<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, 1999

                                       OR

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

  For the transition period from        to

  Commission File Number 0-12538

                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,
               Suite 700,
           Chicago, Illinois                           60606-2607
    (Address of principal executive                    (Zip Code)
                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
Corporation (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, 1999. Ordinary routine legal matters incidental to
the business which were not deemed material were pursued during the quarter
ended December 31, 1999.

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, 2000, there were 7,805 Holders of Units.

ITEM 6. SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                      For the Years Ended December 31,
                          ---------------------------------------------------------
                             1999       1998       1997        1996        1995
-----------------------------------------------------------------------------------
<S>                       <C>        <C>        <C>         <C>         <C>
Total revenues            $  184,200 $  289,600 $ 5,994,200 $ 5,074,600 $ 4,946,700
Net income                $  121,800 $   38,900 $ 3,850,100 $ 1,389,800 $   173,300
Net income allocated to
 Limited Partners         $  120,600 $   38,500 $ 2,790,200 $ 1,478,900 $   276,900
Net income allocated to
 Limited Partners per
 Unit (60,000 Units
 outstanding)             $     2.01 $     0.64 $     46.50 $     24.65 $      4.62
Total assets              $3,955,300 $3,852,800 $12,278,900 $28,137,300 $28,553,900
Distributions to Limited
 Partners per Unit
 (60,000 Units
 outstanding) (a)               None       None $    447.93 $     28.00 $     25.68
Return of capital to
 Limited Partners per
 Unit (60,000 Units
 outstanding) (b)               None       None $    401.43 $      3.35       21.06
Other data: Investment
 in commercial rental
 properties (net of
 accumulated
 depreciation and
 amortization)                  None       None        None $23,837,900 $24,149,000
Number of real property
 interests owned at
 December 31                    None       None        None           4           4
-----------------------------------------------------------------------------------
</TABLE>
Notes:

(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 generally accepted accounting principles ("GAAP"):

<TABLE>
<CAPTION>
                                        For the Years Ended December 31,
                          ----------------------------------------------------------------
                             1999         1998          1997         1996         1995
-------------------------------------------------------------------------------------------
<S>                       <C>          <C>          <C>           <C>          <C>
Cash Flow (as defined in
 the Partnership
 Agreement) (a)           $   121,800  $    38,900  $  1,614,700  $ 2,533,800  $ 2,443,600
Items of reconciliation:
 Changes in assets and
  liabilities:
 Decrease in current
  assets                                    22,600        44,000       76,700       79,400
 (Decrease) increase in
  current liabilities         (19,300)      (5,000)     (322,500)    (162,600)      85,600
-------------------------------------------------------------------------------------------
Net cash provided by
 operating activities     $   102,500  $    56,500  $  1,336,200  $ 2,447,900  $ 2,608,600
-------------------------------------------------------------------------------------------
Net cash (used for)
 provided by investing
 activities               $(3,727,800) $         0  $ 25,970,300  $(1,132,900) $(1,094,700)
-------------------------------------------------------------------------------------------
Net cash (used for)
 financing activities     $         0  $(8,460,000) $(18,983,000) $(1,643,800) $(1,497,600)
-------------------------------------------------------------------------------------------
</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-7
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.

One of the Partnership's objectives was to dispose of its properties when
market conditions allowed for the achievement of the maximum possible sales
price. The Partnership, has substantially completed 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. Through December
31, 1999, the Partnership has sold all of its real property investments.

Operations
The Partnership's property operations for the years ended December 31, 1999 and
1998 were comprised substantially of post-closing matters related to properties
sold during 1997.

Comparison of the year ended December 31, 1999 to the year ended December 31,
1998.
Net income increased by $82,900 for the year ended December 31, 1999 when
compared to the year ended December 31, 1998. The increase was primarily due to
the 1998 recognition of a tax imposed by the District of Columbia in connection
with the sale of Foxhall Square Office Building ("Foxhall"). Partially
offsetting the increase was a decrease in interest income due to a decrease in
cash available for investment resulting from the distribution of Foxhall Sale
Proceeds during 1998.

