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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549-1004



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FORM 10-Q



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------



For the period ended September 30, 2003



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 0-15538



First Capital Income Properties, Ltd.Series XI

(Exact name of registrant as specified in its charter)



|Illinois                                                       |  | 36-3364279                          
|-------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|Two North Riverside Plaza, Suite 700, Chicago, Illinois        |  | 60606-2607 (Zip Code)               
|(Address of principal executive offices)                       |  |                                     



(312) 207-0020

(Registrants telephone number, including area code)



Not applicable

(Former name, former address and former
fiscal year, if changed since last report)



Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.  Yes  x    No   ̈



Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange  Act).   Yes  x     No   ̈



Documents incorporated by reference:



The First Amended and Restated Certificate and Agreement of Limited Partnership filed as Exhibit A to the Partnerships Prospectus dated September 12, 1985, included in the
Partnerships Registration Statement on Form S-11, is incorporated herein by reference in Part I of this report.



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PART I. FINANCIAL INFORMATION



ITEM 1. FINANCIAL STATEMENTS



BALANCE SHEETS

(All dollars rounded to nearest 00s)



|                                                                                                    |  | September 30, 2003 (Unaudited) |            | December 31, 2002
|--------------------------------------------------------------------------------------------------- |  | ------------------------------ | ---------- | -----------------
|                                                                                                   
|                                                                                                    |  |                               
|ASSETS                                                                                              |  |                                |            |                  
|Real estate held for disposition                                                                    |  | $                              | 7,739,600  |                  
|Cash and cash equivalents                                                                           |  |                                | 5,790,800  |                  
|Rents receivable                                                                                    |  |                                | 690,700    |                  
|Other assets (net of accumulated amortizationon leasing commissions of $6,200 and $0, respectively) |  |                                | 126,700    |                  
|                                                                                                   
|                                                                                                    |  | $                              | 14,347,800 |                  
|                                                                                                   
|                                                                                                   
|LIABILITIES AND PARTNERS CAPITAL                                                                  
|Liabilities:                                                                                        |  |                                |            |                  
|Front-End Fees loan payable to Affiliate                                                            |  | $                              | 8,295,200  |                  
|Accrued real estate taxes                                                                           |  |                                | 1,101,700  |                  
|Accounts payable and accrued expenses                                                               |  |                                | 445,700    |                  
|Due to Affiliates, net                                                                              |  |                                | 182,400    |                  
|Security deposits                                                                                   |  |                                | 53,300     |                  
|Distribution payable                                                                                |  |                                | 230,500    |                  
|Other liabilities                                                                                   |  |                                | 185,300    |                  
|                                                                                                   
|                                                                                                    |  |                                | 10,494,100 |                  
|                                                                                                   
|Partners Capital:                                                                                  |  |                                |            |                  
|General Partner                                                                                     |  |                                | 1,391,500  |                  
|Limited Partners (57,621 Units issued and outstanding)                                              |  |                                | 2,462,200  |                  
|                                                                                                   
|                                                                                                    |  |                                | 3,853,700  |                  
|                                                                                                   
|                                                                                                    |  | $                              | 14,347,800 |                  
|                                                                                                   



STATEMENTS OF PARTNERS CAPITAL

For the nine months ended September 30, 2003 (Unaudited)

and the year ended
December 31, 2002

(All dollars rounded to nearest 00s)



|                                                           |  | GeneralPartner |           |   | LimitedPartners |   |            | Total | 
|---------------------------------------------------------- |  | -------------- | --------- | - | --------------- | - | ---------- | ----- | 
|                                                          
|Partners capital,January 1, 2002                          |  | $              | 1,414,200 |   |                 | $ | 6,326,600  |       | 
|Net (loss) for theyear ended December 31,2002              |  |                | (28,600   | ) |                 |   | (2,836,000 | )     | 
|Distributions forthe year ended December 31,2002           |  |                |          |   |                 |   | (921,900   | )     | 
|                                                          
|Partners capital, December 31,2002                        |  |                | 1,385,600 |   |                 |   | 2,568,700  |       | 
|Net income for the nine months endedSeptember 30, 2003     |  |                | 5,900     |   |                 |   | 585,000    |       | 
|Distributions for the nine months ended September 30, 2003 |  |                |          |   |                 |   | (691,500   | )     | 
|                                                          
|Partners capital, September 30, 2003                      |  | $              | 1,391,500 |   |                 | $ | 2,462,200  |       | 
|                                                          



