<PAGE>


                                                                    Exhibit 10.4


                      WAIVER, AMENDMENT, AND FIRST CONSENT

              WAIVER, AMENDMENT, AND FIRST CONSENT, dated as of December 15,
1999 (this "Consent"), by and among BPP RETAIL, LLC, a Delaware limited
liability company (the "Borrower"), the Lenders (as defined in the Credit
Agreement referred to below), THE CHASE MANHATTAN BANK, as Administrative Agent
(as defined in the Credit Agreement referred to below), BURNHAM PACIFIC
EMPLOYEES LLC, a Delaware limited liability company (the "Manager"), BURNHAM
PACIFIC OPERATING PARTNERSHIP, L.P., a Delaware limited partnership ("BPOP"),
and STATE OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM, a unit of the State
and Consumer Services Agency of the State of California (the "Investor").

                                R E C I T A L S:

              The Borrower, the Lenders and the Administrative Agent entered
into a Credit Agreement dated as of June 14, 1999 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"). Unless the
context requires otherwise, capitalized terms used herein without definition
shall have the meanings ascribed to them in the Credit Agreement.

              The Borrower has informed the Lenders and the Administrative Agent
that the Investor and the Manager wish to amend the Operating Agreement in
various respects and enter into certain transactions with the Borrower,
including having the Manager exchange substantially all of its equity interest
in the Borrower for cash and certain property. The Manager would be released
from its obligation under the Operating Agreement to contribute additional
capital to the Borrower, but the Investor would increase the amount of its
obligation under the Operating Agreement to contribute additional capital to the
Borrower to at least $180,000,000.00 in cash.

              The Borrower has requested that the Lenders and the Administrative
Agent consent to such amendments and transactions and amend and waive certain
provisions of the Credit Agreement and the Member Letter signed by the Manager
and BPOP upon the terms and subject to the conditions set forth herein.

              NOW, THEREFORE, in consideration of the mutual agreements
contained in the Credit Agreement and herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

                         CONSENT, AMENDMENT, AND WAIVER

              1.1. Notwithstanding anything to the contrary contained in the
Credit Agreement or any of the other Loan Documents, upon the effectiveness of
this Consent, each of the Lenders and the Administrative Agent consents to (i)
the Manager and the Investor entering into the Second Amendment to Operating
Agreement of BPP Retail, LLC substantially in the form attached hereto as
EXHIBIT A (the "Second Amendment") and (ii) the Manager, the Investor, the
Borrower, and BPOP consummating the transactions provided for in the Second
Amendment. Without limiting the generality of the foregoing, upon the
effectiveness of this Consent, (i) the payment of the special CalPERS
Contribution referred to in Section 2(a) of the Second Amendment need not be
funded through the Subscription Account; PROVIDED that nothing contained in this
Consent shall impair or detract from the obligation of the Investor to make all
payments of the Additional Capital Contributions referred to in Section 3.12 of
the Operating Agreement to the Subscription Account, and (ii) notwithstanding
anything to the contrary


<PAGE>


contained in the Credit Agreement or any of the other Loan Documents (including
paragraphs (a), (b), (d) and (e) of the Member Letter signed by the Manager and
BPOP), the Capital Commitment and Unpaid Capital Obligation of the Manager may
be terminated; PROVIDED that the Capital Commitment and Unpaid Capital
Obligation of the Investor are increased to at least $180,000,000.00.

              1.2. Upon the effectiveness of this Consent:

                   (a) The definition of the term "Change of Control" set forth
in Section 1.01 of the Credit Agreement shall be amended by inserting the
following sentence as the last sentence of such definition: "Notwithstanding the
foregoing, a "Change of Control" shall not be deemed to have occurred in the
event that the Manager withdraws as a member and manager of the Borrower so long
as BPOP is substituted as to the Manager's interest as a member and manager
under the Operating Agreement in accordance with the terms and provisions of the
Operating Agreement."

                   (b) Notwithstanding anything to the contrary contained in the
Credit Agreement or any of the other Loan Documents, neither the consent of the
Administrative Agent or the Lenders nor the prepayment of the Obligations
pursuant to Section 2.10(b) of the Credit Agreement shall be required in the
event that the Manager withdraws as a member and manager of the Borrower so long
as (i) BPOP is substituted as to the Manager's interest as a member and manager
under the Operating Agreement in accordance with the terms and provisions of the
Operating Agreement and (ii) the documents and instruments effectuating such
transfer and withdrawal are in form and substance reasonably satisfactory to the
Administrative Agent.

