EXHIBIT 10.18
                                
                Bedford Property Investors, Inc.
                                
                      AMENDED AND RESTATED
                1992 DIRECTORS STOCK OPTION PLAN
                                
    (effective May 20, 1992, amended September 13, 1995 and
May 16, 1996 and amended and restated effective September 4, 1997)
 
             In order to attract and retain the services of qualified
individuals to serve as members of the Board and to secure for the
Company the benefits of the incentives inherent in increased ownership
of Common Stock by such individuals, the Company hereby authorizes
(i) grants to such individuals of Options and (ii) deferrals by such
individuals who are not employees of the Company of a portion of their
Director's Fees in accordance with the terms and conditions set forth
herein.  Any capitalized term used herein without definition in the
section where first used shall have the meaning ascribed to such term
in Section 10.

             1.   Administration.  The Administrator will be responsible
for administering the Plan.  The Administrator will have authority to
adopt such rules as it may deem appropriate to carry out the purposes
of the Plan, and shall have authority to interpret and construe the
provisions of the Plan and any agreements and notices under the Plan
and to make determinations pursuant to any Plan provision.  Each
interpretation, determination or other action made or taken by the
Administrator pursuant to the Plan shall be final and binding on all
persons.  The Administrator shall not be liable for any action or
determination made in good faith, and shall be entitled to
indemnification and reimbursement in the manner provided in the
Company's certificate of incorporation and by-laws as such documents
may be amended from time to time.

             2.   Shares Available.  Subject to the provisions of
Section 7(b) of the Plan, the maximum number of shares of Common Stock
which may be issued under the Plan shall not exceed 500,000 shares
(the "Limit").  Either authorized and unissued shares of Common Stock
or treasury shares may be delivered pursuant to the Plan.  For
purposes of determining the number of shares that remain available for
issuance under the Plan, the following rules shall apply:

             (a)  the number of outstanding Phantom Stock Units and
        shares of Common Stock underlying Options shall be charged
        against the Limit; and

             (b)  the Limit shall be increased by:

                  (i)  the number of shares subject to an Option which
        lapses, expires or is otherwise terminated without the issuance
        of such shares, 
                  (ii) the number of shares tendered to pay the
        exercise price of an Option, and 

                  (iii)     the number of shares withheld from the
        shares deliverable upon exercise of an Option or contributed by
        a Director to satisfy a Director's tax withholding obligations,
        if any.

             3.   Options.  Each Director shall receive grants of
Options under the Plan as follows:

             (a)  Option Grants.

             (i)  Initial Grant.  On the date of a Director's initial
        election or appointment to the Board, such Director (including
        any Director reelected or reappointed after a period of at least
        12 calendar months during which he did not serve on the Board)
        shall be granted, subject to Section 3(a)(iii), an Option to
        purchase 25,000 shares of Common Stock.  Such Option shall have
        a per share exercise price equal to the Fair Market Value of the
        Common Stock determined as of the date of grant and shall be
        subject to the vesting schedule provided for in Section 3(b) and
        the other terms and conditions provided for herein. 

             (ii) Annual Grants.  At each Annual Meeting during the term
        of the Plan, each individual who has continuously served as a
        Director for a period ending on the date of such Annual Meeting
        and who is reelected at such Annual Meeting or who will
        otherwise continue to serve on the Board following such Annual
        Meeting will receive, subject to Section 3(a)(iii), an Option to
        purchase 10,000 shares of Common Stock.  The Option shall have a
        per share exercise price equal to the Fair Market Value of the
        Common Stock determined as of the date of grant and shall be
        subject to the vesting schedule provided for in Section 3(b) and
        the other terms and conditions provided for herein.

             (iii)     Insufficient Shares.  If the number of shares
        underlying Options to be granted under Section 3(a)(i) or
        3(a)(ii) exceeds the Limit, each Director to be granted an
        Option at such time shall receive a pro rata grant determined by
        multiplying (A) the number of shares underlying the Option which
        the Director would have been granted at such time had the number
        of shares available for grant under the Plan been sufficient by
        (B) a fraction, the numerator of which equals the Limit at such
        time and the denominator of which equals the total number of
        shares underlying Options which all Directors would have been
        granted had the number of shares available for grant under the
        Plan been sufficient.

             (b)  Vesting Schedule of Options.  Options awarded pursuant
to the Plan shall vest and become exercisable on the date that is six
months from the date of grant (the "Vesting Date") of the Option.

             (c)  Term of Options. 

             (i)  Ten-Year Term.  Each Option shall expire ten years
        from its date of grant, subject to earlier termination as
        provided herein.

