ended December 31,
                                                         -------------------------------------------------------
                                                            2002        2001       2000       1999       1998
----------------------------------------------------------------------------------------------------------------
<S>                                                      <C>         <C>        <C>        <C>        <C>
Total revenues                                           $   71,500  $  165,200 $  252,300 $  184,200 $  289,600
Net (loss) income                                        $  (47,600) $   49,800 $  148,000 $  121,800 $   38,900
Net (loss) income allocated to Limited Partners          $  (47,100) $   49,300 $  146,500 $  120,600 $   38,500
Net (loss) income allocated to Limited Partners per Unit
  (60,000 Units outstanding)                             $    (0.79) $     0.82 $     2.44 $     2.01 $     0.64
Total assets                                             $4,093,400  $4,139,700 $4,084,300 $3,955,300 $3,852,800
----------------------------------------------------------------------------------------------------------------
</TABLE>

                                                                             3

<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA (Continued)

The following table includes a reconciliation of Cash (Deficit) Flow (as
defined in the Partnership Agreement) to cash flow (used for) provided by
operating activities as determined by accounting principles generally accepted
in the United States ("GAAP"):

<TABLE>
<CAPTION>
                                                                 For the Years Ended December 31,
                                                     --------------------------------------------------------
                                                       2002      2001      2000         1999         1998
-------------------------------------------------------------------------------------------------------------
<S>                                                  <C>       <C>      <C>         <C>          <C>
Cash (Deficit) Flow (as defined in the Partnership
  Agreement) (a)                                     $(47,600) $49,800  $  148,000  $   121,800  $    38,900
Items of reconciliation:
 Changes in assets and liabilities:
 Decrease (increase) in current assets                  3,100   (7,600)      6,500           --       22,600
 Increase (decrease) in current liabilities             1,300    5,600     (19,000)     (19,300)      (5,000)
-------------------------------------------------------------------------------------------------------------
Net cash (used for) provided by operating activities $(43,200) $47,800  $  135,500  $   102,500  $    56,500
-------------------------------------------------------------------------------------------------------------
Net cash provided by (used for) investing activities $     --  $    --  $3,727,800  $(3,727,800) $        --
-------------------------------------------------------------------------------------------------------------
Net cash (used for) financing activities             $     --  $    --  $       --  $        --  $(8,460,000)
-------------------------------------------------------------------------------------------------------------
</TABLE>
(a)Cash (Deficit) Flow is defined in the Partnership Agreement as Partnership
   revenues earned from operations (excluding tenant deposits and proceeds from
   the sale or disposition of any Partnership properties), minus all expenses
   incurred (including Operating Expenses and any reserves deemed reasonably
   necessary by the Managing General Partner), except depreciation and
   amortization expenses and capital expenditures, lease acquisition
   expenditures and the General Partners' Subordinated Partnership Management
   Fee.

The above selected financial data should be read in conjunction with the
financial statements and the related notes appearing on pages A-1 through A-6
in this report.

4

<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
        FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The ordinary business of the Partnership is expected to pass through three
phases: (i) offering of Units and investment in properties, (ii) operation of
properties and (iii) sale or other disposition of properties.

The following Management's Discussion and Analysis of Financial Condition and
Results of Operation may contain various "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These
statements can be identified by the use of forward-looking terminology such as
"believes", "expects", "prospects", "estimated" "should" "may" or the negative
thereof or other variations thereon or comparable terminology indicating the
Partnership's expectations or beliefs concerning future events. The Partnership
cautions that such statements are qualified by important factors that could
cause actual results to differ materially from those in the forward-looking
statements. These risks and uncertainties should be considered in evaluating
forward-looking statements and undue reliance should not be placed on such
statements.

The Partnership is in the disposition phase of its life cycle and no longer
receives income generated from real property interests.

Operations

Comparison of the year ended December 31, 2002 to the year ended December 31,
2001.

Net income (loss) changed from $49,800 for the year ended December 31, 2001 to
$(47,600) for the year ended December 31, 2002. The change was primarily due to
a decrease in interest earned on the Partnership's short-term investments,
which was due to a decrease in the interest rates earned on those investments.