Comparison of the year ended December 31, 1998 to the year ended December 31,
1997.
Net income decreased by $3,811,200 for the year ended December 31, 1998 when
compared to the year ended December 31, 1997. The decrease in net income was
primarily due to the effects of the 1997 sales of the Partnership's remaining
properties. In addition, the Partnership realized less interest income during
the 1998 period as compared to 1997 resulting from a reduction in the amount of
cash available for investment. The reduction in cash was primarily the result
of the Partnership's 1998 distribution of the proceeds from the sale of
Foxhall.

Liquidity and Capital Resources
The decrease in the Partnership's cash position of $3,625,300 for the year
ended December 31, 1999 was primarily the result of an increase in investments
in debt securities. Liquid assets (including cash, cash equivalents and
investments in debt securities) of the Partnership as of December 31, 1999 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, 1999
was $102,500, a $46,000 increase when compared to the year ended December 31,
1998. This increase was primarily due to the increase in net income as
previously discussed.

Net cash used for investing activities increased by $3,727,800 for the year
ended December 31, 1999 when compared to the year ended December 31, 1998. The
change was the result of the Partnership utilizing cash reserves to make
investments in debt securities during 1999.

Investments in debt securities are a result of the continued extension of the
maturities of certain of the Partnership's short-term investments in an effort
to maximize the return on these amounts while they are held as working capital
reserves. These investments are of investment-grade and mature less than one
year from their date of purchase.

The Partnership has no financial instruments for which there are significant
market risks. Due to the timing of the maturities and the liquid nature of the
Partnership's investments in debt securities, the Partnership does not believe
that it has material market risk.

4
<PAGE>

The decrease in net cash used for financing activities of $8,460,000 for the
year ended December 31, 1999 when compared to the year ended December 31, 1998
was due to the February 28, 1998 distribution of Foxhall Sale Proceeds.

In prior years, the Partnership discussed the nature and progress of its plans
to become Year 2000 ready. In late 1999, the Partnership completed its
remediation and testing of systems. As a result of those planning and
implementation efforts, the Partnership experienced no significant disruptions
in mission critical information technology and non-information technology
systems and believes those systems successfully responded to the Year 2000 date
change. The Partnership incurred minimal expenses in connection with
remediating its systems. The Partnership is not aware of any material problems
resulting from Year 2000 issues, either with its products, its internal
systems, or the products and services of third parties. The Partnership will
continue to monitor its mission critical computer applications and those of its
suppliers and vendors throughout the year 2000 to ensure that any latent Year
2000 matters that may arise are addressed promptly.

As described in Note 5 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.

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 Corporation ("FCFC")
is the Managing General Partner. The directors of FCFC, as of March 31, 2000,
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
2000.

<TABLE>
<CAPTION>
            Name                                                        Office
            ----                                                       --------
       <S>                                                             <C>
       Douglas Crocker II............................................. Director
       Sheli Z. Rosenberg............................................. Director
</TABLE>

Douglas Crocker II, 59, 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. and was a member of the Board of Directors of Horizon Group, Inc. from
July 1996 to June 1998. Mr. Crocker was an Executive Vice President of Equity
Financial and Management Company ("EFMC") from November 1992 until March 31,
1997.

Sheli Z. Rosenberg, 58, was President and Chief Executive Officer of the
Managing General Partner from December 1990 to December 1992 and has been a
Director of the Managing General Partner since September 1983; has been vice
chairman of Equity Group Investments, LLC ("EGI") since January 2000. From
November 1994 until 1999 had been President and Chief Executive Officer of EGI.
Ms. Rosenberg has been a Director of Great American Management and Investment
Inc. ("Great American") since June 1984 and is a director of various
subsidiaries of Great American. She is also a director of Anixter International
Inc., Capital Trust Inc., CVS Corporation, Danka Business Systems PLC, Dynergy,
Inc., and Manufactured Home Communities, Inc. She is also a trustee of Equity
Residential Properties Trust and Equity Office Properties Trust. Ms. Rosenberg
was a Principal of Rosenberg & Liebentritt, P.C., ("R&L") from 1980 to
September 1997. R&L served as counsel to the Partnership, the Managing General
Partner and certain of their Affiliates 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 31, 2000 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
       Norman M. Field.................... Vice President--Finance and Treasurer
</TABLE>

PRESIDENT AND CEO-- See Table of Directors above.