                   (c) From and after the effectiveness of the Second Amendment,
(i) the references in the Member Letter signed by the Investor to the amount
"$171,000,000.00" shall refer instead to the amount "$180,000,000.00", and (ii)
clause (ii)(x) of the definition of the term "Available Borrowing Amount"
contained in Section 1.01 of the Credit Agreement shall be amended by adding the
phrase "less $9,000,000.00" immediately after the phrase "the aggregate Unpaid
Capital Obligations of the Investor" appearing therein.

              1.3. Upon the effectiveness of this Consent, the Lenders hereby
waive their right under Section 2.10(b) of the Credit Agreement to require the
Borrower to prepay the Obligations as a result of the reduction or termination
of the Manager's Capital Commitment.

                                  MISCELLANEOUS

              2.1. Each Credit Party hereby represents and warrants that:

                   (a) Its execution, delivery and performance of this Consent
(i) is within its limited liability company power, (ii) has been duly authorized
by all necessary limited liability company or other action, and (iii) does not
contravene any law, rule or regulation applicable to it or violate or create a
default under its organizational documents or any contractual provision binding
on it or affecting it or any of its property.

                   (b) This Consent constitutes its legal, valid and binding
obligation enforceable against it in accordance with its terms, except as
enforcement hereof may be subject to (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar


                                       2

<PAGE>


law affecting creditors' rights generally, and (ii) general principles of equity
(regardless of whether such enforcement is sought in a proceeding in equity or
at law).

                   (c) No Default has occurred and is continuing or would exist
immediately after giving effect to this Consent and to the transactions
contemplated hereby.

                   (d) The representations and warranties of the Credit Parties
appearing in the Loan Documents were true and correct in all material respects
as of the date when made and, after giving effect to this Consent, continue to
be true and correct in all material respects on the date hereof.

                   (e) No consent of any other Person is required in connection
with the execution, delivery and performance by the Credit Parties of this
Consent (other than any consents that have been obtained and are in full force
and effect).

                   (f) The Borrower has no offsets, defenses, claims,
counterclaims, setoffs or other basis for reduction with respect to any of the
Obligations.

              2.2. The Borrower agrees to pay on demand all reasonable costs and
expenses of the Administrative Agent in connection with or arising out of the
negotiation, preparation, execution and delivery of this Consent (including the
reasonable fees and expenses of counsel) and the consummation of the
transactions contemplated by this Consent.

              2.3. Except to the extent of the consent set forth in this
Consent, each of the Credit Agreement and the other Loan Documents is hereby
ratified and confirmed and shall continue in full force and effect. Without
limiting the generality of the foregoing, each of the Borrower and the Investor
hereby confirms that the Unpaid Capital Obligation of the Investor, after giving
effect to this Consent, to the effectiveness of the Second Amendment, and to the
making of the payment referred to in Section 2(a) of the Second Amendment, is
not less than $180,000,000.00 in cash. This Consent is effective exclusively for
the purposes set forth herein, and any additional consents or any amendment,
modification, or supplement to any Loan Document must be in writing in
accordance with the terms of the Credit Agreement or other applicable Loan
Document. A breach of any of the representations, warranties, or covenants
contained in this Consent shall constitute an Event of Default under the Credit
Agreement, entitling the Administrative Agent and the Lenders to exercise any
and all rights and remedies thereunder or available to it at law or in equity.

              2.4. This Consent sets forth the entire agreement of the parties
with respect to the subject matter hereof.

              2.5. Neither this Consent nor any provision hereof may be waived,
amended or modified except pursuant to an agreement complying with Section
9.02(b) of the Credit Agreement.

              2.6. This Consent shall be construed in accordance with and
governed by the laws of the State of New York (without giving effect to the
principles thereof relating to conflict of laws).

              2.7. This Consent shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns.


                                       3

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              2.8. This Consent may be executed in any number of counterparts
(and by different parties hereto on different counterparts), each of which shall
be deemed an original, and all of which taken together shall constitute but one
agreement. Delivery of an executed signature page of this Consent by telecopy
shall be as effective as delivery of a manually executed counterpart of this
Consent.

              2.9. The Borrower shall furnish the Administrative Agent with
prompt written notice of the effectiveness of the Second Amendment.