Comparison of the year ended December 31, 2001 to the year ended December 31,
2000.

Net income decreased by $98,200 for the year ended December 31, 2001 when
compared to the year ended December 31, 2000. The decrease was primarily due to
a decrease in interest earned on the Partnership's short-term investments,
which was due to a decrease in rates earned on those investments.

Liquidity and Capital Resources

The decrease in the Partnership's cash position of $43,200 for the year ended
December 31, 2002 was the result of net cash used for operating activities.
Liquid assets (including cash and cash equivalents) of the Partnership as of
December 31, 2002 were comprised of amounts reserved for the Lakewood Square
Shopping Center ("Lakewood") (sold in 1997), environmental matter (as hereafter
discussed) and Partnership liquidation expenses.

Net cash used for operating activities for the year ended December 31, 2002 was
$43,200, a $91,000 change when compared to the year ended December 31, 2001.
This change was primarily due to the change in net income (loss), as previously
discussed.

The Partnership has no financial instruments for which there are significant
market risks.

As described in Note 3 of the Notes to Financial Statements, the Partnership is
awaiting resolution of an environmental matter at Lakewood. The Managing
General Partner is continuing to monitor the documentation delivered by the
purchaser of Lakewood regarding the purchaser's activities to remedy the
hazardous substances at Lakewood. There can be no assurance as to the actual
timeframe for the remediation or that it will be completed without cost to the
Partnership. As a result of this, it will be necessary for the Partnership to
remain in existence and maintain a reserve for such costs. When the
environmental matter at Lakewood is remediated to the satisfaction of the
Partnership, Limited Partners will receive a final liquidating distribution of
the remaining cash held by the Partnership, less amounts reserved for
administrative expenses and any amounts deemed necessary to resolve, or provide
for, any post closing matters.


                                                                             5

<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The response to this item is submitted as a separate section of this report.
See page A-1 "Index of Financial Statements, Schedules and Exhibits."

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

None.

6

<PAGE>

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

(a) & (e) DIRECTORS

The Partnership has no directors. First Capital Financial L.L.C. ("Managing
General Partner") (formerly known as First Capital Financial Corporation) is
the managing general partner of the Partnership. The directors, as of March 1,
2003, are shown in the table below. Directors serve for one year or until their
successors are elected. The next annual meeting of the Managing General Partner
will be held in June 2003.

<TABLE>
<CAPTION>
                         Name                   Office
                         ----                  --------
                         <S>                   <C>
                         Donald J. Liebentritt Director
</TABLE>

Donald J. Liebentritt, 52, has been President and Chief Executive Officer since
December 2002, a Director since May 2000 and was Vice President from May 2000
until December 2002. Mr. Liebentritt is President of Equity Group Investments,
L.L.C. ("EGI"), Vice President and Assistant Secretary of Great American
Management Investment, Inc. ("Great American") and was Principal and Chairman
of the Board of Rosenberg and Liebentritt P.C. until its dissolution in 1999.

(b) & (e) EXECUTIVE OFFICERS

The Partnership does not have any executive officers. The executive officers of
the Managing General Partner as of March 1, 2003 are shown in the table. All
officers are elected to serve for one year or until their successors are
elected and qualified.

<TABLE>
<CAPTION>
          Name                                 Office
          ----                                 ------
          <S>                   <C>
          Donald J. Liebentritt President and Chief Executive Officer
          Philip Tinkler....... Vice President--Finance and Treasurer
</TABLE>

Donald J. Liebentritt--See Table of Directors above.

Philip Tinkler, 38, has been Vice President of Finance and Treasurer of the
Managing General Partner since April 2001, has been Vice President/ Assistant
Treasurer of Great American since March 2001, and has been Treasurer and Vice
President of Accounting for EGI since May 2000. Mr. Tinkler has been the Chief
Financial Officer of Danielson Holding Company since January 2003.

(d) FAMILY RELATIONSHIPS

There are no family relationships among any of the foregoing directors and
officers.

(f) INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

There are no involvements in certain legal proceedings among any of the
foregoing directors and officers.

