<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549
                                  ___________
                                       
                                   FORM 10-Q


 (Mark One)
[X]    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
       Exchange Act Of 1934 
       For the quarterly period ended MARCH 31, 1998; 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 1-8383



                            MISSION WEST PROPERTIES
            (Exact name of registrant as specified in its charter)

          CALIFORNIA                                      95-2635431
-------------------------------                     ----------------------
(STATE OR OTHER JURISDICTION OF                        (I.R.S. EMPLOYER
 INCORPORATION OR ORGANIZATION)                     IDENTIFICATION NUMBER)


                              10050 BANDLEY DRIVE
                       CUPERTINO, CALIFORNIA 95014-2188
                   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

     Registrant's telephone number, including area code is (408) 725-0700
                                  ___________

          Securities registered pursuant to Section 12(b) of the Act:

    Title of Each Class           Name of Each Exchange on Which Registered
    -------------------           -----------------------------------------
    Common, no par value                   American Stock Exchange
                                        Pacific Exchange, Incorporated

          Securities registered pursuant to Section 12(g) of the Act:

                                     None
                                       
                                  ___________


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.

        (1) Yes  X      No                 (2) Yes  X      No
                ----       ----                    ----        ----

Indicate the number of shares outstanding of each of the issuer's classes of 
common stock, as of the latest practicable date.

   Common Stock no par value                    1,698,536 shares
   -------------------------              -----------------------------
            (Class)                       (Outstanding at May 11, 1998)
                                       
                                      -1-
<PAGE>

                            MISSION WEST PROPERTIES
                                       
                                   FORM 10-Q
                     FOR THE QUARTER ENDED MARCH 31, 1998
                                       
                                       
                                       
                                       
                                     INDEX

<TABLE>
<CAPTION>
                                                                 PAGE
                                                                 ----
<S>                                                               <C>
PART I   FINANCIAL INFORMATION

 Item 1  Financial Statements:

         Consolidated Balance Sheets as of
         March 31, 1998 and December 31, 1997 .................   3

         Consolidated Statements of Operations
         for the three months ended March 31, 1998 and 1997 ...   4

         Consolidated Statements of Cash Flows
         for the three months ended March 31, 1998 and 1997 ...   5

         Notes to Consolidated Financial Statements ...........   6

 Item 2  Management's Discussion and Analysis of Financial
         Condition and Results of Operations ..................   7


PART II  OTHER INFORMATION
 
 Item 5  Other Information ....................................   9

 Item 6  Exhibits and Reports on Form 8-K .....................   9


SIGNATURES ....................................................  10
</TABLE>


                                      -2-
<PAGE>

-----------------------------------------------------------------------------
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Part I - Financial Information

ITEM 1
CONSOLIDATED FINANCIAL STATEMENTS

                            MISSION WEST PROPERTIES

                          CONSOLIDATED BALANCE SHEETS
                                (in thousands)
                                     _____

<TABLE>
<CAPTION>
                                                    March 31, 1998   December 31, 1997
                                                    --------------   -----------------
                                                      (Unaudited)
<S>                                                     <C>              <C>
                     ASSETS
Cash and cash equivalents                               $  5,153         $  5,569
Other assets                                                 329              194
                                                        --------         --------

   Total assets                                         $  5,482         $  5,763
                                                        --------         --------
                                                        --------         --------

      LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
 Accounts payable and accrued expenses                  $    435         $    552
                                                        --------         --------
   Total liabilities                                         435              552
                                                        --------         --------

Stockholders' equity:
 Common stock, no par value, 200,000,000 shares
  authorized 1,698,536 and 1,501,104 shares issued
  and outstanding at March 31, 1998 and December 31,
  1997, respectively                                      27,596           26,707
 Less, amounts receivable on private placement            (1,234)            (334)
                                                        --------         --------
                                                          26,362           26,373
 Accumulated deficit                                     (21,315)         (21,162)
                                                        --------         --------
   Total shareholders' equity                              5,047            5,211
                                                        --------         --------

   Total liabilities and shareholders' equity           $  5,482         $  5,763
                                                        --------         --------
                                                        --------         --------
</TABLE>
                                       
            The accompanying notes are an integral part of these 
                condensed consolidated financial statements.