                                  EFFECTIVENESS

              3.1. This Consent shall not become effective until the date (the
"Effective Date") on which each of the following conditions is satisfied (or
waived in accordance with Section 9.02 of the Credit Agreement):

                   (a) The Administrative Agent shall have received from each
party hereto either (i) a counterpart of this Consent signed on behalf of such
party or (ii) written evidence satisfactory to the Administrative Agent (which
may include a telecopy transmission of a signed signature page of this Consent)
that such party has signed a counterpart of this Consent).

                   (b) The Borrower shall have executed and delivered to the
Administrative Agent a consent, waiver or amendment to the credit agreement and
loan documents under the Senior Facility, in form and substance satisfactory to
the Administrative Agent.

                   (c) The Administrative Agent shall have received such other
documents and certificates (if any) as the Administrative Agent or its counsel
may reasonably request relating to the organization, existence and good standing
of the Credit Parties and their Related Parties, the authorization of the Second
Amendment or this Consent, or the consummation of the transactions described
therein or herein, all in form reasonably satisfactory to the Administrative
Agent.

                   (d) The Borrower shall have paid (i) to the Administrative
Agent, for the account of each Lender in accordance with its respective
Applicable Percentage, a nonrefundable amendment fee in an aggregate amount
equal to $85,500.00, and (ii) to Chase, for the account of Chase or Chase
Securities Inc. ("CSI"), a nonrefundable advisory fee in the amount separately
agreed upon in writing among the Borrower, Chase, and CSI.

                   (e) The Administrative Agent shall have received a
certificate from a Responsible Officer of the Borrower confirming that, as of
the Effective Date, (i) no Default or Event of Default shall have occurred and
be continuing and (ii) all representations and warranties of the Credit Parties
appearing in the Loan Documents were true and correct in all material respects
as of the date when made and, after giving effect to this Consent, continue to
be true and correct in all material respects as of the Effective Date.

The Administrative Agent shall notify the Borrower and each of the Lenders if
and when such conditions shall have been satisfied, and such notice shall be
conclusive and binding.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK]


                                       4

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              IN WITNESS WHEREOF, the parties hereto have caused this First
Consent to be duly executed and delivered by their respective authorized
officers or other representatives as of the day and year first above written.

                             BPP RETAIL, LLC, a Delaware limited
                             liability company

                             By: BURNHAM PACIFIC EMPLOYEES LLC,
                                 a Delaware limited liability company,
                                 its manager

                                  By: BURNHAM PACIFIC OPERATING PARTNERSHIP,
                                      L.P., a Delaware limited  partnership,
                                      its manager

                                      By: BURNHAM PACIFIC PROPERTIES, INC.,
                                          a Maryland corporation, its general
                                          partner

                                          By: /s/ Scott C. Verges
                                             --------------------------------
                                             Name:  Scott C. Verges
                                             Title: Secretary

                             BURNHAM PACIFIC EMPLOYEES LLC, a Delaware
                             limited liability company

                             By: BURNHAM PACIFIC OPERATING PARTNERSHIP,
                                 L.P., a Delaware limited  partnership,
                                 its manager

                                 By: BURNHAM PACIFIC PROPERTIES, INC.,
                                     a Maryland corporation, its general
                                     partner

                                     By: /s/ Scott C. Verges
                                         --------------------------------
                                         Name:  Scott C. Verges
                                         Title: Secretary

                             BURNHAM PACIFIC OPERATING PARTNERSHIP, L.P.,
                             a Delaware limited partnership

                             By: BURNHAM PACIFIC PROPERTIES, INC., a Maryland
                                 corporation, its general partner

                                 By: /s/ Scott C. Verges
                                    ------------------------------
                                    Name:  Scott C. Verges
                                    Title: Secretary


                                       5

<PAGE>


                             STATE OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT
                             SYSTEM, a unit of the State and Consumer Services
                             Agency of the State of California

                             By: /s/ Guy Jacquier
                                 ----------------------------------------------
                                 Name:  Guy Jacquier
                                 Title: Senior Real Estate Investment Officer

                             THE CHASE MANHATTAN BANK, as a Lender
                             and as Administrative Agent

                             By: /s/ John F. Mix
                                 ----------------------------------------------
                                 Name:  John F. Mix
                                 Title: Vice President

                             ALLIED IRISH BANK, NEW YORK BRANCH,
                             as a lender

                             By: /s/ William J. Strickland
                                 ----------------------------------------------
                                 Name:  William J. Strickland
                                 Title: Executive Vice President