Donald J. Liebentritt, 49, has been Vice President of the Managing General
Partner since July 1997 and is President of EGI, Vice President and Assistant
Secretary of Great American and was Principal and Chairman of the Board of R&L.

Norman M. Field, 51, has been Vice President of Finance and Treasurer of the
Managing General Partner since February 1984, and also served as Vice President
of Great American from July 1983 until March 1995 and from July 1997 to the
present.

(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.

6
<PAGE>

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, 1999. 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, 2000 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,
    2000, none of the executive officers and directors of First Capital
    Financial Corporation, 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 $18,400 from the
    Partnership for personnel, 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, 1999, total
    fees and reimbursements of $3,000 were 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, 1999. For the year ended
    December 31, 1999, the General Partners were allocated Net Profits of
    $1,200.

(b) Rosenberg & Liebentritt, P.C. ("Rosenberg"), served as legal counsel to the
    Partnership, the Managing General Partner and certain of their Affiliates.
    Donald J. Liebentritt, Vice President of the Managing General Partner was a
    Principal and

                                                                               7
<PAGE>

   Chairman of the Board of Rosenberg. Compensation for these services were on
   terms which were fair, reasonable and no less favorable to the Partnership
   than reasonably could have been obtained from unaffiliated persons. Total
   legal fees charged by Rosenberg for the year ended December 31, 1999 were
   $3,000. As of December 31, 1999, there were no fees due to Rosenberg.

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

(d) None.

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,
1999.

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 CORPORATION
                                           MANAGING GENERAL PARTNER

                                                 /s/  DOUGLAS CROCKER II
Dated: March 24, 2000                   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 24, 2000    President, Chief Executive
______________________________________                      Officer and Director of
          DOUGLAS CROCKER II                                the Managing General
                                                            Partner

        /s/ SHELI Z. ROSENBERG           March 24, 2000    Director of the Managing
______________________________________                      General Partner
          SHELI Z. ROSENBERG

      /s/ DONALD J. LIEBENTRITT          March 24, 2000    Vice President
______________________________________
        DONALD J. LIEBENTRITT

         /s/ NORMAN M. FIELD             March 24, 2000    Vice President--Finance
______________________________________                      and Treasurer
</TABLE>   NORMAN M. FIELD

                                                                               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, 1999 and 1998                        A-3
Statements of Partners' Capital for the Years Ended December 31,
 1999, 1998 and 1997                                                   A-3
Statements of Income and Expenses for the Years Ended December 31,
 1999, 1998 and 1997                                                   A-4
Statements of Cash Flows for the Years Ended December 31, 1999,
 1998 and 1997                                                         A-4
Notes to Financial Statements                                       A-5 to A-7
------------------------------------------------------------------------------
</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 1998 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 (27) Financial Data Schedule

                                                                             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, 1999 and 1998, 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, 1999. 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, 1999 and 1998, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1999, in conformity with accounting principles generally accepted
in the United States.

