<PAGE>

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

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

                                   FORM 10-Q

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

[X]
  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
  ACT OF 1934

  FOR THE PERIOD ENDED SEPTEMBER 30, 2000

                                      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                  (I.R.S. EMPLOYER
   INCORPORATION OR ORGANIZATION)                  IDENTIFICATION NO.)

     TWO NORTH RIVERSIDE PLAZA,                        60606-2607
             SUITE 600,                                (ZIP CODE)
          CHICAGO, ILLINOIS
   (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 [_]

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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<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Reference is made to the Partnership's Annual Report for the year ended
December 31, 1999 for a discussion of the Partnership's business.

Statements contained in this Management's Discussion and Analysis of Financial
Condition and Results of Operations, which are not historical facts, may be
forward-looking statements. Such statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially from those
projected. Readers are cautioned not to place undue reliance on these forward-
looking statements, which speak only as of the date hereof.

One of the Partnership's objectives is to dispose of its properties when market
conditions allow for the achievement of the maximum possible 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. Components of the Partnership's
operating results are generally expected to decline as real property interests
are sold since the Partnership no longer realizes income nor incurs expenses
from such real property interests. During 1999, the Partnership sold Burlington
Office Center I, II and III ("Burlington") and Prentice Plaza.

OPERATIONS
The table below is a recap of the Partnership's share of certain operating
results of each of its properties for the quarters and nine months ended
September 30, 2000 and 1999. The discussion following the table should be read
in conjunction with the financial statements and notes thereto appearing in
this report.

<TABLE>
<CAPTION>
                                Comparative Operating Results (a)
                                  For the                For the
                               Quarters Ended       Nine Months Ended
                            9/30/2000 9/30/1999   9/30/2000   9/30/1999
------------------------------------------------------------------------
<S>                         <C>       <C>         <C>         <C>
MARQUETTE MALL AND OFFICE BUILDING
Rental revenues             $928,900  $1,025,800  $2,907,000  $3,134,800
------------------------------------------------------------------------
Property net income (b)     $183,900  $  212,200  $  617,400  $  454,200
------------------------------------------------------------------------
Average occupancy                74%         78%         77%         80%
------------------------------------------------------------------------
PRENTICE PLAZA (50%) (D)
Rental revenues             $     --  $   52,500  $   (5,800) $  809,700
------------------------------------------------------------------------
Property net income (loss)  $     --  $    9,900  $   (5,800) $   62,100
------------------------------------------------------------------------
BURLINGTON OFFICE CENTER I, II AND III (C)
Rental revenues                   --  $  (15,000)         --  $1,120,700
------------------------------------------------------------------------
Property net (loss) income  $     --  $  (19,300) $    7,900  $  125,800
------------------------------------------------------------------------
</TABLE>
(a) Excludes certain income and expense items which are 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.
(b) Property net income for the nine-month period of 1999 excludes a gain of
    $274,500 recorded on the sale of an outparcel of land.
(c) Property net income for the nine-month period of 1999 excludes a gain of
    $5,525,100 recorded on the sale of the property.
(d) Property net income (loss) for the quarterly and nine-month periods of 1999
    excludes a gain of $4,593,000 recorded on the sale of the property.

Net income for the Partnership decreased by $4,435,600 and $9,871,100 for the
quarter and nine months ended September 30, 2000 when compared to the quarter
and nine months ended September 30, 1999, respectively. The decrease for the
quarterly periods under comparison was primarily due to the gain recorded on
the 1999 sale of Prentice. The decrease for the nine-month periods under
comparison was primarily due to the gains recorded on the sales of Burlington
Office Center I, II and III ("Burlington") and Prentice Plaza and the absence
of operating results in 2000 from the properties that were sold during 1999,
which was partially offset by improved operating results at Marquette Mall and
Office Building ("Marquette").

Net income, exclusive of the effects of the properties sold during 1999 and the
gains on the sales of Burlington, Prentice Plaza and the outparcel of land at
Marquette, decreased by $47,000 for the quarter ended September 30, 2000 when
compared to the quarter ended September 30, 1999. The decrease was primarily
due to decreased operating results at Marquette and a decrease in interest
income earned on the Partnership's short-term investments primarily resulting
from lesser average cash available for investment.