                                       -3-
<PAGE>

                            MISSION WEST PROPERTIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                   (in thousands, except per share amounts)
                                  (unaudited)
                                     _____
                                       
<TABLE>
<CAPTION>
                                                     Three months ended March 31,
                                                     ----------------------------
                                                          1998           1997
                                                     -------------   ------------
<S>                                                     <C>             <C>
Revenue:
  Rental revenues from real estate                                      $   642
  Other income, including interest                      $      77           131
                                                        ---------       -------
                                                               77           773
                                                        ---------       -------

Expenses:
  Operating expenses of real estate                             -            95
  Depreciation of real estate                                   -           115
  General and administrative                                  230           248
  Interest                                                      -           178
                                                        ---------       -------
    Total expenses                                            230           636
                                                        ---------       -------

(Loss)/income before gain on sale of real estate
 and income taxes                                            (153)          137
Gain on sale of real estate                                     -         4,849
                                                        ---------       -------
(Loss)/income before income taxes                            (153)        4,986
Benefit/(provision) for income taxes                            -        (1,651)
                                                        ---------       -------
Net (loss)/income                                       $    (153)      $ 3,335
                                                        ---------       -------
                                                        ---------       -------
Basic net (loss)/income per share                       $   (0.10)      $ 68.73
Diluted net (loss)/income per share                     $   (0.10)      $ 68.73
                                                        ---------       -------
                                                        ---------       -------
Weighted average number of common shares                1,503,933        48,524
                                                        ---------       -------
                                                        ---------       -------
</TABLE>


           The accompanying notes are an integral part of these 
                 condensed consolidated financial statements.


                                       -4-
<PAGE>

                            MISSION WEST PROPERTIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                   (in thousands, except per share amounts)
                                  (unaudited)
                                     _____

<TABLE>
<CAPTION>
                                                         Three months ended March 31,
                                                         ----------------------------
                                                             1998            1997
                                                         -----------      -----------
<S>                                                        <C>            <C>
Cash flows from operating activities:
  Net (loss)/income                                         $ (153)       $  3,335
  Adjustments to reconcile net income to net cash
    Used in operating activities:
      Net gain on sale of real estate assets                     -          (4,849)
      Depreciation                                               -             115
      Changes in assets and liabilities:                         -
        Net real estate investments                              -             402
        Other assets                                          (135)            599
        Accounts payable and accrued expenses                 (117)              3
                                                            ------        --------
          Net cash used in operating activities               (405)           (395)
                                                            ------        --------

Cash flows from investing activities:
  Net proceeds from sales of real estate                         -          43,518
                                                            ------        --------
    Net cash provided by investing activities                    -          43,518
                                                            ------        --------

Cash flows from financing activities:
  Principal payments on mortgage notes payable                   -         (30,753)
  Proceeds from stock options exercised                          -             759
  Repurchase of common stock                                   (11)              -
  Dividends paid                                                 -         (13,798)
                                                            ------        --------
    Net cash used in financing activities                      (11)        (43,792)
                                                            ------        --------

    Net decrease in cash and cash equivalents                 (416)           (669)
Cash and cash equivalents, beginning                         5,569           3,164
                                                            ------        --------

Cash and cash equivalents, ending                           $5,153        $  2,495
                                                            ------        --------
                                                            ------        --------

Supplemental information:
  Cash paid for interest                                    $    -        $    425
                                                            ------        --------
                                                            ------        --------
  Cash paid for income taxes                                $  115        $    219
                                                            ------        --------
                                                            ------        --------

Supplemental schedule of non-cash investing and
 financing activities:
  Note receivable in connection with the issuance
   of Common Stock                                          $  900        $      -
                                                            ------        --------
                                                            ------        --------
</TABLE>
                                       
                                       
               The accompanying notes are an integral part of these 
                   condensed consolidated financial statements.


                                      -5-
<PAGE>

                            MISSION WEST PROPERTIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (in thousands, except per share amounts)
                                  (unaudited)
                                     _____
1.   BASIS OF PRESENTATION

The accompanying consolidated financial statements have been prepared in 
accordance with generally accepted accounting principles applicable to 
interim financial information and pursuant to the rules and regulations of 
the Securities and Exchange Commission. Accordingly, certain information and 
footnote disclosures normally included in financial statements prepared in 
accordance with generally accepted accounting principles have been condensed 
or omitted pursuant to such rules and regulations. However, in the opinion of 
management, all adjustments, consisting only of normal recurring adjustments, 
necessary for a fair presentation have been included. The Company presumes 
that users of the interim financial information herein have read or have 
access to the audited financial statements for the preceding fiscal year and 
that the adequacy of additional disclosure needed for a fair presentation may 
be determined in that context. Accordingly, footnote disclosure which would 
substantially duplicate the disclosure contained in the Company's 1997 Annual 
Report on Form 10-K has been omitted.