                                        Ernst & Young LLP

Chicago, Illinois
February 15, 2000

A-2
<PAGE>

BALANCE SHEETS
December 31, 1999 and 1998
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                                           1999       1998
-----------------------------------------------------------------------------
<S>                                                     <C>        <C>
ASSETS
Cash and cash equivalents                               $  220,800 $3,846,100
Investment in debt securities                            3,727,800
Other assets                                                 6,700      6,700
-----------------------------------------------------------------------------
                                                        $3,955,300 $3,852,800
-----------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
 Accounts payable and accrued expenses                  $   48,500 $   62,700
 Due to Affiliates                                           3,000      3,000
 Other liabilities                                           2,500      7,600
-----------------------------------------------------------------------------
                                                            54,000     73,300
-----------------------------------------------------------------------------
Partners' capital:
 General Partners                                          613,100    611,900
 Limited Partners (60,000 Units issued and outstanding)  3,288,200  3,167,600
-----------------------------------------------------------------------------
                                                         3,901,300  3,779,500
-----------------------------------------------------------------------------
                                                        $3,955,300 $3,852,800
-----------------------------------------------------------------------------
</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the years ended December 31, 1999, 1998 and 1997
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                            General     Limited
                                           Partners    Partners       Total
-------------------------------------------------------------------------------
<S>                                        <C>        <C>          <C>
Partners' (deficit) capital, January 1,
 1997                                      $(448,400) $27,214,700  $26,766,300
Net income for the year ended December
 31, 1997                                  1,059,900    2,790,200    3,850,100
Distributions for the year ended December
 31, 1997                                             (26,875,800) (26,875,800)
-------------------------------------------------------------------------------
Partners' capital, December 31, 1997         611,500    3,129,100    3,740,600
Net income for the year ended December
 31, 1998                                        400       38,500       38,900
-------------------------------------------------------------------------------
Partners' capital, December 31, 1998         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
-------------------------------------------------------------------------------
</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, 1999, 1998 and 1997
(All dollars rounded to nearest 00s except per Unit amounts)

<TABLE>
<CAPTION>
                                                1999     1998       1997
---------------------------------------------------------------------------
<S>                                           <C>      <C>       <C>
Income:
 Rental                                       $        $  9,700  $2,595,600
 Interest                                      184,200  279,900     599,400
 Net gain on sales of property                                    2,799,200
---------------------------------------------------------------------------
                                               184,200  289,600   5,994,200
---------------------------------------------------------------------------
Expenses:
 Depreciation and amortization                                      563,800
 Property operating:
  Affiliates                                            (60,800)    164,500
  Nonaffiliates                                           4,400     511,700
 Real estate taxes                                                  224,100
 Insurance--Affiliate                                                24,600
 Repairs and maintenance                                  5,000     382,600
 General and administrative:
  Affiliates                                    21,400   22,600      23,200
  Nonaffiliates                                 40,700  111,300     142,500
---------------------------------------------------------------------------
                                                62,100   82,500   2,037,000
---------------------------------------------------------------------------
Income before state income tax expense         122,100  207,100   3,957,200
 State income tax expense                          300  168,200     107,100
---------------------------------------------------------------------------
Net Income                                    $121,800 $ 38,900  $3,850,100
---------------------------------------------------------------------------
Net income allocated to General Partners      $  1,200 $    400  $1,059,900
---------------------------------------------------------------------------
Net income allocated to Limited Partners      $120,600 $ 38,500  $2,790,200
---------------------------------------------------------------------------
Net income allocated to Limited Partners per
 Unit (60,000 Units outstanding)              $   2.01 $   0.64  $    46.50
---------------------------------------------------------------------------
</TABLE>