             (ii)      Exercise Following Termination of Service Due to
        Death.  If a Director ceases to be a member of the Board by
        reason of such Director's death, the Options granted to such
        Director that are then exercisable may be exercised by such
        Director's Beneficiary at any time within one year after the
        date of such termination of service, subject to the earlier
        expiration of such Options as provided for in Section 3(c)(i)
        above.  At the end of such one-year period, the exercisable
        Options shall expire.  Options that are not exercisable at the
        date of termination of service shall expire on such date.

             (iii)     Exercise Following Termination of Service Due to
        Disability.  If a Director ceases to be a member of the Board by
        reason of such Director's Disability, the Options granted to
        such Director that are then exercisable may be exercised by the
        Director at any time within one year after the date of such
        termination of service, subject to the earlier expiration of
        such Options as provided for in Section 3(c)(i) above.  At the
        end of such one-year period, the exercisable Options shall
        expire.  Options that are not exercisable at the date of
        termination of service shall expire on such date.

             (iv)      Exercise Following Other Terminations of
        Service.  If a Director ceases to be a member of the Board for
        any reason other than death or Disability, then the Director
        shall have the right, subject to the terms and conditions
        hereof, to exercise the Option, at any time within three months
        after the date of such termination, subject to the earlier
        expiration of the Option as provided for in Section 3(c)(i)
        above, but only to the extent that such Option was exercisable
        by the Director on the date of such termination of service;
        provided, however, that in the event that a Director is also an
        employee of the Company or becomes an employee upon ceasing to
        be a member of the Board, the Option shall vest and become
        exercisable in accordance with its terms and conditions and
        shall remain exercisable for a period of three months after such
        individual=s employment with the Company terminates for any
        reason.  Except as provided in the previous sentence, the
        unvested portion of the Option shall expire on the date of the
        Director's termination of service with the Board.  At the end of
        such three-month period, the exercisable Options shall expire.

             (d)  Time and Manner of Exercise of Options.

             (i)  Notice of Exercise.  Subject to the other terms and
        conditions hereof, a Director may exercise any Options, to the
        extent such Options are vested, by giving written notice of
        exercise to the Company; provided, however, that in no event
        shall an Option be exercisable for a fractional share.  The date
        of exercise of an Option shall be the later of (A) the date on
        which the Company receives such written notice and (B) the date
        on which the conditions provided in Section 3(d)(ii) are
        satisfied.
             
             (ii)      Payment.  Subject to the last sentence of this
        Section 3(d)(ii), prior to the issuance of a certificate
        pursuant to Section 3(d)(v) hereof evidencing the shares of
        Common Stock in respect of which all or a portion of an Option
        shall have been exercised, a Director shall have paid to the
        Company the exercise price of the Option for all such shares
        purchased pursuant to the exercise of such Option.  Payment may
        be made by personal check, bank draft or postal or express money
        order (such modes of payment are collectively referred to as
        "cash") payable to the order of the Company in U.S. dollars, or
        in shares of Common Stock already owned by the Director for at
        least six months at the time of exercise valued at their Fair
        Market Value as of the last business day preceding the date of
        exercise, or in a combination of cash and shares.  Payment of
        the exercise price in shares of Common Stock shall be made
        (i) by delivering to the Company the share certificate(s)
        representing the required number of shares, with the Director
        signing his or her name on the back or by attaching executed
        stock powers (the signature of the Director must be guaranteed
        in either case) or (ii) attesting to ownership of a sufficient
        number of shares of Common Stock.  In addition to the exercise
        methods described above, a Director may exercise an
        Option through a procedure whereby the Director delivers to the
        Company an irrevocable notice of exercise in exchange for the
        Company issuing the shares of Common Stock subject to the Option
        to a broker previously designated or approved by the Company,
        subject to such rules and procedures as the Administrator may
        determine (for purposes of such a transaction the value of
        shares of the Common Stock shall be deemed to equal the Fair
        Market Value of the Common Stock on the date of exercise of the
        Option).

             (iii)     Stockholder Rights.  A Director shall have no
        rights as a stockholder with respect to any shares of Common
        Stock issuable upon exercise of an Option until a certificate
        evidencing such shares shall have been issued to the Director
        pursuant to Section 3(d)(v), and no adjustment shall be made for
        dividends or distributions or other rights in respect of any
        share for which the record date is prior to the date upon which
        the Director shall become the holder of record thereof.

             (iv)      Limitation on Exercise.  No Option shall be
        exercisable unless the Common Stock subject thereto has been
        registered under the Securities Act and qualified under
        applicable state "blue sky" laws in connection with the offer
        and sale thereof, or the Company has determined that an
        exemption from registration under the Securities Act and from
        qualification under such state "blue sky" laws is available.