2.   ISSUANCE OF COMMON STOCK

On March 30, 1998, the Company issued 200,000 shares of common stock at $4.50 
per share to an executive officer of the Company in exchange for a $900,000 
note receivable payable to the Company.  The note is a full recourse 
promissory note bearing interest at 5.59% and is secured by a pledge of the 
shares. Interest is payable annually and principal is due March 30, 2003.

3.   NET INCOME PER SHARE

The computation of net income per share is based on the weighted average 
number of common shares outstanding during the period.  Common stock options 
have not been included in the computation since their inclusion would have no 
effect on net income per share.

4.   INCOME TAXES

The Company intends to qualify and elect to be taxed as a real estate 
investment trust under the Internal Revenue Code of 1986, as amended, 
commencing with the taxable year ending December 31, 1998.  Accordingly, no 
provision has been made for federal income taxes for the three months ended 
March 31, 1998.

5.   RECENT ACCOUNTING PRONOUNCEMENTS

STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO.130, "REPORTING COMPREHENSIVE 
INCOME"

In June 1997, the Financial Accounting Standards Board issued Statement of 
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" 
(SFAS 130).  SFAS 130 establishes standards for reporting and display of 
comprehensive income and its components in a full set of general-purpose 
financial statements.  Comprehensive income is defined as "the change in 
equity of a business enterprise during a period from transactions and other 
events and circumstances from nonowner sources.  It includes all changes in 
equity during a period except those resulting from investments by owners and 
distributions to owners."  SFAS 130 is effective for fiscal years beginning 
after December 15, 1997, and reclassification of financial statements for 
earlier periods provided for comparative purposes is required.  There were no 
material items that would have impacted the Company's financial position, 
results of operations, or cash flows.

STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO.131, "DISCLOSURES ABOUT 
SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION"

In June 1997, the Financial Accounting Standards Board issued Statement of 
Financial Accounting Standards No. 131, "Disclosures about Segments of an 
Enterprise and Related Information" (SFAS 131).  SFAS 131 establishes 
standards for the way that public business enterprises report information 
about operating segments in annual financial statements and requires that 
those enterprises report selected information about operating segments in 
interim financial reports issued to shareholders.  SFAS 131 generally 
supersedes Statement of Financial Accounting Standards No. 14, "Financial 
Reporting for Segments of a Business Enterprise."  Under SFAS 131, operating 
segments are components of an enterprise about which separate financial 
information is available that is evaluated regularly by the chief operating 
decision maker in deciding how to allocate resources and in assessing 
performance.  Generally, financial information is required to be reported on 
the basis that is used internally. SFAS 131 is effective for financial 
statements for periods beginning after December 15, 1997, and restatement of 
comparative information for earlier years is required.  However, SFAS 131 is 
not required to be applied to interim financial statements in the initial 
year of application.  SFAS 131 will not have a material impact on the 
Company's financial position, results of operations or cash flows.


                                      -6-
<PAGE>

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

This Management's Discussion and Analysis of Financial Condition and Results 
of Operations should be read in conjunction with the accompanying condensed 
consolidated financial statements and notes thereto contained herein and the 
Company's consolidated financial statements and notes thereto contained in 
the Company's Annual Report on Form 10-K as of and for the year ended 
December 31, 1997.  The results for the three month period ended March 31, 
1998 are not necessarily indicative of the results to be expected for the 
entire fiscal year ending December 31, 1998.

OVERVIEW

Mission West Properties (the "Company"), with corporate offices located in 
Cupertino, California, is a California corporation that historically has been 
engaged in developing, owning, operating, and selling income-producing 
commercial real estate.

RESULTS OF OPERATIONS

COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 1998 TO THE THREE MONTHS ENDED 
MARCH 31, 1997.

During the first quarter of 1998, the Company held minimal assets, primarily 
cash and cash equivalents obtained from recent sales of common stock. 
Therefore, there was minimal operating activity during this period.  For the 
three months ended March 31, 1998, the Company recognized interest income in 
the amount of $77,000 and general and administrative costs of $230,000, 
resulting in a net loss of $153,000.