STATEMENTS OF CASH FLOWS
For the years ended December 31, 1999, 1998 and 1997
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                            1999         1998          1997
--------------------------------------------------------------------------------
<S>                                      <C>          <C>          <C>
Cash flows from operating activities:
 Net income                              $   121,800  $    38,900  $  3,850,100
 Adjustments to reconcile net income to
  net cash provided by operating
  activities:
  Net gain on sales of property                                      (2,799,200)
  Depreciation and amortization                                         563,800
  Changes in assets and liabilities:
  Decrease in rents receivable                             25,400        34,800
  (Increase) decrease in other assets                      (2,800)        9,200
  (Decrease) increase in accounts
   payable and accrued expenses              (14,200)       2,600      (202,900)
  (Decrease) in due to Affiliates                          (5,200)      (12,300)
  (Decrease) in other liabilities             (5,100)      (2,400)     (107,300)
--------------------------------------------------------------------------------
   Net cash provided by operating
    activities                               102,500       56,500     1,336,200
--------------------------------------------------------------------------------
Cash flows from investing activities:
 Payments for capital and tenant
  improvements                                                         (312,200)
 Proceeds from the sales of property                                 25,982,500
 (Increase) decrease in investments in
  debt securities                         (3,727,800)                   300,000
--------------------------------------------------------------------------------
   Net cash (used for) provided by
    investing activities                  (3,727,800)         --     25,970,300
--------------------------------------------------------------------------------
Cash flows from financing activities:
 Distributions paid to Partners                        (8,460,000)  (18,835,800)
 (Decrease) in security deposits                                       (147,200)
--------------------------------------------------------------------------------
   Net cash (used for) financing
    activities                                   --    (8,460,000)  (18,983,000)
--------------------------------------------------------------------------------
Net (decrease) increase in cash and
 cash equivalents                         (3,625,300)  (8,403,500)    8,323,500
Cash and cash equivalents at the
 beginning of the year                     3,846,100   12,249,600     3,926,100
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of
 the year                                $   220,800  $ 3,846,100  $ 12,249,600
--------------------------------------------------------------------------------
</TABLE>

    The accompanying notes are an integral part of the financial statements


A-4
<PAGE>

NOTES TO FINANCIAL STATEMENTS
December 31, 1999

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 5 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.

Property sales are recorded when title transfers and sufficient consideration
has been received by the Partnership. Upon disposition, the related costs and
accumulated depreciation and amortization are removed from the respective
accounts. Any gain or loss is recognized in accordance with GAAP.

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

Investments in debt securities are comprised of obligations of the United
States government and are classified as held-to-maturity. These investments are
carried at their amortized cost basis in the financial statements, which
approximated fair market value. These securities had a maturity of less than
one year when purchased.

The Partnership's financial statements include financial instruments, including
receivables 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, 1999 and 1998.

                                                                             A-5
<PAGE>

Certain reclassifications have been made to the previously reported 1998 and
1997 financial statements in order to provide comparability with the 1999
financial statements. These reclassifications have no effect on net income or
Partners' capital.

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 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, 1999, 1998 and 1997. During the
year ended December 31, 1999, the General Partners were allocated Net Profits
of $1,200. During the year ended December 31, 1998, the General Partners were
allocated Net Profits of $400. During the year ended December 31, 1997, the
General Partners were allocated Net Profits of $1,059,900 which included a net
gain on the sale of four properties totaling $1,100,100.

Fees and reimbursements paid/(refunded) and payable by the Partnership to
Affiliates for the years ended December 31, 1999, 1998 and 1997 were as
follows:

<TABLE>
<CAPTION>
                              1999                1998                 1997
                         --------------- ----------------------- ----------------
                          Paid   Payable Paid/(refunded) Payable   Paid   Payable
---------------------------------------------------------------------------------
<S>                      <C>     <C>     <C>             <C>     <C>      <C>
Property management and
 leasing fees            $  None $ None     $(59,400)    $ None  $163,100 $ None
Reimbursement of
 property insurance
 premiums                   None   None       (1,400)      None    24,600   None
Legal                      3,000   None        7,100       None    86,400  7,500
Reimbursement of
 expenses, at cost:
 --Accounting              8,300  1,100        7,600      1,100    13,100    400
 --Investor
  communication           10,100  1,900       11,400      1,900    10,200    300
---------------------------------------------------------------------------------
                         $21,400 $3,000     $(34,700)    $3,000  $297,400 $8,200
---------------------------------------------------------------------------------
</TABLE>

The variance between amounts listed in this table and the income statement are
due to capitalized legal costs.