             (v)       Issuance of Shares.  Subject to the foregoing
        conditions and Section 3(d)(vi), as soon as reasonably
        practicable after its receipt of a proper notice of exercise and
        payment of the exercise price of the Option for the number of
        shares with respect to which the Option is exercised, the
        Company shall deliver to the Director (or following the
        Director's death, the Beneficiary entitled to exercise the
        Option), at the principal office of the Company or at such other
        location as may be acceptable to the Company and the Director
        (or such Beneficiary), one or more stock certificates for the
        appropriate number of shares of Common Stock issued in
        connection with such exercise.  Shares sold in connection with a
        broker-assisted Acashless exercise@ shall be delivered to the
        broker designated or appointed by the Company in the time and
        manner described in Section 3(d)(ii) above.  Any such shares
        shall be fully paid and nonassessable.

             (vi) Deferral of Profit Shares.  Directors may elect to
        defer receipt of shares of Common Stock otherwise deliverable
        upon exercise of an Option.  An election to defer such delivery
        shall be irrevocable and shall be made in writing on a form (the
        "Option Deferral Election Form") acceptable to the Company at
        least six months prior to exercise.  If a Director exercises an
        Option at any time after delivery of an Option Deferral Election
        Form with respect to such Option by tendering previously-owned
        shares of Common Stock, the Director's Deferred Compensation
        Account will be credited with a number of Phantom Stock Units
        equal to the number of shares of Common Stock for which delivery
        is deferred.  Phantom Stock Units shall be paid by delivery of
        shares of Common Stock in accordance with the timing and manner
        of payment elected by the Director on his or her first Deferral
        Election Form filed in accordance with Section 4, or, if no such
        election form has previously been filed by the Director, then in
        accordance with the timing and manner of payment elected by the
        Director on such Option Deferral Election Form.

             (vii)     Tax Withholding.  Where applicable, upon the
        exercise of the Option (or upon settlement of Phantom Stock
        Units), the Company shall be entitled to require as a condition
        of delivery of Common Stock that a Director remit, or, in
        appropriate cases, agree to remit when due, an amount sufficient
        to satisfy all federal, state and local withholding and
        employment tax requirements relating to such exercise.  A
        Director will be entitled to elect to have the Company withhold
        from the Common Stock to be delivered upon the exercise of the
        Option, or to elect to deliver to the Company from shares of
        Common Stock owned separately by the Director, a sufficient
        number of such shares of Common Stock to satisfy the federal,
        state and local withholding and employment tax obligations
        relating to the Director's exercise of the Option (and the
        Company's withholding obligations) to the extent, if any,
        permitted under rules and regulations adopted by the
        Administrator and in effect at the time of such exercise.  In
        such case, the Common Stock withheld or the Common Stock
        surrendered will be valued at the Fair Market Value on the date
        of exercise determined in accordance with the Plan.

             (e)  Transferability of Options.  Options may not be
transferred, pledged, assigned or otherwise disposed of except by will
or the laws of descent and distribution; provided, however, that
Options may be, with the approval of the Administrator, transferred to
a member or members of a Director's immediate family (as defined
below) or to one or more trusts or partnerships established in whole
or in part for the benefit of one or more of such immediate family
members (collectively, "Permitted Transferees"), subject to such rules
and procedures as may from time to time be adopted or imposed by the
Administrator.  If an Option is transferred to a Permitted Transferee,
it shall be further transferable only by will or the laws of descent
and distribution or, for no consideration, to another Permitted
Transferee of the Director.  A Director shall notify the Company in
writing prior to any proposed transfer of an Option to a Permitted
Transferee and shall furnish the Company, upon request, with
information concerning such Permitted Transferee's financial condition
and investment experience.  For purposes of the Plan, a Director's
"immediate family" means any child, stepchild, grandchild, spouse,
son-in-law or daughter-in-law and shall include adoptive
relationships;  provided, however, that if the Company adopts a
different definition of "immediate family" (or similar term) in
connection with the transferability of employee stock options awarded
to employees of the Company, such definition shall apply, without
further action by the Board, to the Plan.

             4.   Deferral of Director's Fees.

             (a)  Deferral Elections.

             (i)  General Provisions.  Directors may elect to defer all
        or a specified percentage of their Director's Fees with respect
        to a Deferral Period in the manner provided in this Section 4. 
        A Director's Deferred Benefit is at all times nonforfeitable.