ITEM 11.  EXECUTIVE COMPENSATION

(a,b,c,d,g,h,i,j & k)  As stated in Item 10, the Partnership has no officers or
               directors. Neither the Managing General Partner, nor any
               director or officer of the Managing General Partner, received
               any direct remuneration from the Partnership during the year
               ended December 31, 2002. However, the Managing General Partner
               and Affiliates of the Managing General Partner do compensate the
               directors and officers of the Managing General Partner.

For additional information see Item 13 (a) Certain Relationships and Related
Transactions.

(e & f) None.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

Equity Compensation Plan

As stated in item 10, the Partnership has no Officers or Directors. Neither the
Partnership nor the Managing General Partner maintains an Equity Compensation
Plan.

Security Ownership

(a)The following table sets forth, as of March 1, 2003, (unless otherwise
   indicated in a footnote), information concerning the beneficial ownership of
   voting securities of the Partnership by the persons known by the Partnership
   to own beneficially more than 5.0% of the outstanding shares of Partnership
   Units.

<TABLE>
<CAPTION>
                                                          Amount and nature
 Title of Class   Name and address of beneficial owner of beneficial ownership Percent of Class
-----------------------------------------------------------------------------------------------
<S>               <C>                                  <C>                     <C>
Partnership Units     W. Robert Kohorst                       4,190 (1)              7.0%
                      155 North Lake Avenue #1000
                      Pasadena, California 91101
-----------------------------------------------------------------------------------------------
</TABLE>

(1)The amount of Partnership Units beneficially owned by W. Robert Kohorst is
   set forth in the Schedule 13G filed on January 21, 2003 by Mr. Kohorst.
   According to such Schedule 13G, the Partnership Units are held of record by
   Everest Management, LLC ("Everest Management") (1,765 Partnership Units),
   Everest Investors 8, LLC ("Everest 8") (1,217 Partnership Units), Everest
   Investors 4, LLC ("Everest 4") (803 Partnership Units) and Everest
   Properties II, LLC ("Everest

                                                                             7

<PAGE>

   Properties II") (405 Partnership Units). The members of each of Everest 8
   and Everest 4 include Everest Partners, LLC ("Everest Partners") and Everest
   Properties. Pursuant to the Operating Agreement of each of Everest 8 and
   Everest 4, the consent of Everest Properties II is required to vote or
   dispose of the Partnership Units held by each such company. Mr. Kohorst
   possesses shared power to determine whether consent by Everest Partners will
   be given or withheld, and Mr. Kohorst possesses sole power to determine
   whether such consent by Everest Properties will be given or withheld. The
   members of Everest Management include W. Robert Kohorst Self-Directed
   Account in Everest Properties II, LLC Money Purchase Pension Plan Trust
   ("Kohorst Account"). Everest Management's Operating Agreement requires the
   consent of the Kohorst Account to vote or dispose of the units held by
   Everest Management. Mr. Kohorst possesses the sole power to determine
   whether such consent by the Kohorst Account will be given or withheld. Mr.
   Kohorst is a member and the manager of Everest Properties, and he possesses
   the sole power to vote or dispose of the Partnership Units held by Everest
   Properties.

(b)The Partnership has no directors or executive officers. As of March 1, 2003,
   none of the executive officers and directors of the Managing General
   Partner, owned any Units.

(c)None.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

(a)Certain Affiliates of the Managing General Partner were entitled to
   compensation and reimbursements of approximately $16,900 from the
   Partnership for investor communications, accounting and other miscellaneous
   services. Services of Affiliates are on terms, which the Managing General
   Partner believes are fair, reasonable and no less favorable to the
   Partnership than reasonably could be obtained from unaffiliated persons. As
   of December 31, 2002, there were no fees and reimbursements due to
   Affiliates.

   In accordance with the Partnership Agreement, subsequent to March 31, 1983,
   the Termination of the Offering, the General Partners are entitled to 10% of
   Cash Flow (as defined by the Partnership Agreement) as their Subordinated
   Partnership Management Fee, provided that Limited Partners first receive
   specified non-cumulative annual rates of return on their Capital Investment.