Net income, exclusive of the effects of the properties sold during 1999,
interest expense on the Loan from an Affiliate and the gains on the sales of
Burlington, Prentice Plaza and the outparcel of land at Marquette, increased by
$222,100 for the nine months ended September 30, 2000 when compared to the nine
months ended September 30, 1999. The increase was primarily due improved
operating results at Marquette and an increase in interest earned on the
Partnership's short-term investments resulting primarily from increased
interest rates earned on these investments.

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

Rental revenues decreased by $96,900 or 9.4% and $227,800 or 7.3% for the
quarter and nine months ended September 30, 2000 when compared to the quarter
and nine months ended September 30, 1999, respectively. The decrease for the
nine-month periods under comparison was primarily due to the 1999 receipt of
consideration for the early termination of a tenant's lease at Marquette. The
decrease for the quarterly periods under comparison was primarily due to a
decrease in base and percentage rental income.

Interest expense on the Partnership's mortgage loans decreased by $20,800 and
$327,300 for the quarter and nine months ended September 30, 2000 when compared
to the quarter and nine months ended September 30, 1999, respectively. The
decrease for the nine-month periods under comparison was primarily due to the
June 1999 repayment of the junior mortgage loan collateralized by Marquette.
The decreases for both comparable periods were also due to increased principal
payments on the remaining mortgage loans collateralized by Marquette.

Repair and maintenance expenses decreased by $30,200 and $60,600 for the
quarter and nine months ended September 30, 2000 when compared to the quarter
and nine months ended September 30, 1999, respectively. The decreases were
primarily due to a decrease in repairs to the exterior and interior of
Marquette.

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) promotion of local broker events
and networking with local brokers; 4) networking with national level retailers;
5) cold-calling other businesses and tenants in the market area and 6)
providing rental concessions or competitively pricing rental rates depending on
market conditions.

                                                                               2
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS--CONTINUED


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 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 as determined by generally
accepted accounting principles ("GAAP"), since certain items are treated
differently under the Partnership Agreement than under GAAP. Management
believes that to facilitate a clear understanding of the Partnership's
operations, an analysis of Cash Flow (as defined in the Partnership Agreement)
should be examined in conjunction with an analysis of net income or cash flows
as determined by GAAP. The following table includes a reconciliation of Cash
Flow (as defined in the Partnership Agreement) to cash flow provided by
operating activities as determined by GAAP. 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 Flow.

<TABLE>
<CAPTION>
                                                      Comparative Cash Flow
                                                         Results For the
                                                        Nine Months Ended
                                                      9/30/2000    9/30/1999
-------------------------------------------------------------------------------
<S>                                                  <C>          <C>
Cash Flow (as defined in the Partnership Agreement)  $   818,300  $  2,622,600
Items of reconciliation:
 Adjustment for extinguishment of deferred interest
  to Affilate                                                       (2,257,200)
 Scheduled principal payments on mortgage loans
  payable                                                369,500       670,600
 Decrease in current assets                              296,400       800,500
 (Decrease) in current liabilities                      (281,800)     (192,800)
-------------------------------------------------------------------------------
Net cash provided by operating activities            $ 1,202,400  $  1,643,700
-------------------------------------------------------------------------------
Net cash provided by investing activities            $   888,000  $ 22,227,700
-------------------------------------------------------------------------------
Net cash (used for) financing activities             $(1,082,900) $(24,048,400)
-------------------------------------------------------------------------------
</TABLE>

Cash Flow (as defined in the Partnership Agreement) decreased by $1,804,300 for
the nine months ended September 30, 2000 when compared to the nine months ended
September 30, 1999. The decrease was primarily due to the 1999 extinguishment
of deferred interest to an Affiliate. Interest expense deferred on the Front-
End Fees Loan payable to an Affiliate of the General Partner since 1996 was
considered in the computation of Cash Flow (as defined in the Partnership
Agreement). Cash Flow (as defined in the Partnership Agreement), exclusive of
the extinguishment of interest expense on the Front-End Fees Loan increased by
$452,900. The increase was primarily the result of a decrease in principal
payments on the Partnership's mortgage loan obligations together with the
increase in interest income, as previously discussed.

The net increase in the Partnership's cash position of $1,007,500 for the nine
months ended September 30, 2000 was primarily the result of the maturity of the
Partnership's investments in debt securities. The increase was also due to net
cash provided by operating activities exceeding cash distributed to Limited
Partners and payments made on the Partnership's mortgage loans payable. Liquid
assets of the Partnership as of September 30, 2000 were comprised of amounts
held for working capital purposes.

