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                                                                   EXHIBIT 99.11
    
 
                                [PAG LETTERHEAD]
 
                                                               December 11, 1996
 
Holders of Pacific Gulf Properties
8.375% Convertible Subordinated Debentures
Due 2001
 
Dear Debenture Holders:
 
     I am pleased to inform you that Pacific Gulf Properties Inc. (the
"Company") has extended the expiration date of its previously announced Exchange
Offer for up to all outstanding 8.375% Convertible Subordinated Debentures Due
2001 ("Debentures") and has modified the Exchange Offer in two important
respects:
 
   
     - SINGLE EXCHANGE RATE OF 58 SHARES OF COMMON STOCK. The Company has set a
       single exchange rate of 58 shares of Common Stock for each $1,000
       principal amount of validly tendered Debentures
    
 
   
     - WAIVER OF MINIMUM TENDER AMOUNT. The Company has waived the condition to
       the Exchange Offer that, on or prior to the Expiration Date, it shall
       have received the valid tender of at least $37,672,550 in aggregate
       principal amount of Debentures, representing 66.67% of the principal
       amount of all outstanding Debentures.
    
 
     The accompanying materials describe the modifications to the Exchange
Offer.
 
     THE EXCHANGE OFFER IS BEING MADE FOR A LIMITED TIME ONLY, AND HAS BEEN
EXTENDED TO EXPIRE (UNLESS FURTHER EXTENDED BY THE COMPANY) AT 5:00 P.M., NEW
YORK CITY TIME, ON DECEMBER 26, 1996.
 
   
THE EXCHANGE OFFER -- ECONOMIC IMPACT OF TENDERING DEBENTURE HOLDERS
    
 
   
     A comparison of the economic impact of exchanging $1,000 principal amount
of Debentures pursuant to the Exchange Offer at the exchange rate of 58 shares
of Common Stock versus retaining such Debentures is set forth below. The below
table sets forth the estimated economic impact reflecting the closing price of
the Debentures and the Common Stock as of three dates: (i) October 1, 1996, the
day prior to the initial public announcement of the Exchange Offer, (ii)
November 6, 1996, the date two days prior to the mailing of the Exchange Offer,
and (iii) December 10, 1996.
    
 
   
                          PACIFIC GULF EXCHANGE OFFER
    
 
   
<TABLE>
<CAPTION>
                                                             OCTOBER 1, 1996   NOVEMBER 6, 1996   DECEMBER 10, 1996
                                                             ---------------   ----------------   -----------------
<S>                                                          <C>               <C>                <C>
Current Market Value of Exchange Offer Shares..............      $ 1,073           $  1,124            $ 1,131
Current Market Value of $1,000 Principal Amount
  Debenture................................................      $ 1,010              1,066              1,070
ADDITIONAL VALUE TO DEBENTURE HOLDERS PURSUANT TO EXCHANGE
  OFFER....................................................      $    63           $     58            $    61
Dividend Income Per Annum on Exchange Offer Shares(1)......      $ 95.12           $  95.12            $ 95.12
Interest Income Per Annum on $1,000 Principal Amount
  Debenture................................................        83.75              83.75              83.75
ADDITIONAL INCOME TO DEBENTURE HOLDERS PURSUANT TO EXCHANGE
  OFFER....................................................      $ 11.37           $  11.37            $ 11.37
Closing Stock Price........................................      $ 18.50           $ 19.375            $ 19.50
Closing Debenture Price....................................      101.000%           106.875%           107.000%
Annual Dividend............................................      $  1.64           $   1.64            $  1.64
</TABLE>
    
 
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(1)   The dividend income per annum shown for the Common Stock issuable upon
      acceptance of the Exchange Offer represents an annualized dividend amount
      of $1.64 per share based on the most recent quarterly dividend declared by
      the Company. there is no assurance that the Company's board of Directors
      will continue to declare dividends on the Common Stock or, if declared,
      what the amount of future dividends will be. The Board of Directors voted
      on November 6, 1996 to increase the quarterly dividend on the common Stock
      from $.40 to $.41 poer share for the fourth quarter of 1996, payable on
      January 10, 1997 to all shareholders of record as of January 1, 1997.
    
 
     PLEASE NOTE: A SUCCESSFUL CONSUMMATION OF THE EXCHANGE OFFER WILL
SIGNIFICANTLY REDUCE THE PRINCIPAL AMOUNT OF OUTSTANDING DEBENTURES AND
THEREFORE IS LIKELY TO HAVE A MATERIALLY ADVERSE EFFECT ON THE LIQUIDITY OF THE
DEBENTURES. DEBENTURES REMAINING IN OUTSTANDING AFTER THE EXCHANGE OFFER MAY BE
DE-LISTED BY THE AMERICAN STOCK EXCHANGE.
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     If you have any questions about, or require assistance with the procedures,
please contact the Information Agent, D.F. King & Co., at (800) 207-2014.
 
     Thank you for your support.
 
                                      Sincerely,
 
                                      PACIFIC GULF PROPERTIES INC.
 
                                      By: Glenn L. Carpenter
                                        Chairman of the Board and
                                        Chief Executive Officer