   In accordance with the Partnership Agreement, Net Profits (exclusive of
   depreciation and 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' Subordinated Partnership
   Management Fee 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, in an
   amount equal to the aggregate amount of depreciation previously allocated to
   them; second, 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;
   third, to the General Partners, in an amount necessary to make the aggregate
   amount of their capital accounts equal to the greater of the Sale 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 fourth, the
   balance, if any, to the Limited Partners. Net Losses (exclusive of
   depreciation and 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. All depreciation is allocated 10%
   to the General Partners and 90% 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 (collectively, 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 and among them (in the ratio
   which their respective capital account balances bear to the aggregate of all
   capital account balances) until the balance in their capital accounts shall
   be reduced to zero; 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. The General Partners were not entitled to cash distributions for
   the year ended December 31, 2002. For the year ended December 31, 2002, the
   General Partners were allocated Net Losses of $500.

(b)None.

(c)No management person is indebted to the Partnership.

(d)None.

ITEM 14.  CONTROLS AND PROCEDURES

Within the 90 days prior to the date of this Annual Report on Form 10-K, the
Managing General Partner, carried out an evaluation, under supervision and with
the participation of the Managing General Partner's management, including the
Managing General Partner's President and Chief Executive Officer and the
Managing General Partner's Vice President--Finance, of the effectiveness of the
design and operation of the Partnership disclosure controls and procedures
pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the President
and Chief Executive Officer and the Vice President--Finance concluded that the
Partnership disclosure controls and procedures are effective in timely alerting
them to material information relating to the Partnership. There have been no
significant changes to the internal controls of the Partnership or in other
factors that could significantly affect the internal controls subsequent to the
completion of this evaluation.

8

<PAGE>

PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a,c & d) (1,2 & 3) See Index of Financial Statements, Schedule and Exhibits on
page A-1 of Form 10-K.

(b) Reports on Form 8-K:

There were no reports filed on Form 8-K for the quarter ended December 31, 2002.

                                                                             9

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                          FIRST CAPITAL INSTITUTIONAL REAL
                                            ESTATE, LTD.--1

                                          BY:   FIRST CAPITAL FINANCIAL LLC
                                                    MANAGING GENERAL PARTNER

Dated:  March 28, 2003
                                             /s/  DONALD J. LIEBENTRITT
                                          By:
                                             -----------------------------------
                                                  DONALD J. LIEBENTRITT
                                          President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<C>                        <S>            <C>

/s/  DONALD J. LIEBENTRITT March 28, 2003 President, Chief Executive Officer and Director
--------------------------                  of the Managing General Partner
  Donald J. Liebentritt

   /s/  PHILIP TINKLER     March 28, 2003 Vice President--Finance and Treasurer
--------------------------
      Philip Tinkler
</TABLE>

10

<PAGE>

INDEX OF FINANCIAL STATEMENTS, SCHEDULE AND EXHIBITS
FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT

<TABLE>
<CAPTION>
                                                               Pages
         <S>                                                 <C>
         --------------------------------------------------------------
         Report of Independent Auditors                         A-2
         Balance Sheets as of December 31, 2002 and 2001        A-3
         Statements of Partners' Capital for the Years Ended
           December 31, 2002, 2001 and 2000                     A-3
         Statements of Income and Expenses for the Years
           Ended December 31, 2002, 2001 and 2000               A-4
         Statements of Cash Flows for the Years Ended
           December 31, 2002, 2001 and 2000                     A-4
         Notes to Financial Statements                       A-5 to A-6
         --------------------------------------------------------------
</TABLE>

SCHEDULES FILED AS PART OF THIS REPORT

All other schedules have been omitted as inapplicable, or for the reason that
the required information is shown in the financial statements or notes thereto.

EXHIBITS FILED AS PART OF THIS REPORT

EXHIBITS (3 & 4) First Amended and Restated Certificate and Agreement of
Limited Partnership as set forth on pages A-1 through A-29 of the Partnership's
definitive Prospectus dated October 25, 1982; Registration Statement No.
2-79092, filed pursuant to Rule 424 (b), is incorporated herein by reference.
The Partnership Agreement as filed has subsequently been amended to reflect the
admission, withdrawal and substitution of Limited Partners, the reduction of
Limited Partners' Capital Contributions, and the withdrawal of an individual
General Partner.