                             By: /s/ Germaine Reusch
                                 ----------------------------------------------
                                 Name:  Germaine Reusch
                                 Title: Vice President

                             BANCO DI NAPOLI, NEW YORK BRANCH,
                             as a Lender

                             By: /s/ Vito Spada
                                 ----------------------------------------------
                                 Name:  Vito Spada
                                 Title: Executive Vice President

                             By: /s/ Claude P. Mapes
                                 ----------------------------------------------
                                 Name:  Claude P. Mapes
                                 Title: First Vice President


                                       6

<PAGE>


                             BANCO DI SICILIA, NEW YORK BRANCH,
                             as a Lender

                             By: /s/ Carlo Cracolici
                                 ----------------------------------------------
                                 Name:  Carlo Cracolici
                                 Title: Senior Vice President & General Manager

                             By: /s/ Pierpaolo Carrubba
                                 ----------------------------------------------
                                 Name:  Pierpaolo Carrubba
                                 Title: Vice President

                             BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC.,
                             as a Lender

                             By: /s/ Peter W. Wood
                                 ----------------------------------------------
                                 Name:  Peter W. Wood
                                 Title: Vice President

                             By: /s/ Rachel L. Mena
                                 ----------------------------------------------
                                 Name:  Rachel L. Mena
                                 Title: Assistant Vice President

                             BANK OF IRELAND, as a Lender

                             By: /s/ Niamh O'Flynn
                                 ----------------------------------------------
                                 Name:  Niamh O'Flynn
                                 Title: Manager

                             BANQUE NATIONALE DE PARIS, as a Lender

                             By: /s/ William Shaheen
                                 ----------------------------------------------
                                 Name:  William Shaheen
                                 Title: Vice President

                             By: /s/ Franck P. Blua
                                 ----------------------------------------------
                                 Name:  Franck P. Blua
                                 Title: Assistant Treasurer


                                       7

<PAGE>


                             CARIPLO - CASSA DI RISPARMIO DELLE PROVINCIE
                             LOMBARDE S.p.A., GRAND CAYMAN BRANCH, as a Lender

                             By: /s/ Giancarlo Baiocchi
                                 ----------------------------------------------
                                 Name:  GianCarlo Baiocchi
                                 Title: Assistant Vice President

                             By: /s/ Maria Elena Greene
                                 ----------------------------------------------
                                 Name:  Maria Elena Greene
                                 Title: Assistant Vice President

                             DG BANK, DEUTSCHE GENOSSENSCHAFTSBANK AG, NEW YORK
                             BRANCH, as a Lender

                             By: /s/ Linda J. O'Connell
                                 ----------------------------------------------
                                 Name:  Linda J. O'Connell
                                 Title: Vice President

                             By: /s/ Michael Campto
                                 ----------------------------------------------
                                 Name:  Michael Campto
                                 Title: Assistant Vice President

                             ERSTE BANK NEW YORK BRANCH, as a Lender

                             By: /s/ Paul Judicke
                                 ----------------------------------------------
                                 Name:  Paul Judicke
                                 Title: Vice President

                             By: /s/ John S. Runnion
                                 ----------------------------------------------
                                 Name:  John S. Runnion
                                 Title: First Vice President


                                       8

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                             KBC BANK N.V., as a Lender

                             By: /s/ Patrick J. Owens
                                 ----------------------------------------------
                                 Name:  Patrick J. Owens
                                 Title: Vice President

                             By: /s/ Michael V. Curran
                                 ----------------------------------------------
                                 Name:  Michael V. Curran
                                 Title: Vice President

                             REPUBLIC NATIONAL BANK OF NEW YORK, as a Lender

                             By: /s/ Theodore Koerner
                                 ----------------------------------------------
                                 Name:  Theodore Koerner
                                 Title: First Vice President

                             By: /s/ Monisha V. Khadse
                                 ----------------------------------------------
                                 Name:  Monisha V. Khadse
                                 Title: Vice President

                             RZB FINANCE LLC, as a Lender

                             By: /s/ Dieter Beintrexler
                                 ----------------------------------------------
                                 Name:  Dieter Beintrexler
                                 Title: President

                             By: /s/ Robert E. Woods
                                 ----------------------------------------------
                                 Name:  Robert E. Woods
                                 Title: First Vice President

                             VIA BANQUE, as a Lender

                             By: /s/ C. Prot       /s/ J.F. VITTE
                                 ----------------------------------------------
                                 Name:  C. Prot        J.F. Vitte
                                 Title:


                                       9