The decrease in net cash provided by operating activities for the comparable
nine-month periods of $441,300 was primarily due to the timing of the receipt
of rental income at Marquette. The decrease was also the result of the year
2000 payments of state income taxes related to 1999 taxable results.

Net cash provided by investing activities decreased by $21,339,700 for the nine
months ended September 30, 2000 when compared to the nine months ended
September 30, 1999. The decrease was primarily due to the 1999 receipt of gross
cash proceeds from the sales of Burlington and Prentice Plaza. The decrease was
partially offset by a net increase during 1999 in investments in debt
securities as opposed to a net maturity in investments in debt securities
during 2000.

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, 2000, the Partnership spent $76,200 for
capital and tenant improvements and leasing costs and has projected to spend
approximately $100,000 during the remainder of 2000. 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.

Net cash used for financing activities decreased by $22,965,500 for the nine
months ended September 30, 2000 when compared to the nine months ended
September 30, 1999. The decrease was primarily due to the 1999 repayment of
mortgage loans utilizing the proceeds from the sales of Burlington and Prentice
Plaza.

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.

The Partnership's mortgage loan outstanding is callable upon thirty days notice
from lender.

The General Partner continues to take a conservative approach to projections of
future rental income in its determination of adequate levels of cash reserves
due to the anticipated capital, tenant improvement and leasing costs. In
addition, the Partnership must maintain adequate liquidity to provide for the
repayment of its mortgage debt. The General Partner believes that Cash Flow (as
defined in the Partnership Agreement) is the best and least expensive source of
cash. As a result, cash continues to be retained to supplement working capital
reserves. For the nine months ended September 30, 2000, Cash Flow (as defined
in the Partnership Agreement) retained to supplement working capital reserves
amounted to $126,700.

Distributions to Limited Partners for the quarter ended September 30, 2000 were
declared in the amount of $230,600 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.

3
<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
BALANCE SHEETS
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                               September 30,
                                                   2000      December 31,
                                                (Unaudited)      1999
--------------------------------------------------------------------------
<S>                                            <C>           <C>
ASSETS
Investment in commercial rental property:
 Land                                           $ 1,879,500   $ 1,879,500
 Buildings and improvements                      17,432,100    17,355,900
--------------------------------------------------------------------------
                                                 19,311,600    19,235,400
 Accumulated depreciation and amortization       (8,439,600)   (8,061,300)
--------------------------------------------------------------------------
 Total investment property, net of accumulated
  depreciation and amortization                  10,872,000    11,174,100
Cash and cash equivalents                         6,574,000     5,566,500
Investments in debt securities                                    964,200
Rents receivable                                     75,000       380,300
Other assets                                         22,100        13,200
--------------------------------------------------------------------------
                                                $17,543,100   $18,098,300
--------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
 Mortgage loans payable                         $   667,500   $ 1,290,000
 Front-End Fees Loan payable to Affiliate         8,295,200     8,295,200
 Accounts payable and accrued expenses              937,900       849,200
 Due to Affiliates, net                               1,000         4,300
 Prepaid rent                                                      90,300
 Distribution payable                               230,600
 State income tax payable                            22,500       300,000
 Security deposits                                   82,200        81,600
 Other liabilities                                  112,800       112,200
--------------------------------------------------------------------------
                                                 10,349,700    11,022,800
--------------------------------------------------------------------------
Partners' capital:
 General Partner                                  1,397,300     1,389,100
 Limited Partners (57,621 Units issued and
  outstanding)                                    5,796,100     5,686,400
--------------------------------------------------------------------------
                                                  7,193,400     7,075,500
--------------------------------------------------------------------------
                                                $17,543,100   $18,098,300
--------------------------------------------------------------------------
</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the Nine Months Ended September 30, 2000 (Unaudited) and the Year Ended
December 31, 1999
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                          General      Limited
                                          Partner     Partners       Total
------------------------------------------------------------------------------
<S>                                      <C>         <C>          <C>
Partners' (deficit), January 1, 1999     $ (775,200) $         0  $  (775,200)
Net income for the year ended
 December 31, 1999                        2,141,700    8,925,800   11,067,500
Capital Adjustment, extinguishment of
 debt to Affiliate of General Partner        22,600    2,234,600    2,257,200
Distributions for the year ended
 December 31, 1999                                    (5,474,000)  (5,474,000)
------------------------------------------------------------------------------
Partners' capital, December 31, 1999      1,389,100    5,686,400    7,075,500
Net income for the nine months ended
 September 30, 2000                           8,200      801,300      809,500
Distributions for the nine months ended
 September 30, 2000                                     (691,600)    (691,600)
------------------------------------------------------------------------------
Partners' capital, September 30, 2000    $1,397,300  $ 5,796,100  $ 7,193,400
------------------------------------------------------------------------------
</TABLE>
    The accompanying notes are an integral part of the financial statements
                                                                               4
<PAGE>