             (ii)      Deferral Election Forms.  Before the Election
        Date applicable to a Deferral Period, each Director will be
        provided with a Deferral Election Form and a Beneficiary
        Designation Form (which may, in the discretion of the
        Administrator, be combined in one form).  In order for a
        Director to participate in the deferral portion of the Plan for
        a given Deferral Period, a Deferral Election Form, completed and
        signed by him, must be delivered to the Company on or prior to
        the applicable Election Date.  A Director electing to
        participate in the Plan for a given Deferral Period shall
        indicate on his Deferral Election Form:

                       (A)  the percentage of the Director's Fees for
             the Deferral Period to be deferred;

                  (B)  if the Deferral Election Form is the first such
             form filed by the Director, the Director's election, in
             accordance with Sections 4(f) and 4(g), as to the timing
             and manner of payment of the Deferred Benefits.  A
             Director's election as to the timing and manner of payment
             of Deferred Benefits in the initial Deferral Election Form
             shall govern the timing and manner of payment of all
             subsequent deferrals under the Plan and may not be changed
             or revoked; and 

                  (C)  whether amounts deferred for the Deferral Period
             will be credited to the Deferred Compensation Account as
             Phantom Stock Units in accordance with Section 4(b) below
             or Phantom Cash Amounts in accordance with Section 4(c)
             below.  A Director's election as to the method of crediting
             deferred amounts for a given Deferral Period may not be
             subsequently changed or revoked.  Director's Fees for a
             given Deferral Period may be deferred in part in Phantom
             Cash Amounts and in part in Phantom Stock Units.  Any such
             allocation shall be in multiples of 10% (not to exceed
             100%) of the amounts deferred. 

             (iii)     Effect of No Deferral Election.  A Director who
        does not submit a completed and signed Deferral Election Form to
        the Company on or prior to the applicable Election Date may not
        defer his Director's Fees for the Deferral Period.  However, a
        Director's Deferral Election Form filed for one Deferral Period
        shall be effective for subsequent Deferral Periods if not
        otherwise revoked by the Director.

             (b)  Establishment of Deferred Compensation Accounts.  A
Director's deferrals will be credited to a Deferred Compensation
Account set up for that Director by the Company in accordance with the
provisions of this Section 4.

             (c)  Crediting of Phantom Cash Amounts to Deferred
Compensation Accounts.  The portion of the Director's Fees that a
Director elects to defer in the form of Phantom Cash Amounts shall be
credited to the Deferred Compensation Account (i) for any cash
retainer payable to a Director, as of the last business day of the
fiscal quarter in which such amount would otherwise have been payable
to the Director and (ii) for all other Director's Fees (including, but
not limited to, fees payable for attendance at a meeting of the Board
or a committee thereof or in connection with a site inspection of
property in which the Company is contemplating making an investment),
as of the date such services are performed.  The Phantom Cash Amount
credited to the Deferred Compensation Account shall thereafter be
credited with notional interest as of the last day of each month.  The
annual rate of interest in effect for a Deferral Period shall be the
"applicable federal rate" for short-term loans with monthly
compounding, as promulgated by the Internal Revenue Service under
section 1274 of the Code for the first month in such Deferral Period.

             (d)  Crediting of Phantom Stock Units to Deferred
Compensation Accounts.
 
             (i)  Number of Phantom Stock Units.  The portion of the
        Director's Fees that a Director elects to defer in the form of
        Phantom Stock Units shall be credited to the Deferred
        Compensation Account (i) for any cash retainer payable to a
        Director, as of the last business day of the fiscal quarter in
        which such amount would otherwise have been payable to the
        Director and (ii) for all other Director's Fees (including, but
        not limited to, fees payable for attendance at a meeting of the
        Board or a committee thereof or in connection with a site
        inspection of property in which the Company is contemplating
        making an investment), as of the date such services are
        performed.  The number of Phantom Stock Units to be credited to
        the Deferred Compensation Account shall be determined by
        dividing (1) the amount of the Director's Fees deferred by
        (2) the Fair Market Value of a share of Common Stock as of the
        date of crediting.  Any partial Phantom Stock Unit that results
        from the application of the previous sentence shall be rounded
        to the nearest whole Phantom Stock Unit.

             (ii) Dividend Equivalents.  In the event that the Company
        pays any cash or other dividend or makes any other distribution
        in respect of the Common Stock, each Phantom Stock Unit credited
        to the Deferred Compensation Account of a Director will be
        credited with an additional number of Phantom Stock Units
        (including fractions thereof) determined by dividing (A) the
        amount of cash, or the value (as determined by the
        Administrator) of any securities or other property, paid or
        distributed in respect of one outstanding share of Common Stock
        by (B) the Fair Market Value of a share of Common Stock as of
        the date of such payment or distribution.  If the sum of such
        additional Phantom Stock Units (or fractions thereof) would
        cause the crediting of a partial Phantom Stock Unit, such
        partial Phantom Stock Unit shall be rounded to the nearest whole
        Phantom Stock Unit.  Such credit shall be made effective as of
        the date of the dividend or other distribution in respect of the
        Common Stock.