2

The
accompanying notes are an integral part of the financial statements



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STATEMENTS OF INCOME AND EXPENSES

For the quarters ended September 30, 2003 and 2002

(Unaudited)

(All dollars rounded to nearest 00s

except per Unit amounts)



|                                                                           |  | 2003 |         |   | 2002 |  
|-------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | -
|                                                                          
|Income:                                                                    |  |      |         |   |      |  
|Rental                                                                     |  | $    |        |   |      | $
|Interest                                                                   |  |      | 11,800  |   |      |  
|                                                                          
|                                                                           |  |      | 11,800  |   |      |  
|                                                                          
|Expenses:                                                                  |  |      |         |   |      |  
|General and administrative:                                                |  |      |         |   |      |  
|Affiliates                                                                 |  |      | 7,300   |   |      |  
|Nonaffiliates                                                              |  |      | 24,800  |   |      |  
|                                                                          
|                                                                           |  |      | 32,100  |   |      |  
|                                                                          
|(Loss) from continuing operations                                          |  |      | (20,300 | ) |      |  
|                                                                          
|Income from discontinued operations                                        |  |      | 243,700 |   |      |  
|                                                                          
|Net income                                                                 |  | $    | 223,400 |   |      | $
|                                                                          
|Net income allocated toGeneral Partner                                     |  | $    | 2,200   |   |      | $
|                                                                          
|Net income allocated toLimited Partners                                    |  | $    | 221,200 |   |      | $
|                                                                          
|Net income allocated toLimited Partners per Unit(57,621 Units outstanding) |  | $    | 3.84    |   |      | $
|                                                                          



STATEMENTS OF INCOME AND EXPENSES

For the nine months ended September 30, 2003 and 2002

(Unaudited)

(All dollars rounded to nearest 00s

except per Unit amounts)



|                                                                           |  | 2003 |         |   | 2002 |  
|-------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | -
|                                                                          
|Income:                                                                    |  |      |         |   |      |  
|Rental                                                                     |  | $    |        |   |      | $
|Interest                                                                   |  |      | 46,000  |   |      |  
|                                                                          
|                                                                           |  |      | 46,000  |   |      |  
|                                                                          
|Expenses:                                                                  |  |      |         |   |      |  
|General and administrative:                                                |  |      |         |   |      |  
|Affiliates                                                                 |  |      | 21,800  |   |      |  
|Nonaffiliates                                                              |  |      | 84,400  |   |      |  
|                                                                          
|                                                                           |  |      | 106,200 |   |      |  
|                                                                          
|(Loss) from continuing operations                                          |  |      | (60,200 | ) |      |  
|                                                                          
|Income from discontinued operations                                        |  |      | 651,100 |   |      |  
|                                                                          
|Net income                                                                 |  | $    | 590,900 |   |      | $
|                                                                          
|Net income allocated toGeneral Partner                                     |  | $    | 5,900   |   |      | $
|                                                                          
|Net income allocated toLimited Partners                                    |  | $    | 585,000 |   |      | $
|                                                                          
|Net income allocated toLimited Partners per Unit(57,621 Units outstanding) |  | $    | 10.15   |   |      | $
|                                                                          







STATEMENTS OF CASH FLOWS

For the nine months ended September 30, 2003 and 2002

(Unaudited)

(All dollars rounded to nearest 00s)