During the three months ended March 31, 1997, the Company sold nine of its 11 
real estate properties ("the nine properties").  The properties sold 
consisted of occupied office, light industrial, and R&D buildings in San 
Diego and Riverside Counties, California, and occupied industrial buildings 
and vacant land in Chandler, Arizona.  The total building space sold 
approximated 685,000 square feet.    Subsequent to March 31, 1997, the 
remaining two properties, consisting of leaseholds, together with hangar and 
office buildings, thereon, comprising approximately 25 percent of the land at 
Palomar-McClellan Airport in San Diego, California were sold.  The sale of 
the two remaining properties was completed in May 1997.

Upon completion of the sale of the nine properties, the Company received 
$47,200,000 in cash, from which it repaid all debt encumbering the properties 
(thus the elimination of all future interest expense) and paid a majority of 
the related transaction and closing costs, including $3,000,000 in "break-up" 
fees from previously terminated sales transactions.  The Company recognized a 
gain on the sale of the nine properties of $4,849,000.

The Company declared a special dividend of $9.00 per share to shareholders 
during February 1997.  That dividend represented the available portion of the 
proceeds from the sale of the nine properties.

Following the sale of the nine properties, coupled with the cash dividends 
paid to shareholders, only cash, receivables, and the two remaining 
properties were left in the Company and, therefore, the resulting corporate 
entity had insignificant revenue-generating and cash-generating capabilities 
and minimal operations, aside from interest income and general and 
administrative expenses.

CHANGES IN FINANCIAL CONDITION

There were no significant changes in financial condition during the three 
months ended March 31, 1998, except for the sale of 200,000 shares of common 
stock at $4.50 per share to an executive officer in exchange for a $900,000 
note receivable payable to the Company.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 1998, the Company's assets consisted principally of cash and 
cash equivalents obtained from sales of common stock in September and 
November 1997.  Similarly, as of March 31, 1997, the Company's assets were 
not generating cash to fund operations and active real estate operations had 
ceased.

The Company has raised capital with a view to maintaining the listing of the 
common stock on the American Stock Exchange ("AMEX") and the Pacific Stock 
Exchange ("PSE") and enabling the Company to raise more capital for the 
direct and indirect acquisition of revenue-generating real estate and other 
assets. The Company may acquire such properties and other assets through 
direct purchases or the issuance of securities of the Company in exchange for 
such properties and assets or interests in existing businesses and entities 
that own such properties and assets.  The Company may enter into such 
transactions with affiliates of Berg & Berg Enterprises, Inc. and Carl E. 
Berg, the Chairman of the Board and CEO of the Company, which own and operate 
more 


                                     -7-
<PAGE>

than 3,800,000 square feet of properties in the San Francisco Bay Area region 
commonly referred to as "Silicon Valley."  There can be no assurance that any 
such transactions will occur, however.

On September 2, 1997, the Company affected a 1 for 30 reverse split of the 
common stock and sold 1,250,000 shares of common stock at $4.50 per share 
(post-split) in a private placement to accredited investors.  The Board of 
Directors determined that $4.50 was approximately equivalent on a 
post-reverse split basis to the $0.15 per share paid by the Berg Group for 
shares of common stock in  September 1997.  Moreover, the Board of Directors 
has determined that $4.50 is an appropriate price for all transactions 
involving the common stock and common stock equivalents issued by the Company 
until such time as the Company has acquired revenue-generating properties and 
other assets, directly or indirectly, and has funds from real estate 
operations.  The ownership interests in the Company held by existing 
shareholders will be reduced substantially by any of such transactions, any 
of which may be materially dilutive to all existing shareholders of the 
Company.  If the Company does not raise additional capital or acquire 
revenue-generating real estate or other assets, the Company believes that the 
outstanding share of the common stock will cease to have value.

FORWARD LOOKING STATEMENTS

Forward-looking statements involve a number of risks and uncertainties.  Some 
of the important factors that could cause actual results to differ materially 
from those in the forward-looking statements include the following:

Future transactions intended to raise capital for the Company and result in 
the Company's conduct of a new real estate business are subject to applicable 
California and federal laws, the regulations of stock exchanges or other 
markets on which the common stock of the Company is traded, real estate 
market conditions, stock market conditions, or other factors.