             (iii)     No Rights as Stockholder.  The crediting of
        Phantom Stock Units to a Director's Deferred Compensation
        Account shall not confer on the Director any rights as a
        stockholder of the Company.

             (e)  Written Statements of Account.  The Company will
furnish each Director with a statement setting forth the value of such
Director's Deferred Compensation Account as of the end of each
Deferral Period and all credits to and payments from the Deferred
Compensation Account during the Deferral Period.  Such statement will
be furnished no later than 60 days after the end of the Deferral
Period.

             (f)       Manner of Payment of Deferred Benefit.  Payment
of the portion of the Deferred Benefits under the Plan credited as
Phantom Cash Amounts shall be in cash and payment of the portion of
the Deferred Benefits credited in Phantom Stock Units shall be in
shares of Common Stock.  Payment shall be made either in a single lump
sum or in a series of five or fewer annual installments.  The amount
of each installment payment to a Director shall be determined in
accordance with the formula B/(N - P), where "B" is the total value of
the Deferred Compensation Account as of the installment calculation
date, "N" is the number of installments elected by the Director and
"P" is the number of installments previously paid to the Director.  If
a Director's Deferred Benefit is credited in part in Phantom Cash
Amounts and in part in Phantom Stock Units and the Director elects the
payment of Deferred Benefits in more than one installment, then the
formula in the previous sentence shall be applied separately with
respect to each such portion of the Deferred Compensation Account.

             (g)       Commencement of Payment of Deferred Benefit. 
Payment of a Director's Deferred Benefit shall commence as soon as
practicable (but in no event more than 60 days) after the earlier to
occur of:

             (i)  termination of service as a member of the Board or, in
        the case of a member of the Board who is also an employee of the
        Company or who becomes an employee upon such individual's
        termination of service as a member of the Board, after such
        individual's termination of service as an employee of the
        Company; or

             (ii)      the date specified in the Deferral Election Form
        executed by the Director.

             (h)       Death.  In the event of a Director's death, the
Director's entire Deferred Benefit (including any unpaid portion
thereof corresponding to installments not yet paid at the time of
death), to the extent not distributed earlier pursuant to
Section 4(g), will be distributed in a lump sum to the Director's
Beneficiary as soon as practicable after the date of death, but in no
event more than six months after the Director's date of death.

             (i)  Restrictions on Transfer.  The Company shall pay all
Deferred Benefits payable under the Plan only to the Director or
Beneficiary designated under the Plan to receive such amounts. 
Neither a Director nor his Beneficiary shall have any right to
anticipate, alienate, sell, transfer, assign, pledge, encumber or
change any benefits to which he may become entitled under the Plan,
and any attempt to do so shall be void.  A Deferred Benefit shall not
be subject to attachment, execution by levy, garnishment, or other
legal or equitable process for a Director's or Beneficiary's debts or
other obligations.

             (j)  Early Payment of Deferred Benefits.  In the event that
the Internal Revenue Service shall make a final determination that all
or a portion of a Director's Deferred Benefits are subject to ordinary
income tax prior to the scheduled date of payment of such Deferred
Benefit pursuant to the terms of this Plan and the applicable deferral
election made by the Director, such Deferred Benefits shall, to the
extent determined to be subject to current taxation, be immediately
paid to the Director.

             5.   Designation of Beneficiary.

             (a)       Beneficiary Designations.  Each Director may
designate a Beneficiary to receive any Deferred Benefit due under the
Plan or to exercise an Option upon the Director's death by executing a
Beneficiary Designation Form. 

             (b)       Change of Beneficiary Designation.  A Director
may change an earlier Beneficiary designation by executing a later
Beneficiary Designation Form and delivering it to the Administrator. 
The execution of a Beneficiary Designation Form and its receipt by the
Administrator revokes and rescinds any prior Beneficiary Designation
Form.

             6.   Change in Control.

             Anything in the Plan to the contrary notwithstanding, in
the event of a Change in Control of the Company, the following
provisions shall apply:

             (a)  Any Options outstanding as of the date such Change in
Control is determined to have occurred that are not yet exercisable
and vested on such date shall become fully exercisable and vested;
provided, however, that if the Administrator shall receive an opinion
from a nationally recognized firm of accountants to the Company that
the accelerated vesting of some or all of the Options will prohibit
the utilization of "pooling of interests" accounting in connection
with the transaction resulting in the Change in Control of the
Company, then such Options shall not become fully exercisable and
vested upon the Change in Control.