|                                                                                  |  | 2003 |           |   | 2002 |  
|--------------------------------------------------------------------------------- |  | ---- | --------- | - | ---- | -
|                                                                                 
|Cash flows from operating activities:                                             |  |      |           |   |      |  
|Net income                                                                        |  | $    | 590,900   |   |      | $
|Adjustments to reconcile net income to net cash provided by operating activities: |  |      |           |   |      |  
|Depreciation and amortization                                                     |  |      | 6,200     |   |      |  
|Changes in assets and liabilities:                                                |  |      |           |   |      |  
|(Increase) decrease in rents receivable                                           |  |      | (25,500   | ) |      |  
|(Increase) in other assets                                                        |  |      | (70,400   | ) |      |  
|Increase in accrued real estate taxes                                             |  |      | 483,900   |   |      |  
|(Decrease) in accounts payable and accrued expenses                               |  |      | (186,600  | ) |      |  
|Increase in due to Affiliates                                                     |  |      | 84,300    |   |      |  
|(Decrease) in other liabilities                                                   |  |      |          |   |      |  
|                                                                                 
|Net cash provided by operating activities                                         |  |      | 882,800   |   |      |  
|                                                                                 
|Cash flows from investing activities:                                             |  |      |           |   |      |  
|Payments for building and tenant improvements                                     |  |      | (239,600  | ) |      |  
|Leasing commissions paid                                                          |  |      | (22,700   | ) |      |  
|                                                                                 
|Net cash (used for) investing activities                                          |  |      | (262,300  | ) |      |  
|                                                                                 
|Cash flows from financing activities:                                             |  |      |           |   |      |  
|Distributions to Limited Partners                                                 |  |      | (691,500  | ) |      |  
|(Decrease) increase in security deposits                                          |  |      | (2,800    | ) |      |  
|                                                                                 
|Net cash (used for) financing activities                                          |  |      | (694,300  | ) |      |  
|                                                                                 
|Net (decrease) increase in cash and cash equivalents                              |  |      | (73,800   | ) |      |  
|                                                                                 
|Cash and cash equivalents at the beginning of the period                          |  |      | 5,864,600 |   |      |  
|                                                                                 
|Cash and cash equivalents at the end of the period                                |  | $    | 5,790,800 |   |      | $
|                                                                                 



3

The accompanying notes are
an integral part of the financial statements



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NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2003



1. Summary of significant accounting policies:



Definition of special terms:

Capitalized terms used in this report have the same meaning
as those terms have in the Partnerships Registration Statement filed with the Securities and Exchange Commission on Form S-11. Definitions of these terms are contained in Article III of the First Amended and Restated Certificate and Agreement
of Limited Partnership, which is included in the Registration Statement and incorporated herein by reference.



Accounting policies:

The accompanying unaudited financial statements have been prepared in accordance with accounting principles
generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting
principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating
results for the quarter and nine months ended September 30, 2003 are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. Reference is made to the Partnerships Annual Report for the year ended
December 31, 2002, for a description of other accounting policies and additional details of the Partnerships financial condition, results of operations, changes in Partners capital and changes in cash balances for the year then ended.
The details provided in the notes thereto have not changed except as a result of normal transactions in the interim or as otherwise disclosed herein.



The Partnership utilizes the accrual method of accounting. Under this method, revenues are recorded when earned and expenses are recorded when incurred. Effective July 1, 1998, the
Partnership recognizes rental income which is contingent upon tenants achieving specified targets only to the extent that such targets are attained.



Preparation of the Partnerships financial statements in conformity with accounting principles generally accepted in the United States 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.



Commercial rental property held for
investment is recorded at cost, net of any provisions for value impairment, and depreciated (exclusive of amounts allocated to land) on the straight-line method over their estimated useful lives. Upon classifying a commercial rental property as held
for disposition, no further depreciation or amortization of such property is provided for in the financial statements. Lease acquisition fees are recorded at cost and amortized over the life of each respective lease. Repair and maintenance
expenditures are expensed as incurred; expenditures for improvements are capitalized and depreciated over the estimated life of such improvements.



The Partnership evaluates its commercial rental property for impairment when conditions exist which may indicate that it is probable that the sum of expected future cash flows(undiscounted) from a property is less than its carrying basis. Upon determination that an impairment has occurred, the carrying basis in the rental property is reduced to its estimated fair value.



Since 1999, the Partnership has owned only one property, Marquette Mall and Office Building
(Marquette), which has 382,052 net leasable square feet, is located in Michigan City, Indiana and is currently being held for sale.



The FASB issued Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long Lived Assets. Statement 144 addresses financial accounting
and reporting for the impairment or disposal of long-lived assets. The Standard was adopted in 2002, as management has committed to disposing of its remaining real estate asset. Marquettes operations have been disclosed as discontinued
operations for each period presented as follows:



|                        |  | For the quarter ended September 30, |         | For the nine months ended September 30,
|----------------------- |  | ----------------------------------- | ------- | ---------------------------------------
|                        |  |                                     | 2003    |                                        
|                       
|Income                  |  | $                                   | 822,200 |                                        
|Expenses                |  |                                     | 578,500 |                                        
|                       
|Discontinued Operations |  | $                                   | 243,700 |                                        
|                       