In October 1997, the AMEX halted trading of the Company's common stock. 
Trading has not yet resumed.  In the absence of appropriate actions by the 
Company, there is a risk, therefore, that the Company's common stock will be 
de-listed from such exchanges and there may no longer exist a trading market 
for the common stock.

If the Company does raise sufficient capital to maintain the AMEX and PSE 
listings of the Company's common stock, but does not re-enter the real estate 
business during fiscal year 1998, the Company may become subject to the 
Investment Company Act of 1940, as amended, which would entail substantially 
more regulation of the Company at significant additional expense.

At present, approximately 73.1 percent of the outstanding common stock of the 
Company is owned by members of the Berg Group.  All such shares are subject 
to Voting Rights Agreements obligating those shareholders to vote their 
shares in the manner recommended by Berg and Berg Enterprises, Inc. and Carl 
E. Berg, who as a result, should be viewed as possessing effective control of 
the Company. There can be no assurance that such control will be exercised to 
cause the occurrence of any transaction described in the forward-looking 
statements.

If the Company does re-enter the real estate business, there can be no 
assurance that the Company's operations will be profitable.  There can be no 
assurance that the price of a share of the Company's common stock will 
increase as a result of the Company's acquisition of any real estate or other 
assets or its future revenue-generating activities, if any.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

The Company does not believe recently issued accounting standards have a 
current impact on the Company's financial statements.


                                     -8-
<PAGE>

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Part II - Other Information

ITEM 5
OTHER INFORMATION

RECENT DEVELOPMENTS

On May 15, 1998, the Company filed a Form S-4 Registration Statement with the 
Securities and Exchange Commission (the "Commission") including a Proxy 
Statement / Prospectus with respect to the Company's proposal to 
reincorporate in the State of Maryland and elect to become a real estate 
investment trust ("REIT") for federal income tax purposes for its 1998 tax 
year.  In addition, the Proxy Statement / Prospectus pertains to other 
transactions intended to effectuate the Company's desire to become actively 
engaged in the business of owning and operating real estate as a 
self-administered, self-managed and fully-integrated REIT.  The proposed 
transactions will be submitted to the Company's shareholders at a special 
meeting (the "Special Meeting") at which the shareholders will be asked to 
approve the following proposals: (1) A proposed private placement of 
6,495,058 shares of the Company's Common Stock for $4.50 per share to a group 
of accredited investors;  (2) A proposal for the Company to (i) become the 
sole general partner and acquire approximately 10.91% of the total 
partnership interests in each of four existing limited partnerships 
(collectively the "Operating Partnership") that will own approximately 4.34 
million square feet of leased commercial R&D buildings and the right to 
acquire certain commercial R&D pending building developments consisting of 
approximately 1.02 million rentable square feet (the "Pending Development 
Projects") from Carl E. Berg and certain of his affiliates, and (ii) approve 
the issuance of up to 100,825,478 shares of Common Stock issuable upon the 
redemption or exchange of 100,825,478 units of limited partnership interests 
(the "L.P. Units") held by or issuable to Carl E. Berg, certain of his 
affiliates and other limited partners in the Operating Partnerships, 
including 33,919,072 L.P. Units that may be issued upon the Operating 
Partnership's acquisition of the Pending Development Projects; and (3) A 
proposal to reincorporate the Company under the laws of the State of Maryland 
through a merger with and into the Company's wholly owned subsidiary Mission 
West Properties, Inc., a Maryland corporation ("Mission West-Maryland"), 
which during 1998 intends to elect to become a REIT and to approve the 
adoption of the charter and bylaws of Mission West-Maryland. The Company 
intends to set the date of the Special Meeting and distribute the Proxy 
Statement / Prospectus to the shareholders soon after the Commission has 
declared the S-4 Registration Statement effective.

ITEM 6
EXHIBITS AND REPORTS ON FORM 8-K

     a.   EXHIBITS

          None.

     b.   REPORTS ON FORM 8-K

          During the quarter ended March 31, 1998, the Company filed a Form 8-K
          to report under Item 4 thereof that there had been a change in the
          Company's certified accountant.  The Form 8-K was filed on March 13,
          1998.


                                        -9-
<PAGE>

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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 thereto duly authorized.

                              MISSION WEST PROPERTIES
                              (Registrant)


Date: May 15, 1998            By: /s/ Marianne K. Aguiar
                                  ------------------------------
                                   Marianne K. Aguiar
                                   Vice President of Finance and Controller
                                   (Principal Financial and Accounting Officer)


                                     -10-