EXHIBIT (13) Annual Report to Security Holders

The 2002 Annual Report to Limited Partners is being sent under separate cover,
not as a filed document and not via EDGAR, for the information of the
Commission.

EXHIBIT (99.1) Certification of Periodic Financial Report Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350

                                                                            A-1

<PAGE>

REPORT OF INDEPENDENT AUDITORS

Partners
First Capital Institutional Real Estate, Ltd.--1
Chicago, Illinois

We have audited the accompanying balance sheets of First Capital Institutional
Real Estate, Ltd.--1 as of December 31, 2002 and 2001, and the related
statements of income and expenses, partners' capital and cash flows for each of
the three years in the period ended December 31, 2002. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of First Capital Institutional
Real Estate, Ltd.--1 at December 31, 2002 and 2001, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2002, in conformity with accounting principles generally accepted
in the United States.

                                          ERNST & YOUNG LLP

Chicago, Illinois
February 28, 2003

A-2

<PAGE>

BALANCE SHEETS
December 31, 2002 and 2001
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                                2002       2001
             <S>                             <C>        <C>
             -----------------------------------------------------
             ASSETS
             Cash and cash equivalents       $4,088,700 $4,131,900
             Other assets                         4,700      7,800
             -----------------------------------------------------
                                             $4,093,400 $4,139,700
             -----------------------------------------------------
             LIABILITIES AND PARTNERS' CAPITAL
             Liabilities:
              Accounts payable and accrued
                expenses                     $   36,900 $   34,800
              Due to Affiliates                      --      3,500
              Other liabilities                   5,000      2,300
             -----------------------------------------------------
                                                 41,900     40,600
             -----------------------------------------------------
             Partners' capital:
              General Partners                  614,600    615,100
              Limited Partners (60,000 Units
                issued and outstanding)       3,436,900  3,484,000
             -----------------------------------------------------
                                              4,051,500  4,099,100
             -----------------------------------------------------
                                             $4,093,400 $4,139,700
             -----------------------------------------------------
</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the years ended December 31, 2002, 2001 and 2000
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                 General    Limited
                                 Partners   Partners      Total
             -----------------------------------------------------
             <S>                 <C>       <C>         <C>
             Partners' capital,
               January 1, 2000   $613,100  $3,288,200  $3,901,300
             Net income for the
               year ended
               December 31, 2000    1,500     146,500     148,000
             -----------------------------------------------------
             Partners' capital,
               December 31, 2000  614,600   3,434,700   4,049,300
             Net income for the
               year ended
               December 31, 2001      500      49,300      49,800
             -----------------------------------------------------
             Partners' capital,
               December 31, 2001  615,100   3,484,000   4,099,100
             Net (loss) for the
               year ended
               December 31, 2002     (500)    (47,100)    (47,600)
             -----------------------------------------------------
             Partners' capital,
               December 31, 2002 $614,600  $3,436,900  $4,051,500
             -----------------------------------------------------
</TABLE>

   The accompanying notes are an integral part of the financial statements.
                                                                            A-3

<PAGE>

STATEMENTS OF INCOME AND EXPENSES
For the years ended December 31, 2002, 2001 and 2000
(All dollars rounded to nearest 00s except per Unit amounts)
<TABLE>
<CAPTION>
                                                                                      2002      2001     2000
----------------------------------------------------------------------------------- --------  -------- --------
<S>                                                                                 <C>       <C>      <C>
Income:
 Interest                                                                           $ 71,500  $165,200 $252,300
----------------------------------------------------------------------------------- --------  -------- --------
                                                                                      71,500   165,200  252,300
----------------------------------------------------------------------------------- --------  -------- --------
Expenses:
 General and administrative:
   Affiliates                                                                         16,900    19,900    8,200
   Nonaffiliates                                                                     102,200    95,500   96,100
----------------------------------------------------------------------------------- --------  -------- --------
                                                                                     119,100   115,400  104,300
----------------------------------------------------------------------------------- --------  -------- --------
Net (loss) income                                                                   $(47,600) $ 49,800 $148,000
----------------------------------------------------------------------------------- --------  -------- --------
Net (loss) income allocated to General Partners                                     $   (500) $    500 $  1,500
----------------------------------------------------------------------------------- --------  -------- --------
Net (loss) income allocated to Limited Partners                                     $(47,100) $ 49,300 $146,500
----------------------------------------------------------------------------------- --------  -------- --------
Net (loss) income allocated to Limited Partners per Unit (60,000 Units outstanding) $  (0.79) $   0.82 $   2.44
----------------------------------------------------------------------------------- --------  -------- --------
</TABLE>