STATEMENTS OF INCOME AND EXPENSES
For the Quarters Ended September 30, 2000 and 1999
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)

<TABLE>
<CAPTION>
                                                      2000       1999
------------------------------------------------------------------------
<S>                                                <C>        <C>
Income:
 Rental                                            $  928,800 $1,063,300
 Interest                                             108,500    131,300
 Gain on sale of property                                      4,593,000
------------------------------------------------------------------------
                                                    1,037,300  5,787,600
------------------------------------------------------------------------
Expenses:
 Interest                                              17,500     49,300
 Depreciation and amortization                        126,100    124,200
 Property operating:
 Affiliates                                             1,400     74,700
 Nonaffiliates                                        378,800    304,700
 Real estate taxes                                    135,900    132,900
 Insurance--Affiliate                                   7,300     23,000
 Repairs and maintenance                               84,000    151,900
 General and administrative:
 Affiliates                                             1,800      7,600
 Nonaffiliates                                         22,800     24,500
------------------------------------------------------------------------
                                                      775,600    892,800
------------------------------------------------------------------------
Income before state income tax expense                261,700  4,894,800
 State income tax expense                               7,500    205,000
------------------------------------------------------------------------
Net income                                         $  254,200 $4,689,800
------------------------------------------------------------------------
Net income allocated to General Partner            $    2,600 $  931,100
------------------------------------------------------------------------
Net income allocated to Limited Partners           $  251,600 $3,758,700
------------------------------------------------------------------------
Net income allocated to Limited Partners per Unit
 (57,621 Units outstanding)                        $     4.37 $    65.23
------------------------------------------------------------------------
</TABLE>

STATEMENTS OF INCOME AND EXPENSES
For the Nine Months Ended September 30, 2000 and 1999
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)