             (b)  All Deferred Benefits credited to a Director's
Deferred Compensation Account shall be paid to the Director (or to the
Director's Beneficiary if the Director dies prior to payment) on or
prior to the date of the Change in Control.  Payment of the portion of
the Deferred Benefits under the Plan credited as Phantom Cash Amounts
shall be in cash and payment of the portion of the Deferred Benefits
credited in Phantom Stock Units shall be in shares of Common Stock.

             7.   Recapitalization or Reorganization

             (a)  Authority of the Company and Stockholders.  The
existence of the Plan shall not affect or restrict in any way the
right or power of the Company or the stockholders of the Company to
make or authorize any adjustment, recapitalization, reorganization or
other change in the Company's capital structure or its business, any
merger or consolidation of the Company, any issue of stock or of
options, warrants or rights to purchase stock or of bonds, debentures,
preferred or prior preference stocks whose rights are superior to or
affect the Common Stock or the rights thereof or which are convertible
into or exchangeable for Common Stock, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part
of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.

             (b)  Change in Capitalization.  Notwithstanding any other
provision of the Plan, in the event of any change in the outstanding
Common Stock by reason of a stock dividend, recapitalization,
reorganization, merger, consolidation, stock split, combination or
exchange of shares (a "Change in Capitalization"), (i) such
proportionate adjustments as may be necessary (in the form determined
by the Administrator in its sole discretion) to reflect such change
shall be made to prevent dilution or enlargement of the rights of
Directors under the Plan with respect to the aggregate number of
shares of Common Stock authorized to be awarded under the Plan, the
number of shares of Common Stock covered by each outstanding Option
and the exercise prices in respect thereof, the number of shares of
Common Stock covered by future Option grants and the number of Phantom
Stock Units credited to a Director's Deferred Compensation Account and
(ii) the Administrator may make such other adjustments, consistent
with the foregoing, as it deems appropriate in its sole discretion.

             (c)  Dissolution or Liquidation.  In the event of the
proposed dissolution or liquidation of the Company, each outstanding
Option will vest and become exercisable on a date prior to the
consummation of the proposed action that is reasonably sufficient to
enable the Directors to exercise their Options.  All Deferred Benefits
credited to the Director's Deferred Compensation Account as of the
date of the consummation of a proposed dissolution or liquidation
shall be paid in cash to the Director or, in the event of death of the
Director prior to payment, to the Beneficiary thereof on the date of
the consummation of such proposed action.  The cash amount paid for
each Phantom Stock Unit shall be the Fair Market Value of a share of
Common Stock as of the date of the consummation of such proposed
action.

             8.   Termination and Amendment of the Plan.

             (a)  Termination.  The Plan shall terminate upon the first
to occur of (i) the adoption of a resolution of the Board terminating
the Plan or (ii) May 19, 2002 (the ATermination Date@).  Following the
Termination Date, no further grants of Options shall be made pursuant
to the Plan and no further Director's Fees may be deferred by a
Director. 

             (b)  General Power of Board.  Notwithstanding anything
herein to the contrary, the Board may at any time and from time to
time terminate, modify, suspend or amend the Plan in whole or in part;
provided, however, that no such termination, modification, suspension
or amendment shall be effective without stockholder approval if such
approval is required to comply with any applicable law or stock
exchange rule; and provided further that the Board may not, without
stockholder approval, increase the maximum number of shares issuable
under the Plan except as provided in Section 7(b) above.

             (c)  When Directors' Consents Required.  The Board may not
alter, amend, suspend, or terminate the Plan without the consent of
any Director to the extent that such action would (i) adversely affect
his or her rights with respect to Options that have previously been
granted or (ii) result in the distribution to such Director of amounts
then credited to his Deferred Compensation Account in any manner other
than as provided in the Plan or could reasonably be expected to result
in the immediate taxation to such Director of Deferred Benefits.

             9.   Miscellaneous

             (a)  No Right to Reelection.  Nothing in the Plan shall be
deemed to create any obligation on the part of the Board to nominate
any of its members for reelection by the Company's stockholders, nor
confer upon any Director the right to remain a member of the Board for
any period of time, or at any particular rate of compensation.

             (b)  Unfunded Plan.  

             (i)  Generally.  This Plan is unfunded.  Amounts payable
        under the Plan will be satisfied solely out of the general
        assets of the Company subject to the claims of the Company's
        creditors.