STATEMENTS OF CASH FLOWS
For the years ended December 31, 2002, 2001 and 2000
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
                                                                                 2002        2001        2000
----------------------------------------------------------------------------- ----------  ----------  ----------
<S>                                                                           <C>         <C>         <C>
Cash flows from operating activities:
 Net (loss) income                                                            $  (47,600) $   49,800  $  148,000
 Adjustments to reconcile net (loss) income to net cash (used by) provided by
   operating activities:
   Changes in assets and liabilities:
     Decrease (increase) in other assets                                           3,100      (7,600)      6,500
     Increase (decrease) in accounts payable and accrued expenses                  2,100       3,400     (17,100)
     (Decrease) increase in due to Affiliates                                     (3,500)      2,300      (1,800)
     Increase (decrease) in other liabilities                                      2,700        (100)       (100)
----------------------------------------------------------------------------- ----------  ----------  ----------
       Net cash (used for) provided by operating activities                      (43,200)     47,800     135,500
----------------------------------------------------------------------------- ----------  ----------  ----------
Cash flows from investing activities:
 Decrease in investments in debt securities                                           --          --   3,727,800
----------------------------------------------------------------------------- ----------  ----------  ----------
       Net cash provided by investing activities                                      --          --   3,727,800
----------------------------------------------------------------------------- ----------  ----------  ----------
       Net cash from financing activities                                             --          --          --
----------------------------------------------------------------------------- ----------  ----------  ----------
Net (decrease) increase in cash and cash equivalents                             (43,200)     47,800   3,863,300
Cash and cash equivalents at the beginning of the year                         4,131,900   4,084,100     220,800
----------------------------------------------------------------------------- ----------  ----------  ----------
Cash and cash equivalents at the end of the year                              $4,088,700  $4,131,900  $4,084,100
----------------------------------------------------------------------------- ----------  ----------  ----------
</TABLE>

   The accompanying notes are an integral part of the financial statements.
A-4

<PAGE>

NOTES TO FINANCIAL STATEMENTS
December 31, 2002

1. Organization and summary of significant accounting policies:

Definition of special terms:
Capitalized terms used in this report have the same meaning as those terms 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.

Organization:
The Partnership was formed on June 6, 1982, by the filing of a Certificate and
Agreement of Limited Partnership with the Department of State of the State of
Florida, and commenced the Offering of Units on November 16, 1982. The
Certificate and Agreement, as amended and restated, authorized the sale to the
public of up to 50,000 Units (with the Managing General Partner's option to
increase to 60,000 Units) and not less than 1,300 Units. On January 3, 1983,
the required minimum subscription level was reached and the Partnership
operations commenced. The Managing General Partner exercised its option to
increase the Offering to 60,000 Units, which amount was sold prior to the
Termination of the Offering in March 1983. The Partnership was formed to invest
primarily in existing, improved, income-producing commercial real estate.

The Partnership has disposed of its real estate properties and upon resolution
of the environmental matter disclosed in Note 3, the Partnership will make a
liquidating distribution and dissolve.

The Partnership Agreement provides that the Partnership will be dissolved on or
before December 31, 2013. The Limited Partners, by a majority vote, may
dissolve the Partnership at any time.

Accounting policies:
The financial statements have been prepared in accordance with accounting
principles generally accepted in the United States ("GAAP"). The Partnership
utilizes the accrual method of accounting. Under this method, revenues are
recorded when earned and expenses are recorded when incurred.

Preparation of the Partnership's financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

The Partnership is not liable for Federal income taxes as the Partners
recognize their proportionate share of the Partnership income or loss on their
individual tax returns; therefore, no provision for Federal income taxes is
made in the financial statements of the Partnership. It is not practicable for
the Partnership to determine the aggregate tax bases of the Limited Partners;
therefore, the disclosure of the difference between the tax bases and the
reported assets and liabilities of the Partnership would not be meaningful.