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



2. Related
party transactions:



In accordance with the Partnership Agreement, Net Profits and
Net Losses (exclusive of Net Profits and Net Losses from the sale, disposition or provision for value impairment of Partnership properties) shall be allocated 1% to the General Partner and 99% to the Limited Partners. Net Profits from the sale or
disposition of a Partnership property are allocated: first, prior to giving effect to any distributions of Sale or Refinancing Proceeds from the transaction, to the General Partner and Limited Partners with negative balances in their Capital
Accounts, pro rata in proportion to such respective negative balances, to the extent of the total of such negative balances; second, to each Limited Partner in an amount, if any, necessary to make the positive balance in its Capital Account equal to
the Sale or Refinancing Proceeds to be distributed to such Limited Partner with respect to the sale or disposition of such property; third, to the General Partner in an amount, if any, necessary to make the positive balance in its Capital Account
equal to the Sale or Refinancing Proceeds to be distributed to the General Partner with respect to the sale or disposition of such property; and fourth, the balance, if any, 25% to the General Partner and 75% to the Limited Partners. Net Losses from
the sale, disposition or provision for value impairment of Partnership properties are allocated: first, after giving effect to any distributions of Sale or Refinancing Proceeds from the transaction, to the General Partner and Limited Partners with
positive balances in their Capital Accounts, pro rata in proportion to such respective positive balances, to the extent of the total amount of such positive balances; and second, the balance, if any, 1% to the General Partner and 99% to the Limited
Partners. Notwithstanding anything to the contrary, there shall be allocated to the General Partner not less than 1% of all items of Partnership income, gain, loss, deduction and credit during the existence of the Partnership. For the quarter and
nine months ended September 30, 2003, the General Partner was allocated Net Income of $2,200 and $5,900, respectively. For



4



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the quarter and nine months ended September 30, 2002, the General Partner was allocated Net Income of $1,500 and $2,800, respectively.



Fees and reimbursements paid and payable by the Partnership to Affiliates during the quarter and nine
months ended September 30, 2003 were as follows:



|                                             |  | Paid    |       |            
|-------------------------------------------- |  | ------- | ----- | -----------
|                                             |  | Quarter |       | Nine Months
|                                            
|Discontinued operations:                     |  |         |       |            
|Asset management fees                        |  | $       |      |            
|Reimbursement of property insurance premiums |  |         |      |            
|Real estate tax services                     |  |         |      |            
|General and administrative:                  |  |         |       |            
|Reimbursement of expenses, at cost:          |  |         |       |            
|Accounting                                  |  |         | 7,300 |            
|                                            
|                                             |  | $       | 7,300 |            
|                                            



3. Front-End Fees loan payable to Affiliate:



The Partnership borrowed $8,295,200 from an Affiliate of the General Partner, the
amount needed for the payment of securities sales commissions, Offering and Organizational Expenses and other Front-End Fees, other than Acquisition Fees. Repayment of the principal amount of the Front-End Fees loan is subordinated to payment to the
Limited Partners of 100% of their Original Capital Contribution from Sale or Refinancing Proceeds (as defined in the Partnership Agreement). In the event that the Front-End Fees loan is not repaid, such amount will be reclassed to Partners
Capital. Pursuant to a modification of this loan agreement, the loan is not subject to any interest expense for the periods presented.



5



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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Reference is
made to the Partnerships Annual Report for the year ended December 31, 2002 for a discussion of the Partnerships business.



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



One of the Partnerships objectives is to dispose of its properties when market conditions allow for the achievement of the maximum possible sales price. The Partnership, in addition to being in the operation of properties
phase, 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 and dispositions. Components of
the Partnerships operating results are generally expected to decline as real property interests are sold or disposed of since the Partnership no longer realizes income and incurs expenses from such real property interests. The FASB issued
Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long Lived Assets. Statement 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The standard was
adopted in 2002, as management has committed to disposing of its remaining real estate asset. Marquette Mall and Office Buildings (Marquette) operations have been disclosed as discontinued operations for each period presented as
follows:



|                        |  | For the quarterended September 30, |         | For the nine monthsended September 30,
|----------------------- |  | ---------------------------------- | ------- | --------------------------------------
|                        |  | 2003                               |         | 2002                                  
|                       
|Income                  |  | $                                  | 822,200 |                                       
|Expenses                |  |                                    | 578,500 |                                       
|                       
|Discontinued Operations |  | $                                  | 243,700 |                                       
|                       



Operations



The table below is a recap of certain operating results of Marquette for the quarters and nine months
ended September 30, 2003 and 2002, included in discontinued operations. The discussion following the table should be read in conjunction with the financial statements and notes thereto appearing in this report.



