<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, 2001

                                      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. The Partnership sold $60,000,000 in Limited
Partnership Units (the "Units") to the public from November 1982 through March
1983, pursuant to a Registration Statement on Form S-11 filed with the
Securities and Exchange Commission (Registration Statement No. 2-79092).
Capitalized terms used in this report have the same meaning as those terms have
in the Partnership's Registration Statement.

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. From May 1983 to January 1985, the Partnership made six
real property investments, including purchases of 50% interests in three joint
ventures with an Affiliated partnership. Each of these joint ventures was
formed for the purpose of acquiring a 100% interest in certain real property
and were operated under the common control of First Capital Financial LLC (the
"Managing General Partner"). During the year ended December 31, 1997, the
Partnership sold its remaining four real 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.

ITEM 2.  PROPERTIES

During the year ended December 31, 1997, the Partnership sold its remaining
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, 2001. Ordinary routine legal matters incidental to
the business which were not deemed material were pursued during the quarter
ended December 31, 2001.

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, 2002, there were 6,909 Holders of Units.

ITEM 6.  SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                  For the Years Ended December 31,
                                                       -------------------------------------------------------
                                                          2001       2000       1999       1998       1997
--------------------------------------------------------------------------------------------------------------
<S>                                                    <C>        <C>        <C>        <C>        <C>
Total revenues                                         $  165,200 $  252,300 $  184,200 $  289,600 $ 5,994,200
Net income                                             $   49,800 $  148,000 $  121,800 $   38,900 $ 3,850,100
Net income allocated to Limited Partners               $   49,300 $  146,500 $  120,600 $   38,500 $ 2,790,200
Net income allocated to Limited Partners per
  Unit (60,000 Units outstanding)                      $     0.82 $     2.44 $     2.01 $     0.64 $     46.50
Total assets                                           $4,139,700 $4,084,300 $3,955,300 $3,852,800 $12,278,900
Distributions to Limited Partners per Unit
  (60,000 Units outstanding) (a)                             None       None       None       None $    447.93
Return of capital to Limited Partners per Unit (60,000
  Units outstanding) (b)                                     None       None       None       None $    401.43
--------------------------------------------------------------------------------------------------------------
</TABLE>
(a)Distributions per Unit to Limited Partners for the year ended December 31,
   1997 included Sales Proceeds of $430.43.
(b)For purposes of this table, return of capital represents either: 1) the
   amount by which distributions, if any, exceed net income for the respective
   year or 2) total distributions, if any, when the Partnership incurs a net
   loss for the respective year. Pursuant to the Partnership Agreement, Capital
   Investment is only reduced by distributions of Sale Proceeds. Accordingly,
   return of capital as used in this table does not impact Capital Investment.

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 accounting principles generally accepted in the United States
("GAAP"):

<TABLE>
<CAPTION>
                                                                   For the Years Ended December 31,
                                                     -----------------------------------------------------------
                                                      2001       2000        1999         1998          1997
-----------------------------------------------------------------------------------------------------------------
<S>                                                  <C>      <C>         <C>          <C>          <C>
Cash Flow (as defined in the Partnership
  Agreement) (a)                                     $49,800  $  148,000  $   121,800  $    38,900  $  1,614,700
Items of reconciliation:
 Changes in assets and liabilities:
   (Increase) decrease in current assets              (7,600)      6,500                    22,600        44,000
   Increase (decrease) in current liabilities          5,600     (19,000)     (19,300)      (5,000)     (322,500)
-----------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities            $47,800  $  135,500  $   102,500  $    56,500  $  1,336,200
-----------------------------------------------------------------------------------------------------------------
Net cash provided by (used for) investing activities $    --  $3,727,800  $(3,727,800) $        --  $ 25,970,300
-----------------------------------------------------------------------------------------------------------------
Net cash (used for) financing activities             $    --  $       --  $        --  $(8,460,000) $(18,983,000)
-----------------------------------------------------------------------------------------------------------------
</TABLE>
(a)Cash 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.

                                                                             3

<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.

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.

The Partnership commenced the Offering of Units on November 16, 1982 and began
operations on January 3, 1983, after reaching the required minimum subscription
level. In March, 1983, the Offering was terminated upon the sale of 60,000
Units. During the period from 1983 to 1985, the Partnership purchased a total
of six properties, including three 50% joint venture interests.