3. Property sales:

On May 5, 1997, the Partnership consummated the sale of Peachtree, located in
Atlanta, Georgia, for a sale price of $7,749,200. Net proceeds from this
transaction were $7,547,500, which was net of closing expenses. The Partnership
reported a net gain of $1,204,300 for the year ended December 31, 1997 in
connection with this sale and distributed $7,440,000 or $124.00 per Unit on
August 31, 1997 to Limited Partners of record as of May 5, 1997. The
Partnership recorded a gain of $3,942,400 for income tax purposes for the year
ended December 31, 1997.

On May 16, 1997, a joint venture in which the Partnership owned a 50% interest,
consummated the sale of Lakewood Square Shopping Center ("Lakewood"), located
in Lakewood, California, for a sale price of $17,750,000, of which the

A-6
<PAGE>

Partnership's share was $8,875,000. The Partnership's share of net proceeds
from this transaction was $8,660,000, which was net of closing expenses. The
Partnership reported a net gain of $166,600 for the year ended December 31,
1997 in connection with this sale and distributed $8,640,000 or $144.00 per
Unit on August 31, 1997 to Limited Partners of record as of May 16, 1997. The
Partnership recorded a gain of $3,238,700 for income tax purposes for the year
ended December 31, 1997.

On June 27, 1997, a joint venture in which the Partnership owned a 50%
interest, consummated the sale of 12621 Featherwood Office Building, located in
Houston, Texas, for a sale price of $3,146,700, of which the Partnership's
share was $1,573,350. The Partnership's share of net proceeds from this
transaction was $1,492,000, which was net of closing expenses. The Partnership
reported a net loss of $53,700 for the year ended December 31, 1997 in
connection with this sale and distributed $1,495,800 or $24.93 per Unit on
November 30, 1997 to Limited Partners of record as of June 27, 1997. The
Partnership recorded a loss of $848,000 for income tax purposes for the year
ended December 31, 1997.

On November 10, 1997, a joint venture in which the Partnership owned a 50%
interest, consummated the sale of Foxhall Square Office Building, located in
Washington D.C., for a sale price of $17,125,000, of which the Partnership's
share was $8,562,500. The Partnership's share of proceeds from this transaction
was $8,283,000, which was net of closing expenses. The Partnership reported a
net gain for financial reporting purposes of $1,079,000 for the year ended
December 31, 1997 from this sale and distributed $8,250,000 or $137.50 per Unit
on February 28, 1998 to Limited Partners of record as of November 10, 1997. The
Partnership recorded a gain of $2,316,600 for income tax purposes for the year
ended December 31, 1997.

The above transactions, with the exception of post-closing matters, were all-
cash sales, with no further involvement on the part of the Partnership.

4. State Income tax:

State income tax expense for 1998 is comprised substantially of a tax imposed
by the District of Columbia, based on taxable income. State income tax expense
for 1997 is comprised substantially of a tax imposed by the state of Georgia,
based on taxable income. The 1998 state income tax expense includes a change in
estimate of tax due related to the 1997 sales of properties.

5. Environmental matter:

In 1996, the Managing General Partner became aware of the existence of
hazardous substances in the soil and groundwater under 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 relating to the above-
described matter, or any other environmental matter, against the Partnership.
During 1998, the purchaser submitted its corrective action plan to the
California Regional Water Quality Board (the "Water Board"). The Water Board
subsequently approved this plan subject to its review of purchaser's pilot
study (the "Pilot Study"). The Plan provided for the recommended method for
clean up and the obtaining of regulatory approval upon completion. In February
2000, purchaser reported that the results of the Pilot Study indicated that the
plan may not adequately address some of the contamination in the soil below
Lakewood. In response, in February 2000, purchaser presented an outline of its
alternative plan (the "Alternative Plan") to the Water Board. Purchaser is
awaiting final approval from the Water Board to begin implementation of the
Alternative Plan. The timing of the completion of the remediation process is
contingent upon, among other things, the Water Board's issuance of this
approval. Accordingly, 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-7