<PAGE>   1
 
                                                                    EXHIBIT 99.3
 
                          PACIFIC GULF PROPERTIES INC.
 
                               OFFER TO EXCHANGE
                          UP TO ALL OF ITS OUTSTANDING
              8.375% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2001
                   ($56,506,000 PRINCIPAL AMOUNT OUTSTANDING)
                         FOR SHARES OF ITS COMMON STOCK
 
   THE EXCHANGE OFFER WILL EXPIRE AT 5:00 NEW YORK CITY TIME, ON           ,
     1996 (AS SUCH DATE MAY BE EXTENDED, THE "EXPIRATION DATE"). DEBENTURES
      TENDERED MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
 
                                                                          , 1996
 
To Our Clients:
 
     Enclosed for your consideration are the Prospectus dated October   , 1996
(the "Prospectus") and the related Letter of Transmittal (the "Letter of
Transmittal"), which together constitute the offer (the "Exchange Offer") by
Pacific Gulf Properties Inc., a Maryland corporation (the "Company"), upon the
terms and subject to the conditions set forth in the Prospectus and the Letter
of Transmittal, to exchange not greater than 58 and not less than 55 shares of
its Common Stock, $.01 par value per share (the "Common Stock"), for each $1,000
in principal amount of its 8.375% Convertible Subordinated Debentures Due 2001
(the "Debentures"). An aggregate principal amount of $56,506,000 of Debentures
is outstanding. The Exchange Offer is conditioned on the receipt by the Company,
on or prior to the Expiration Date, of acceptances of at least $37,672,550 in
aggregate principal amount of outstanding Debentures, representing at least
66.67% of the principal amount of all outstanding Debentures; however, the
Company may waive this condition.
 
     We are the registered holder of the Debentures held for your account. The
tender of such Debentures can be made only by us as the registered holder. We
ask that you advise us whether you wish us to tender in the Exchange Offer some
or all of the Debentures held by us for your account. THE LETTERS OF TRANSMITTAL
ARE FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO
TENDER SHARES OF THE DEBENTURES HELD BY US FOR YOUR ACCOUNT.
 
     If you wish to have us tender some or all of your Debentures, please so
instruct us by completing and returning to us the instruction form set forth
below. An envelope to return your instructions is enclosed. Your instructions
should be forwarded to us as promptly as possible to permit us to submit a
tender on your behalf by the Expiration Date.
 
     THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL TENDERS BE ACCEPTED FROM
OR ON BEHALF OF, HOLDERS IN ANY JURISDICTION IN WHICH THE MAKING OF THE EXCHANGE
OFFER OR ACCEPTANCE OF SHARES OF THE COMPANY'S COMMON STOCK WOULD NOT BE IN
COMPLIANCE WITH THE LAWS OF THAT JURISDICTION. HOWEVER, THE COMPANY MAY, IN ITS
SOLE DISCRETION, TAKE SUCH ACTION AS IT MAY DEEM NECESSARY TO MAKE THE EXCHANGE
OFFER IN ANY SUCH JURISDICTION.
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               INSTRUCTIONS WITH RESPECT TO THE OFFER TO EXCHANGE
                          UP TO ALL OF THE OUTSTANDING
              8.375% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2001
                 OF PACIFIC GULF PROPERTIES INC. FOR SHARES OF
                              THE ITS COMMON STOCK
 
     The undersigned acknowledge(s) receipt of your letter and the enclosed
Prospectus dated October   , 1996 (the "Prospectus") and the accompanying Letter
of Transmittal, which together constitute the offer (the "Exchange Offer") by
Pacific Gulf Properties Inc., a Maryland corporation (the "Company"), to
exchange not greater than 58 and not less than 55 shares of its Common Stock,
$.01 par value per share (the "Common Stock"), for each $1,000 in principal
amount of its 8.375% Convertible Subordinated Debentures Due 2001 (the
"Debentures").
 
     This will instruct you to tender the number of Debentures indicated below
held by you for the account of the undersigned in exchange for shares of Common
Stock, upon the terms and subject to the conditions set forth in the Prospectus
and the accompanying Letter of Transmittal.
 
1. / / By checking this box, all Debentures held for the account of the
       undersigned will be tendered. If fewer than all such Debentures are to be
       tendered, please do not check this box but instead complete Item 2 below.
 
2. / / By checking this box, only the number and total face amount of Debentures
       specified below will be tendered:
 
<TABLE>
<S>                                                 <C>
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          Number of Debentures Tendered                  Total Face Amount of Debentures Tendered
</TABLE>
 
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      EXCHANGE RATE (IN SHARES OF COMMON STOCK PER $1,000 PRINCIPAL AMOUNT
             OF DEBENTURES) AT WHICH DEBENTURES ARE BEING TENDERED
--------------------------------------------------------------------------------
 
         CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, THERE IS
              NO VALID TENDER OF DEBENTURES. IF NO BOX IS CHECKED,
            THE TENDERED DEBENTURES WILL BE DEEMED TO BE TENDERED AT
                   55 SHARES OF COMMON STOCK FOR EACH $1,000
                        PRINCIPAL AMOUNT OF DEBENTURES.
 
<TABLE>
<S>                       <C>                       <C>                       <C>
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        / /  55                   / /  56                   / /  57                   / /  58
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</TABLE>
 
                                   SIGN HERE
 
<TABLE>
<S>                                                 <C>
       -------------------------------------              -------------------------------------
                    Signature                                     Name(s) (Please Print)


       -------------------------------------              -------------------------------------
                    Signature                                     Name(s) (Please Print)
        (If more than one account holder)
                                                          -------------------------------------
                                                                         Address

                                                           -------------------------------------
                                                                         Zip Code

                                                           -------------------------------------
                                                              Area Code and Telephone Number

                                                               Dated: ---------------, 1996
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