The Partnership, is in the disposition 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 income
generated from such real property interests. The Partnership has sold all of
its real property investments.

Operations

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.

Comparison of the year ended December 31, 2000 to the year ended December 31,
1999.
Net income increased by $26,200 for the year ended December 31, 2000 when
compared to the year ended December 31, 1999. The increase was primarily due to
the increase in interest earned on the Partnership's short-term investments,
which was due to an increase in interest rates earned and to a lesser extent,
cash available for investment. The increase was partially offset by an increase
in general and administrative expenses, which was due to a 1999 adjustment of
estimated overhead expenses to actual. This adjustment resulted in lower than
expected general and administrative expenses for the year ended December 31,
1999.

Liquidity and Capital Resources
The increase in the Partnership's cash position of $47,800 for the year ended
December 31, 2001 was the result of net cash provided by operating activities.
Liquid assets (including cash and cash equivalents) of the Partnership as of
December 31, 2001 were comprised of amounts reserved for the Lakewood
environmental matter (as hereafter discussed) and Partnership liquidation
expenses.

Net cash provided by operating activities for the year ended December 31, 2001
was $47,800, a $87,700 decrease when compared to the year ended December 31,
2000. This decrease was primarily due to the decrease in net income as
previously discussed.

Net cash provided by investing activities decreased by $3,727,800 for the year
ended December 31, 2001 when compared to the year ended December 31, 2000. The
decrease was the result of the Partnership utilizing cash reserves to make
investments in debt securities during 1999 and the subsequent maturity of those
investments during 2000.

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

As described in Note 3 of 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, together with other potential post closing
matters related to the Partnership's properties, it will be necessary for the
Partnership to remain in existence. When the environmental matter at Lakewood
is satisfactorily remediated, 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.

4

<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.

                                                                             5

<PAGE>

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

(a) & (e) DIRECTORS

The Partnership has no directors. First Capital Financial LLC ("FCFC")
(formerly known as First Capital Financial Corporation) is the Managing General
Partner. The directors of FCFC, as of March 1, 2002, are shown in the table
below. Directors serve for one year or until their successors are elected. The
next annual meeting of FCFC will be held in June 2002.

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

Douglas Crocker II, 61, has been President and Chief Executive Officer since
December 1992 and a Director since January 1993 of the Managing General
Partner. Mr. Crocker has been President, Chief Executive Officer and trustee of
Equity Residential Properties Trust since March 31, 1993. Mr. Crocker is a
member of the Board of Directors of Wellsford Real Properties Inc. and Ventas,
Inc. Mr. Crocker was an Executive Vice President of Equity Financial and
Management Company ("EFMC") from November 1992 until March 31, 1997.

Donald J. Liebentritt, 51, has been Vice President of the Managing General
Partner since July 1997 and a Director since May 2000 and is President of
Equity Group Investments, LLC ("EGI"), Vice President and Assistant Secretary
of Great American Management and Investment Inc. ("Great American") and was
Principal and Chairman of the Board of Rosenberg and Liebentritt P.C. until its
dissolution in 1999. Mr. Liebentritt has also been a director of Davel
Communications, Inc. since November 2000.

(b) & (e) EXECUTIVE OFFICERS

The Partnership does not have any executive officers. The executive officers of
the Managing General Partner as of March 1, 2002 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>
        Douglas Crocker II........ President and Chief Executive Officer
        Donald J. Liebentritt..... Vice President
        Philip Tinkler............ Vice President--Finance and Treasurer
</TABLE>

PRESIDENT AND CEO--See Table of Directors above.

VICE PRESIDENT-- See Table of Directors above.

Philip Tinkler, 37, has been Vice President of Finance and Treasurer of the
Managing General Partner since April 2001, and has also been Vice President/
Assistant Treasurer of Great American since March 2001, and Treasurer and Vice
President of Accounting for EGI since May 2000.

(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)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, 2001. 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)None.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(a)As of March 1, 2002 no person of record owned or was known by the
   Partnership to own beneficially more than 5% of the Partnership's 60,000
   Units then outstanding.

(b)The Partnership has no directors or executive officers. As of March 1, 2002,
   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 $19,900 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, 2001, total fees and reimbursements of $3,500 were due to
   Affiliates.

6

<PAGE>

   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, 2001. For the year ended December 31, 2001, the
   General Partners were allocated Net Profits of $500.