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

The Partnership's financial statements include financial instruments, including
other assets and trade liabilities. The fair value of all financial
instruments, including cash and cash equivalents, was not materially different
from their carrying value at December 31, 2002 and 2001.

2. Related party transactions:

In accordance with the Partnership Agreement, subsequent to March 31, 1983, the
Termination of the Offering, the General Partners are entitled to 10% of Cash
Flow (as defined by the Partnership Agreement) as their Subordinated
Partnership Management Fee, provided that Limited Partners first receive
specified non-cumulative annual rates of return on their Capital Investment.

In accordance with the Partnership Agreement, Net Profits (exclusive of
depreciation and Net Profits from the sale, disposition, or provision for value
impairment of Partnership properties) are allocated: first, to the General
Partners, in an amount equal to the greater of the General Partners'
Subordinated Partnership Management Fee or 1% of such Net Profits; 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, in an amount equal to the aggregate amount of depreciation previously
allocated to them; second, 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; third, to the General Partners, in an amount necessary to make the
aggregate amount of their capital accounts equal to the greater of the Sale
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 fourth, the
balance, if any, to the Limited Partners. Net Losses (exclusive of depreciation
and 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. All depreciation is allocated 10% to the General Partners and
90% 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 (collectively,
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 and
among them (in the ratio which their respective capital account balances bear
to the aggregate of all capital account balances) until the balance in their
capital accounts shall be reduced to zero; third, the balance, if any, 99% to
the

                                                                            A-5

<PAGE>

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. The General Partners were not entitled to cash
distributions for the years ended December 31, 2002, 2001 and 2000. During the
year ended December 31, 2002, 2001 and 2000 the General Partners were allocated
Net (Losses) Profits of $(500), $500 and $1,500, respectively.

Fees and reimbursements paid and payable by the Partnership to Affiliates for
the years ended December 31, 2002, 2001 and 2000 were as follows:

<TABLE>
<CAPTION>
                                         2002            2001            2000
                                    --------------- --------------- ---------------
                                     Paid   Payable  Paid   Payable  Paid   Payable
-----------------------------------------------------------------------------------
<S>                                 <C>     <C>     <C>     <C>     <C>     <C>
Reimbursement of expenses, at cost:
 --Accounting                       $ 7,000  None   $ 2,000   None  $ 3,400   None
 --Investor communication            13,400  None    15,600  3,500    6,600  1,200
-----------------------------------------------------------------------------------
                                    $20,400  None   $17,600 $3,500  $10,000 $1,200
-----------------------------------------------------------------------------------
</TABLE>

3. Environmental matter:

In 1996, the Managing General Partner became aware of the existence of
hazardous substances in the soil and groundwater under Lakewood Square Shopping
Center ("Lakewood"). In connection with the 1997 sale of Lakewood, the
purchaser assumed the obligation to remedy the hazardous substances in the
manner required by law, which includes, but is not limited to, payment of all
costs in connection with the remediation work. In addition, the purchaser
provided the Partnership with certain indemnification protection in relation to
clean-up costs and related expenses arising from the presence of these
hazardous substances. At the present time, the Managing General Partner is
unaware of any claims or other matters referred to above against the
Partnership. The purchaser has completed the initial stage of the Remediation
Action Plan which was approved by the Los Angeles Regional Water Quality
Control Board. However, there can be no assurance as to the timing of the
completion of the remediation process. The Managing General Partner continues
to monitor the documentation delivered by the purchaser regarding the
purchaser's activities to remedy the hazardous substances at Lakewood.