<TABLE>
<CAPTION>
                                                      2000       1999
-------------------------------------------------------------------------
<S>                                                <C>        <C>
Income:
 Rental                                            $2,901,200 $ 5,065,200
 Interest                                             306,700     257,200
 Gain on sales of property                                     10,392,600
-------------------------------------------------------------------------
                                                    3,2O7,900  15,715,000
-------------------------------------------------------------------------
Expenses:
 Interest:
 Affiliates                                                       290,200
 Nonaffiliates                                         63,000     849,500
 Depreciation and amortization                        378,300     748,000
 Property operating:
 Affiliates                                            11,100     145,400
 Nonaffiliates                                      1,037,900   1,223,400
 Real estate taxes                                    407,800     678,300
 Insurance--Affiliate                                  62,400      79,400
 Repairs and maintenance                              327,200     699,600
 General and administrative:
 Affiliates                                             7,600      21,500
 Nonaffiliates                                         75,800      63,400
-------------------------------------------------------------------------
                                                    2,371,100   4,798,700
-------------------------------------------------------------------------
Income before state income tax expense                836,800  10,916,300
 State income tax expense                              27,300     235,700
-------------------------------------------------------------------------
Net income                                         $  809,500 $10,680,600
-------------------------------------------------------------------------
Net income allocated to General Partner            $    8,200 $ 2,135,600
-------------------------------------------------------------------------
Net income allocated to Limited Partners           $  801,300 $ 8,545,000
-------------------------------------------------------------------------
Net income allocated to Limited Partners per Unit
 (57,621 Units outstanding)                        $    13.91 $    148.30
-------------------------------------------------------------------------
</TABLE>
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2000 and 1999
(Unaudited)
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                                          2000          1999
---------------------------------------------------------------------------------
<S>                                                    <C>          <C>
Cash flows from operating activities:
 Net income                                            $   809,500  $ 10,680,600
 Adjustments to reconcile net income to net cash
  provided by operating activities:
 Depreciation and amortization                             378,300       748,000
 (Gain) on sales of property                                         (10,392,600)
 Changes in assets and liabilities:
  Decrease in rents receivable                             305,300       556,300
  (Increase) decrease in other assets                       (8,900)      244,200
  Increase (decrease) in accounts payable and accrued
   expenses                                                 88,700      (319,900)
  (Decrease) in prepaid rent                               (90,300)
  (Decrease) increase in state income tax payable         (277,500)      195,000
  (Decrease) increase in due to Affiliates                  (3,300)       66,200
  Increase (decrease) in other liabilities                     600      (134,100)
---------------------------------------------------------------------------------
   Net cash provided by operating activities             1,202,400     1,643,700
---------------------------------------------------------------------------------
Cash flows from investing activities:
 Proceeds from sales of property                                      30,358,600
 Decrease (increase) in investments in debt
  securities, net                                          964,200    (7,842,400)
 Payments for capital and tenant improvements              (76,200)     (288,500)
---------------------------------------------------------------------------------
   Net cash provided by investing activities               888,000    22,227,700
---------------------------------------------------------------------------------
Cash flows from financing activities:
 Repayment of mortgage loans payable                                 (22,868,700)
 Principal payments on mortgage loans payable             (622,500)   (1,338,600)
 Interest deferred on Front-End Fees loan payable to
  Affiliate                                                              290,200
 Distributions paid to Partners                           (461,000)
 Increase (decrease) in security deposits                      600      (131,300)
---------------------------------------------------------------------------------
   Net cash (used for) financing activities             (1,082,900)  (24,048,400)
---------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents     1,007,500      (177,000)
Cash and cash equivalents at the beginning of the
 period                                                  5,566,500     1,160,100
---------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period     $ 6,574,000  $    983,100
---------------------------------------------------------------------------------
Supplemental information:
 Interest paid to nonaffiliates during the period      $    63,000  $    879,300
---------------------------------------------------------------------------------
</TABLE>
    The accompanying notes are an integral part of the financial statements
5
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(Unaudited)
September 30, 2000
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

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

ACCOUNTING POLICIES:
The financial statements have been prepared in accordance with 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. 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 GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

The financial information included in these financial statements is unaudited;
however, in management's opinion, all adjustments (consisting of only normal,
recurring accruals) necessary for a fair presentation of the results of
operations for the periods included have been made. Results of operations for
the quarter and nine months ended September 30, 2000 are not necessarily
indicative of the operating results for the year ending December 31, 2000.

The financial statements include the Partnership's 50% interest in a joint
venture with an Affiliated partnership. This joint venture was formed for the
purpose of acquiring a 100% interest in Prentice Plaza. This joint venture was,
until Prentice Plaza's July 1999 sale, operated under the common control of the
General Partner. Accordingly, the Partnership's pro rata share of the joint
ventures' revenues, expenses, assets, liabilities and Partners' capital is
included in the financial statements.

The financial statements include the Partnership's 70% undivided preferred
interest in a joint venture with an unaffiliated third party. The joint venture
owned a 100% interest in the Burlington Office Center I, II and III
("Burlington"). This joint venture was, until Burlington's May 1999 sale,
operated under the control of the General Partner. Accordingly, the Partnership
has included 100% of the venture's revenues, expenses, assets, liabilities and
Partners' capital in the financial statements.

The Partnership has one reportable segment as the Partnership is in the
disposition phase of its life cycle, wherein it is seeking to liquidate its
remaining operating asset. Management's focus, therefore, is to prepare its
asset for sale and find a purchaser for the remaining asset when market
conditions warrant such an action. The Partnership has one tenant who occupies
27% of the rental space at the Partnership's property.

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 its estimated useful life.
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
on the straight-line method over the life of each respective lease. Repair and
maintenance costs are expensed as incurred; expenditures for improvements are
capitalized and depreciated on the straight-line method 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.
Management was not aware of any indicator that would result in a significant
impairment loss during the periods reported.

Loan acquisition costs are amortized over the term of the mortgage loan made in
connection with the acquisition of Partnership properties or refinancing of
Partnership loans. When a property is disposed of or a loan is refinanced, the
related loan acquisition costs and accumulated amortization are removed from
the respective accounts and any unamortized balance is expensed.