|                                   |  | Comparative Operating Results (a)
|---------------------------------- |  | ---------------------------------
|                                   |  | For the Quarters
Ended           
|                                   |  | 9/30/2003                        
|                                  
|Marquette Mall and Office Building |  |                                  
|Rental revenues                    |  | $                                
|                                  
|Property net income                |  | $                                
|                                  
|Average occupancy                  |  |                                  
|                                  



|(a) | Excludes certain income and expense items which are either not directly related to individual property operating results such as interest income, interest expense on the Partnerships
Front-End Fees loan and general and administrative expenses or are related to properties disposed of by the Partnership prior to the periods under comparison.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Net income for the Partnership increased by $78,800 and $311,700 for the quarter and nine months ended September 30, 2003 when compared to the quarter
and nine months ended September 30, 2002. As previously discussed, Marquette is being classified as held for sale and no further depreciation or amortization of the property is provided for in the financial statements (the quarter and nine months
depreciation effect is approximately $150,000 and $441,000, respectively). This was the primary reason for the increase in net income during the nine months ended September 30, 2003. This increase was partially offset by a slight decline in
operating results for the first nine months of 2003 versus the same period in 2002.



The
following comparative discussion includes only the operating results of Marquette.



Rental revenues remained relatively unchanged for the quarter ended September 30, 2003 when compared to the quarter ended September 30, 2002 and decreased by $56,200 or 2.2% for the nine months ended September 30, 2003 when compared to the
nine months ended September 30, 2002. The decrease was primarily due to a decrease in common area expense and utility reimbursements due from tenants. Occupancy at Marquette has remained relatively stable, however, the leases and short term licenses
that have been signed to extend or renew existing tenants have not been on as favorable terms as the previous leases.



Property operating expenses decreased by $90,000 or 13.5% and $397,500 or 17.9% for the quarter and nine months ended September 30, 2003 when compared to the quarter and nine
months ended September 30, 2002. The decrease was primarily due to the decrease in depreciation expense as previously discussed.



Insurance expense increased by $12,800 or 51.4% and increased by $24,800 or 29.3% for the quarter and nine months ended September 30, 2003 when compared to the quarter and nine
months ended September 30, 2002. The



6



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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS



increase was due to an increase in property and liability insurance costs.



All other expenses remained relatively unchanged for the periods under comparison.



To increase and/or maintain occupancy levels at the Partnerships remaining property, the General Partner, through its asset and property management groups, continues to take
the following actions: 1) implementation of marketing programs, including hiring of third-party leasing agents or providing on-site leasing personnel, advertising, direct mail campaigns and development of property brochures; 2) early renewal of
existing tenants leases and addressing any expansion needs these tenants may have; 3) networking with national level retailers; 4) cold-calling other businesses and tenants in the market area; and 5) providing rental concessions or
competitively pricing rental rates depending on market conditions.



Liquidity and
Capital Resources

One of the Partnerships objectives is to dispose of its property when market conditions allow for the achievement of the maximum possible
sales price. In the interim, the Partnership continues to manage and maintain its remaining property. Notwithstanding the Partnerships intention relative to property sales, another primary objective of the Partnership is to provide cash
distributions to Partners from Partnership operations. To the extent cumulative cash distributions exceed net income, such excess distributions will be treated as a return of capital. Cash Flow (as defined in the Partnership Agreement) is generally
not equal to net income or cash flows (primarily from operating activities) as determined by accounting principles generally accepted in the United States (GAAP), since certain items are treated differently under the Partnership
Agreement than under GAAP. Management believes that to facilitate a clear understanding of the Partnerships operations, an analysis of Cash Flow (as defined in the Partnership Agreement) should be examined in conjunction with an analysis of
net income or cash flows as determined by GAAP. Management believes the primary users of the financial statements are limited partners who are most concerned with this performance measure. The following table includes a reconciliation of Cash Flow
(as defined in the Partnership Agreement) to cash flow provided by operating activities as determined by GAAP. Such amounts are not indicative of actual distributions to Partners and should not be considered as an alternative to the results
disclosed in the Statements of Income and Expenses and Statements of Cash Flows.



|                                                    |  | Comparative Cash Flow ResultsFor the Nine Months Ended |         
|--------------------------------------------------- |  | ------------------------------------------------------ | --------
|                                                    |  | 9/30/2003                                              |         
|                                                   
|Cash Flow (as defined in the Partnership Agreement) |  | $                                                      | 597,100 
|Items of reconciliation:                            |  |                                                        |         
|(Increase) decrease in current assets               |  |                                                        | (95,900 
|Increase in current liabilities                     |  |                                                        | 381,600 
|                                                   
|Net cash provided by operating activities (GAAP)    |  | $                                                      | 882,800 
|                                                   
|Net cash (used for) investing activities (GAAP)     |  | $                                                      | (262,300
|                                                   
|Net cash (used for) financing activities (GAAP)     |  | $                                                      | (694,300
|                                                   