A-6

<PAGE>

FORM OF SECTION 302 CERTIFICATION

I, Donald J. Liebentritt, President and Chief Executive Officer of First
Capital Financial, L.L.C., the managing general partner of First Capital
Institutional Real Estate, Ltd.--1, certify that:

1. I have reviewed this annual report on Form 10-K of First Capital
   Institutional Real Estate, Ltd.--1;

2. Based on my knowledge, this annual report does not contain any untrue
   statement of a material fact or omit to state a material fact necessary to
   make the statements made, in light of the circumstances under which such
   statements were made, not misleading with respect to the period covered by
   this annual report;

3. Based on my knowledge, the financial statements, and other financial
   information included in this annual report, fairly present in all material
   respects the financial condition, results of operations and cash flows of
   the registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
   establishing and maintaining disclosure controls and procedures (as defined
   in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

    a) designed such disclosure controls and procedures to ensure that material
       information relating to the registrant, including its consolidated
       subsidiaries, is made known to us by others within those entities,
       particularly during the period in which this annual report is being
       prepared;

    b) evaluated the effectiveness of the registrant's disclosure controls and
       procedures as of a date within 90 days prior to the filing date of this
       annual report (the "Evaluation Date"); and

    c) presented in this annual report our conclusions about the effectiveness
       of the disclosure controls and procedures based on our evaluation as of
       the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
   our most recent evaluation, to the registrant's auditors and the audit
   committee of registrant's board of directors (or persons performing the
   equivalent function):

    a) all significant deficiencies in the design or operation of internal
       controls which could adversely affect the registrant's ability to
       record, process, summarize and report financial data and have identified
       for the registrant's auditors any material weaknesses in internal
       controls; and

    b) any fraud, whether or not material, that involves management or other
       employees who have a significant role in the registrant's internal
       controls; and

6. The registrant's other certifying officers and I have indicated in this
   annual report whether there were significant changes in internal controls or
   in other factors that could significantly affect internal controls
   subsequent to the date of our most recent evaluation, including any
   corrective actions with regard to significant deficiencies and material
   weaknesses.

Date:  March 28, 2003


                                                  /s/  Donald J. Liebentritt
                                                  -----------------------------
                                                  Donald J. Liebentritt
                                                  President and Chief Executive
                                                  Officer

<PAGE>

FORM OF SECTION 302 CERTIFICATION

I, Philip Tinkler, Vice President--Finance and Treasurer of First Capital
Financial, L.L.C., the managing general partner of First Capital Institutional
Real Estate, Ltd.--1, certify that:

1. I have reviewed this annual report on Form 10-K of First Capital
   Institutional Real Estate, Ltd.--1;

2. Based on my knowledge, this annual report does not contain any untrue
   statement of a material fact or omit to state a material fact necessary to
   make the statements made, in light of the circumstances under which such
   statements were made, not misleading with respect to the period covered by
   this annual report;

3. Based on my knowledge, the financial statements, and other financial
   information included in this annual report, fairly present in all material
   respects the financial condition, results of operations and cash flows of
   the registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
   establishing and maintaining disclosure controls and procedures (as defined
   in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

    a) designed such disclosure controls and procedures to ensure that material
       information relating to the registrant, including its consolidated
       subsidiaries, is made known to us by others within those entities,
       particularly during the period in which this annual report is being
       prepared;

    b) evaluated the effectiveness of the registrant's disclosure controls and
       procedures as of a date within 90 days prior to the filing date of this
       annual report (the "Evaluation Date"); and

    c) presented in this quarterly report our conclusions about the
       effectiveness of the disclosure controls and procedures based on our
       evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
   our most recent evaluation, to the registrant's auditors and the audit
   committee of registrant's board of directors (or persons performing the
   equivalent function):

    a) all significant deficiencies in the design or operation of internal
       controls which could adversely affect the registrant's ability to
       record, process, summarize and report financial data and have identified
       for the registrant's auditors any material weaknesses in internal
       controls; and

    b) any fraud, whether or not material, that involves management or other
       employees who have a significant role in the registrant's internal
       controls; and

6. The registrant's other certifying officers and I have indicated in this
   annual report whether there were significant changes in internal controls or
   in other factors that could significantly affect internal controls
   subsequent to the date of our most recent evaluation, including any
   corrective actions with regard to significant deficiencies and material
   weaknesses.

Date:  March 28, 2003


                                                  /s/  Philip Tinkler
                                                  -----------------------------
                                                  Philip Tinkler
                                                  Vice President--Finance and
                                                  Treasurer