(b)None.

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

(d)None.

                                                                             7

<PAGE>

PART IV

ITEM 14.  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, 2001.

8

<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 22, 2002
                                                /S/  DOUGLAS CROCKER II
                                          By:  ________________________________
                                                     DOUGLAS CROCKER II
                                               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>
<S>                                 <C>             <C>
     /s/  DOUGLAS CROCKER II        March 22, 2002  President,Chief Executive
-------------------------------                               Officer and Director of the
      DOUGLAS CROCKER II                                      Managing General Partner

    /s/   DONALD J. LIEBENTRITT     March 22, 2002  VicePresident and Director of
-------------------------------                         the Managing General Partner
     DONALD J. LIEBENTRITT

       /s/   PHILIP TINKLER          March 22, 2002 VicePresident--Finance and
-------------------------------                         Treasurer
        PHILIP TINKLER
</TABLE>


                                                                             9

<PAGE>

INDEX OF FINANCIAL STATEMENTS, SCHEDULES 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, 2001 and 2000        A-3
         Statements of Partners' Capital for the Years Ended
           December 31, 2001, 2000 and 1999                     A-3
         Statements of Income and Expenses for the Years
           Ended December 31, 2001, 2000 and 1999               A-4
         Statements of Cash Flows for the Years Ended
           December 31, 2001, 2000 and 1999                     A-4
         Notes to Financial Statements                       A-5 to A-6
         --------------------------------------------------- ----------
</TABLE>

SCHEDULES FILED AS PART OF THIS REPORT

All 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 2000 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.

                                                                            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, 2001 and 2000, 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, 2001. 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, 2001 and 2000, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2001, in conformity with accounting principles generally accepted
in the United States.

                                          ERNST & YOUNG LLP

Chicago, Illinois
February 28, 2002

A-2

<PAGE>

BALANCE SHEETS
December 31, 2001 and 2000
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                                2001       2000
             -------------------------------------------
             <S>                             <C>        <C>

             ASSETS
             Cash and cash equivalents       $4,131,900 $4,084,100
             Other assets                         7,800        200
             -------------------------------------------
                                             $4,139,700 $4,084,300
             -------------------------------------------

             LIABILITIES AND PARTNERS' CAPITAL
             Liabilities:
              Accounts payable and accrued
                expenses                     $   34,800 $   31,400
              Due to Affiliates                   3,500      1,200
              Other liabilities                   2,300      2,400
             -------------------------------------------
                                                 40,600     35,000
             -------------------------------------------
             Partners' capital:
              General Partners                  615,100    614,600
              Limited Partners (60,000 Units
                issued and outstanding)       3,484,000  3,434,700
             -------------------------------------------
                                              4,099,100  4,049,300
             -------------------------------------------
                                             $4,139,700 $4,084,300
             -------------------------------------------
</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the years ended December 31, 2001, 2000 and 1999
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                   General   Limited
                                   Partners  Partners    Total
               <S>                 <C>      <C>        <C>
               -------------------------------------------
               Partners' capital,
                 January 1, 1999   $611,900 $3,167,600 $3,779,500
               Net income for the
                 year ended
                 December 31, 1999    1,200    120,600    121,800
               -------------------------------------------
               Partners' capital,
                 December 31, 1999  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
               -------------------------------------------
</TABLE>

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

<PAGE>

STATEMENTS OF INCOME AND EXPENSES
For the years ended December 31, 2001, 2000 and 1999
(All dollars rounded to nearest 00s except per Unit amounts)

<TABLE>
<CAPTION>
                                                                               2001     2000     1999
<S>                                                                          <C>      <C>      <C>
---------------------------------------------------------------------------- -------- -------- --------
Income:
 Interest                                                                    $165,200 $252,300 $184,200
---------------------------------------------------------------------------- -------- -------- --------
                                                                              165,200  252,300  184,200
---------------------------------------------------------------------------- -------- -------- --------
Expenses:
 General and administrative:
   Affiliates                                                                  19,900    8,200   21,400
   Nonaffiliates                                                               95,500   96,100   41,000
---------------------------------------------------------------------------- -------- -------- --------
                                                                              115,400  104,300   62,400
---------------------------------------------------------------------------- -------- -------- --------
Net income                                                                   $ 49,800 $148,000 $121,800
---------------------------------------------------------------------------- -------- -------- --------
Net income allocated to General Partners                                     $    500 $  1,500 $  1,200
---------------------------------------------------------------------------- -------- -------- --------
Net income allocated to Limited Partners                                     $ 49,300 $146,500 $120,600
---------------------------------------------------------------------------- -------- -------- --------
Net income allocated to Limited Partners per Unit (60,000 Units outstanding) $   0.82 $   2.44 $   2.01
---------------------------------------------------------------------------- -------- -------- --------
</TABLE>