             (ii) Deferred Benefits.  A Deferred Benefit represents at
        all times an unfunded and unsecured contractual obligation of
        the Company and each Director or Beneficiary will be an
        unsecured creditor of the Company.  No Director, Beneficiary or
        any other person shall have any interest in any fund or in any
        specific asset of the Company by reason of any amount credited
        to him hereunder, nor shall any Director, Beneficiary or any
        other person have any right to receive any distribution under
        the Plan except as, and to the extent, expressly provided in the
        Plan.  The Company will not segregate any funds or assets for
        Deferred Benefits or issue any notes or security for the payment
        of any Deferred Benefits.  Any reserve or other asset that the
        Company may establish or acquire to assure itself of the funds
        to provide benefits under the Plan shall not serve in any way as
        security to any Director, Beneficiary or other person for the
        performance of the Company under the Plan.

             (c)  Other Compensation Arrangements.  Benefits received by
a Director pursuant to the provisions of the Plan shall not be
included in, nor have any effect on, the determination of benefits
under any other arrangement provided by the Company.

             (d)  Securities Law Restrictions.  The Administrator may
require each Director purchasing or acquiring shares of Common Stock
pursuant to the Plan to agree with the Company in writing that such
Director is acquiring the shares for investment and not with a view to
the distribution thereof.  All certificates for shares of Common Stock
delivered under the Plan shall be subject to such stock-transfer
orders and other restrictions as the Administrator may deem advisable
under the rules, regulations, and other requirements of the Securities
and Exchange Commission or any exchange upon which the Common Stock is
then listed, and any applicable federal or state securities law, and
the Administrator may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.  No
shares of Common Stock shall be issued hereunder unless the Company
shall have determined that such issuance is in compliance with, or
pursuant to an exemption from, all applicable federal and state
securities laws.

             (e)  Expenses.  The costs and expenses of administering the
Plan shall be borne by the Company.

             (f)  Governing Law.  Except as to matters of federal law,
the Plan and all actions taken thereunder shall be governed by and
construed in accordance with the laws of the State of Maryland without
giving effect to conflicts of law principles.

             10.  Definitions.

             "Administrator" means the Chief Financial Officer of the
        Company or the individual appointed by the Chief Executive
        Officer of the Company to administer the Plan.

             "Annual Meeting" means an annual meeting of the Company's
stockholders.

             "Beneficiary" or "Beneficiaries" means an individual or
        entity designated by a Director on a Beneficiary Designation
        Form to receive Deferred Benefits and to exercise Options in the
        event of the Director's death;  provided, however, that if no
        such individual or entity is designated or if no such designated
        individual is alive at the time of the Director's death,
        Beneficiary shall mean the Director's estate.

             "Beneficiary Designation Form" means a document, in a form
        approved by the Administrator to be used by Directors to name
        their respective Beneficiaries.  No Beneficiary Designation Form
        shall be effective unless it is signed by the Director and
        received by the Administrator prior to the date of death of the
        Director.

             "Board" means the Board of Directors of the Company.

             "Change in Control" shall mean the occurrence of any of the
following:
  
             (i)  any individual, partnership, firm, corporation,
        association, trust, unincorporated organization or other entity
        or person, or any syndicate or group deemed to be a person under
        Section 14(d)(2) of the Exchange Act (other than (A) AEW Capital
        Management, (B) the Company or any of its subsidiaries or (C)
        any trustee or other fiduciary holding securities under an
        employee benefit plan of the Company or of any of its
        subsidiaries), is or becomes the "beneficial owner" (as defined
        in Rule 13d-3 of the General Rules and Regulations under the
        Exchange Act), directly or indirectly, of securities of the
        Company representing 30% or more of the combined voting power of
        the Company's then outstanding securities entitled to vote in
        the election of directors of the Company;
  
             (ii) during any period of two (2) consecutive years,
        individuals who at the beginning of such period constituted the
        Board and any new directors, whose election by the Board or
        nomination for election by the Company's stockholders was
        approved by a vote of at least three-fourths (:) of the
        directors then still in office who either were directors at the
        beginning of the period or whose election or nomination for
        election was previously so approved, cease for any reason to
        constitute a majority thereof;
  
             (iii)     there occurs a reorganization, merger,
        consolidation or other corporate transaction involving the
        Company, in each case with respect to which the stockholders of
        the Company immediately prior to such transaction do not,
        immediately after such transaction, own more than 50% of the
        combined voting power of the Company or other corporation
        resulting from such transaction; or

             (iv) all or substantially all of the assets of the Company
        are sold, liquidated or distributed.

             "Code" means the Internal Revenue Code of 1986, as amended,
        and the applicable rules and regulations promulgated thereunder.