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 on sale is recognized in accordance with GAAP.

Cash equivalents are considered all highly liquid investments with a 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 value. These securities had a maturity of less than one year
when purchased.

Reference is made to the Partnership's Annual Report for the year ended
December 31, 1999, for a description of other accounting policies and
additional details of the Partnership's financial condition, results of
operations, changes in Partners' (deficit) capital and changes in cash balances
for the year then ended. The details provided in the notes thereto have not
changed except as a result of normal transactions in the interim or as
otherwise disclosed herein.

2. RELATED PARTY TRANSACTIONS:

In accordance with the Partnership Agreement, 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

                                                                               6
<PAGE>

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, 2000, the General Partner was allocated Net Profits of $2,600
and $8,200, respectively. For the quarter and nine months ended September 30,
1999, the General Partner was allocated Net Profits of $900 and $2,900,
respectively. In addition, the General Partner was allocated Net Profits for
the quarter and nine months ended September 30, 1999 of $930,200 and
$2,132,700, respectively, from the sales of Partnership properties.

Fees and reimbursements paid and payable by the Partnership to Affiliates
during the quarter and nine months ended September 30, 2000 were as follows:

<TABLE>
<CAPTION>
                                                   Paid
                                              ---------------
                                                       Nine
                                              Quarter Months  Payable
---------------------------------------------------------------------
<S>                                           <C>     <C>     <C>
Asset management fees                         $1,400  $11,100   None
Reimbursement of property insurance premiums   7,300   62,400   None
Reimbursement of expenses, at cost:
 --Accounting                                     --    5,300   None
 --Investor communications                     1,100    6,000  1,000
---------------------------------------------------------------------
                                              $9,800  $84,800 $1,000
---------------------------------------------------------------------
</TABLE>

On-site property management for the Partnership's property is provided by an
independent real estate management company for fees ranging from 3% to 6% of
gross rents received by the property.

3. FRONT-END FEES LOAN PAYABLE TO AFFILIATE:

The Partnership borrowed $8,295,200 from an Affiliate of the General Partner,
an 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
(the "Subordination") 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 written off to Partners' Capital.

Pursuant to a modification of this loan agreement, beginning January 1, 1996,
the Partnership elected to defer payment of interest of the Front-End Fees
Loan. During the year ended December 31, 1999, the Affiliate of the General
Partner elected to waive the Partnership's obligation for all outstanding
deferred interest on this loan and charge no interest in the future.

4. MORTGAGE LOANS PAYABLE:

Mortgage loans payable at September 30, 2000 and December 31, 1999 consisted
of the following loans, which are non-recourse:

<TABLE>
<CAPTION>
                                    Partnership's Share
                                    of Principal Balance Average
                                             at          Interest Maturity
  Property Pledged as Collateral    9/30/2000 12/31/1999   Rate     Date
-----------------------------------------------------------------------------
<S>                                 <C>       <C>        <C>      <C>
Marquette Mall and Office Building  $667,500  $1,194,000  7.75%   7/1/2002(a)
                                       (b)        96,000
-----------------------------------------------------------------------------
                                    $667,500  $1,290,000
-----------------------------------------------------------------------------
</TABLE>

(a) Upon 30 days written notice from Lender, loan is due in full.

(b) Loan was repaid in full during the second quarter of 2000.

For additional information regarding the mortgage loans payable, see notes to
the financial statements in the Partnership's Annual Report for the year ended
December 31, 1999.
<PAGE>

PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:

(a) Exhibits: None

(b) Reports on Form 8-K:

There were no reports filed on Form 8-K during the quarter ended September 30,
2000.

8
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.

                                     FIRST CAPITAL INCOME PROPERTIES, LTD.--
                                     SERIES XI

                                     By: FIRST CAPITAL FINANCIAL CORPORATION
                                        GENERAL PARTNER

                                                 /s/ DOUGLAS CROCKER II
Date: November 14, 2000              By: ______________________________________
                                                   DOUGLAS CROCKER II
                                         PRESIDENT AND CHIEF EXECUTIVE OFFICER

                                                  /s/ NORMAN M. FIELD
Date: November 14, 2000              By: ______________________________________
                                                    NORMAN M. FIELD
                                         VICE PRESIDENT--FINANCE AND TREASURER


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