STATEMENTS OF CASH FLOWS
For the years ended December 31, 2001, 2000 and 1999
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                                                                      2001        2000        1999
<S>                                                                                <C>         <C>         <C>
---------------------------------------------------------------------------------- ----------  ----------  -----------
Cash flows from operating activities:
 Net income                                                                        $   49,800  $  148,000  $   121,800
 Adjustments to reconcile net income to net cash provided by operating activities:
   Changes in assets and liabilities:
     (Increase) decrease in other assets                                               (7,600)      6,500
     Increase (decrease) in accounts payable and accrued expenses                       3,400     (17,100)     (14,200)
     Increase (decrease) in due to Affiliates                                           2,300      (1,800)
     (Decrease) in other liabilities                                                     (100)       (100)      (5,100)
---------------------------------------------------------------------------------- ----------  ----------  -----------
       Net cash provided by operating activities                                       47,800     135,500      102,500
---------------------------------------------------------------------------------- ----------  ----------  -----------
Cash flows from investing activities:
 Decrease (increase) in investments in debt securities                                          3,727,800   (3,727,800)
---------------------------------------------------------------------------------- ----------  ----------  -----------
       Net cash provided by (used for) investing activities                                --   3,727,800   (3,727,800)
---------------------------------------------------------------------------------- ----------  ----------  -----------
       Net cash from financing activities                                                  --          --           --
---------------------------------------------------------------------------------- ----------  ----------  -----------
Net increase (decrease) in cash and cash equivalents                                   47,800   3,863,300   (3,625,300)
Cash and cash equivalents at the beginning of the year                              4,084,100     220,800    3,846,100
---------------------------------------------------------------------------------- ----------  ----------  -----------
Cash and cash equivalents at the end of the year                                   $4,131,900  $4,084,100  $   220,800
---------------------------------------------------------------------------------- ----------  ----------  -----------
</TABLE>

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

<PAGE>

NOTES TO FINANCIAL STATEMENTS
December 31, 2001

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. Upon resolution of
the environmental matter disclosed in Note 3 and other post closing matters
related to the sale of the Partnership's properties, the Partnership will make
a liquidating distribution and dissolve.

In 1998, the Company adopted the Financial Accounting Standards Board's
Statement of Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information". The Partnership has one
reportable segment as the Partnership is in the disposition phase of its life
cycle, wherein it is seeking to resolve post-closing matters relating to
properties sold by the Partnership. The adoption of Statement 131 did not
affect the results of operations or financial position.

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, 2001 and 2000.

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

                                                                            A-5

<PAGE>

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 years ended
December 31, 2001, 2000 and 1999. During the years ended December 31, 2001,
2000 and 1999 the General Partners were allocated Net Profits of $500, $1,500
and $1,200, respectively.

Fees and reimbursements paid and payable by the Partnership to Affiliates for
the years ended December 31, 2001, 2000 and 1999 were as follows:

<TABLE>
<CAPTION>
                                          2001            2000            1999
                                    ---------------- --------------- ---------------
                                      Paid   Payable  Paid   Payable  Paid   Payable
------------------------------------------------------------------------------------
<S>                                 <C>      <C>     <C>     <C>     <C>     <C>
Legal                               $   None $ None  $  None $ None  $ 3,000 $ None
Reimbursement of expenses, at cost:
 --Accounting                          2,000   None    3,400   None    8,300  1,100
 --Investor communication             15,600  3,500    6,600  1,200   10,100  1,900
------------------------------------------------------------------------------------
                                     $17,600 $3,500  $10,000 $1,200  $21,400 $3,000
------------------------------------------------------------------------------------
</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 California Regional Water Quality Control Board has approved
the purchaser's revised remedial action plan (the Plan") for the site. The
remediation is scheduled to begin in 2002, provided the proper permits are
obtained. There can be no assurance as to the timing of successful completion
of the Plan. 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