             "Common Stock" means the common stock of the Company, par
        value $0.02 per share.

             "Company" means Bedford Property Investors, Inc., a
        Maryland corporation, or any successor to substantially all of
        its business.

             "Deferral Election Form" means a document, in a form
        approved by the Administrator, pursuant to which a Director
        makes a deferral election under the Plan.

             "Deferral Period" means each calendar year.  A short
        Deferral Period under the Plan shall commence on December 9,
        1997 and end on December 31, 1997 for purposes of deferring
        Board meeting fees scheduled to be paid on December 9, 1997.  If
        an individual becomes eligible to participate in the Plan after
        the commencement of a Deferral Period, the Deferral Period for
        the individual shall be the remainder of such Deferral Period. 

             "Deferred Benefit" means an amount that will be paid on a
        deferred basis under the Plan to a Director who has made a
        deferral election.

             "Deferred Compensation Account" means the bookkeeping
        record established for each Director.  A Deferred Compensation
        Account is established only for purposes of measuring a Deferred
        Benefit and not to segregate assets or to identify assets that
        may be used to pay a Deferred Benefit.

             "Director" means a member of the Board.

             "Director's Fees" means the cash portion of (i) any
        retainer fee payable to a Director for service on the Board,
        (ii) any other fee payable for service on, or for acting as
        chairperson of, any committee of the Board, or in connection
        with a site inspection of property in which the Company is
        contemplating making an investment and (iii) any other fee or
        fees payable in respect of service on the board of directors of
        any Subsidiary or any committee of any such board of directors.

             "Disability" shall have the meaning set forth in the
        Company's long-term disability plan, regardless of whether the
        Director is a participant in such plan.
             "Effective Date" shall mean September 4, 1997.

             "Election Date" means the day immediately preceding the
        commencement of a Deferral Period.  If an individual first
        becomes eligible to participate in the Plan on an Annual Meeting
        date or after the start of a Deferral Period, the Election Date
        shall be the 30th day following such Annual Meeting date or
        initial participation date, as the case may be.  The Election
        Date for the short Deferral Period commencing on December 9,
        1997 and ending on December 31, 1997 shall be December 8, 1997.

             "Exchange Act" means the Securities Exchange Act of 1934,
        as amended, and the applicable rules and regulations promulgated
        thereunder.

             "Fair Market Value" means the value of Common Stock
        determined as follows:

             (i)  If the Common Stock is listed on the New York Stock
        Exchange or any other established stock exchange or a national
        market system (including without limitation the Nasdaq National
        Market), its Fair Market Value shall be the mean between the
        high and low sales prices for such stock or the closing bid if
        no sales were reported, as quoted on such system or exchange (or
        the exchange with the greatest volume of trading in the Common
        Stock) for the date of determination or, if the date of
        determination is not a trading day, the immediately preceding
        trading day, as reported in The Wall Street Journal or such
        other source as the Committee deems reliable.

             (ii)     If the Common Stock is regularly quoted on the Nasdaq
        system (but not on the Nasdaq National Market) or quoted by a
        recognized securities dealer but selling prices are not
        reported, its Fair Market Value shall be the mean between the
        high and low asked prices for the Common Stock on the date of
        determination or, if there are no quoted prices on the date of
        determination, on the last day on which there are quoted prices
        prior to the date of determination.

             (iii)    In the absence of an established market for the
        Common Stock, the Fair Market Value thereof shall be determined
        in good faith by the Committee.

             "Option" means an option to purchase shares of Common Stock
        awarded to a Director pursuant to the Plan.  

             "Phantom Cash Amounts" means the amounts credited to a
        Deferred Compensation Account in accordance with Section 4(c).

             "Phantom Stock Unit" means a bookkeeping unit representing
        one share of Common Stock credited to a Deferred Compensation
        Account in accordance with Section 4(d).

              "Plan" means the Bedford Property Investors, Inc. Amended
        and Restated 1992 Directors' Stock Option Plan.

             "Subsidiary" means any corporation which is a "subsidiary
        corporation" within the meaning of Section 424(f) of the Code
        with respect to the Company.

             11. Effective Date.  The amendments to the Plan set forth
herein by restatement shall be effective as of the Effective Date,
subject to the approval thereof by the stockholders of the Company by
no later than the next Annual Meeting to occur after the Effective
Date.  If such stockholder approval is not obtained on or before the
date of such Annual Meeting, all Director's Fees previously deferred
under the Plan (together with notional interest credited at the rate
described in the last sentence of Section 4(c) above) shall be paid to
the Directors in cash within ten days following the date of the Annual
Meeting and the amendments to the Plan herein shall be void ab initio.