Cash Flow (as defined in the Partnership
Agreement) decreased by $122,600 for the nine months ended September 30, 2003 when compared to the nine months ended September 30, 2002. The decrease was primarily due to the decrease in common area expense and utility reimbursements due from the
tenants as well as the increase in insurance costs.



The net decrease in the
Partnerships cash position of $73,800 for the nine months ended September 30, 2003 was due to distributions to Limited Partners and payments for building and tenant improvements and leasing commissions exceeding the net cash provided by
operating activities. Liquid assets of the Partnership as of September 30, 2003 were comprised of amounts held for working capital purposes.



Net cash provided by operating activities decreased by $224,900 for the nine months ended September 30, 2003 when compared to the nine months ended September 30, 2002. The decrease
was primarily due to the payment of current liabilities of the Partnership and the decrease in net income as previously discussed.



Net cash used for investing activities decreased by $142,100 for the nine months ended September 30, 2003 when compared to the nine months ended September 30, 2002. The decrease
was due to a reduction in expenditures for building and tenant improvements and leasing commissions.



The Partnership maintains working capital reserves to pay for capital expenditures such as building and tenant improvements and leasing costs. During the nine months ended September 30, 2003, the Partnership spent $262,300 for
building and tenant improvements and leasing costs and has projected to spend approximately $7,300 during the remainder of 2003. Actual amounts expended may vary depending on a number of factors including actual leasing activity, results of property
operations and other market conditions throughout the year. The General Partner believes that these improvements and leasing costs are necessary in order to increase and/or maintain occupancy levels in a very competitive market, maximize rental
rates charged to new and renewing tenants and to prepare the remaining property for eventual disposition.



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



Pursuant to a modification of the Partnerships Front-End Fees loan agreement, the Affiliate of the General Partner has elected to waive the Partnerships obligation for
all deferred interest on this loan and charge no interest in the future.



Distributions
to Limited Partners for the three months ended September 30, 2003 were declared in the amount of $230,500 or $4.00 per Unit. Cash distributions are made 60 days after the last day of each fiscal quarter. The amount of future distributions to Limited
Partners will ultimately be dependent upon the performance of Marquette as well as the General Partners determination of the amount of cash necessary to supplement working capital reserves to meet future liquidity requirements of the
Partnership. Accordingly, there can be no assurance as to the amounts of cash for future distributions to Limited Partners.



Based upon the current estimated value of its assets, net of its outstanding liabilities, together with its expected operating results and capital expenditure requirements, the
General Partner believes that the Partnerships cumulative distributions to its Limited Partners from inception through the termination of the Partnership will be substantially less than such Limited Partners Original Capital
Contribution.



7



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ITEM 4. CONTROLS AND PROCEDURES



Evaluation of Disclosure Controls and Procedures

The principal executive officer of the
General Partner, Donald J. Liebentritt, and the principal financial officer of the General Partner, Philip Tinkler, evaluated as of September 30, 2003 the effectiveness of the design and operation of the Partnerships disclosure controls and
other procedures that are designed to ensure that information required to be disclosed in the reports that the Partnership files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time
periods specified in the SECs rules and forms. As a result of this evaluation, these executive officers have concluded that, as of such date, the design and operation of the Partnerships disclosure controls and procedures were effective.



Changes in Internal Controls over Financial Reporting

There were no changes in the Partnerships internal controls over financial reporting identified in connection with the evaluation referred to above that have materially
affected, or are reasonably likely to materially affect, the Partnerships internal controls over financial reporting.





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PART II. OTHER INFORMATION



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



(a) Exhibits:



31.1: Certification of Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).



31.2: Certification of Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the
Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).



32.1: Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(filed herewith).



(b) Reports on Form 8-K:



There were no reports filed on Form 8-K for the quarter ended September 30, 2003.



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SIGNATURES



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



|                        |  |  |  | FIRST CAPITAL INCOME PROPERTIES, LTD.SERIES XI
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|Date: November 12, 2003 |  |  |  | By:                                            
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|Date: November 12, 2003 |  |  |  | By:                                            
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