UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   -----------

                                    Form 10-Q


             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003

                          COMMISSION FILE NUMBER 1-8383


                          Mission West Properties, Inc.
             (Exact name of registrant as specified in its charter)

           Maryland                                    95-2635431
           --------                                    ----------
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
 incorporation or organization)

                               10050 Bandley Drive
                        Cupertino, California 95014-2188
                    (Address of principal executive offices)

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


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. YES [X] NO [ ]

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2). Yes [X] No [ ]


                      APPLICABLE ONLY TO CORPORATE ISSUERS

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

                17,704,691 shares outstanding as of May 14, 2003


                                     - 1 -

<PAGE>


                          Mission West Properties, Inc.

                                    FORM 10-Q
                      FOR THE QUARTER ENDED MARCH 31, 2003
<TABLE>
<CAPTION>


                                      INDEX

                                                                                                                    PAGE
PART I        FINANCIAL INFORMATION                                                                                 ----

<S>                                                                                                                 <C>
   Item 1.    Financial Statements (unaudited):

              Consolidated Balance Sheets as of March 31, 2003
              and December 31, 2002...................................................................................3

              Consolidated Statements of Operations for the three
              months ended March 31, 2003 and 2002....................................................................4

              Consolidated Statements of Cash Flows for the
              three months ended March 31, 2003 and 2002..............................................................5

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

   Item 2.    Management's Discussion and Analysis of Financial
              Condition and Results of Operations....................................................................10

   Item 3.    Quantitative and Qualitative Disclosures About Market Risk.............................................19

   Item 4.    Controls and Procedures................................................................................19


PART II       OTHER INFORMATION

   Item 6.     Exhibits and Reports on Form 8-K......................................................................20

SIGNATURES...........................................................................................................20
</TABLE>


                                     - 2 -
<PAGE>

PART I - FINANCIAL INFORMATION
ITEM 1   CONSOLIDATED FINANCIAL STATEMENTS

                          MISSION WEST PROPERTIES, INC.
                           CONSOLIDATED BALANCE SHEETS
           (Dollars in thousands, except share and per share amounts)
                                   (Unaudited)
                                    ---------
<TABLE>
<CAPTION>

                                                                                   March 31, 2003         December 31, 2002
                                                                               ----------------------  ----------------------

                                     ASSETS
<S>                                                                                <C>                     <C>
Real estate assets, at cost
    Land                                                                            $  234,707              $  234,707
    Buildings and improvements                                                         727,135                 726,581
                                                                               ----------------------  ----------------------
       Total investments in properties                                                 961,842                 961,288
    Less accumulated depreciation                                                      (71,123)                (66,560)
                                                                               ----------------------  ----------------------
       Net investments in properties                                                   890,719                 894,728
    Investments in unconsolidated joint venture                                          2,037                       -
                                                                               ----------------------  ----------------------
    Net investments in real estate assets                                              892,756                 894,728
Cash and cash equivalents                                                                2,721                   4,479
Deferred rent                                                                           17,245                  17,001
Other assets                                                                            16,855                  13,198
                                                                               ----------------------  ----------------------
       Total assets                                                                 $  929,577              $  929,406
                                                                               ======================  ======================

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
    Line of credit (related parties)                                                $       26              $   58,792
    Revolving line of credit                                                                 -                  23,839
    Loan payable                                                                             -                  20,000
    Mortgage notes payable                                                             223,586                 125,062
    Mortgage notes payable (related parties)                                            11,001                  11,078
    Interest payable                                                                       337                     337
    Security deposits                                                                   10,398                  11,184
    Prepaid rental income                                                               13,892                   9,876
    Dividend/distribution payable                                                       24,996                  24,951
    Accounts payable and accrued expenses                                                4,819                   4,698
                                                                               ----------------------  ----------------------
       Total liabilities                                                               289,055                 289,817

Commitments and contingencies (Note 6)

Minority interests                                                                     528,288                 528,768

Stockholders' equity:
  Preferred stock, $.001 par value, 20,000,000 shares
      authorized, none issued and outstanding                                                -                       -
  Common stock, $.001 par value, 200,000,000 shares
      authorized, 17,653,691 and 17,487,329 shares issued and
      outstanding at March 31, 2003 and December 31, 2002,
      respectively                                                                          18                      17
  Paid-in-capital                                                                      129,911                 128,295
  Accumulated deficit                                                                  (17,695)                (17,491)
                                                                               ----------------------  ----------------------
     Total stockholders' equity                                                        112,234                 110,821
                                                                               ----------------------  ----------------------
     Total liabilities and stockholders' equity                                     $  929,577              $  929,406
                                                                               ======================  ======================
</TABLE>


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

                                     - 3 -
<PAGE>


                          MISSION WEST PROPERTIES, INC
                      CONSOLIDATED STATEMENTS OF OPERATIONS
           (Dollars in thousands, except share and per share amounts)
                                   (Unaudited)
                                    ---------
<TABLE>
<CAPTION>

                                                       Three months ended March 31,
                                                        2003                  2002
                                                 --------------------  --------------------
<S>                                                  <C>                    <C>
Revenues:
   Rental revenues from real estate                     $ 31,431              $ 32,484
   Tenant reimbursements                                   4,575                 5,326
   Other income, including interest                          735                   497
                                                 --------------------  --------------------
        Total revenues                                    36,741                38,307
                                                 --------------------  --------------------

Expenses:
   Operating expenses                                      1,519                 2,275
   Real estate taxes                                       3,075                 3,057
   Depreciation of real estate                             4,563                 4,356
   General and administrative                                358                   434
   Interest                                                3,406                 2,270
   Interest (related parties)                                294                 1,010
                                                 --------------------  --------------------
       Total expenses                                     13,215                13,402
                                                 --------------------  --------------------

Income before minority interests and equity in
   earnings of unconsolidated joint venture               23,526                24,905
Equity in earnings of unconsolidated
   joint venture                                             737                     -
                                                 --------------------  --------------------
Income before minority interests                          24,263                24,905
Minority interests                                        20,229                20,769
                                                 --------------------  --------------------
   Income from continuing operations                       4,034                 4,136
                                                 --------------------  --------------------

Discontinued operations, net minority interests:
Gain from disposal of discontinued operations                  -                 1,017
Income attributable to discontinued operations                 -                    48
                                                 --------------------  --------------------
   Income from discontinued operations                         -                 1,065
                                                 --------------------  --------------------

Net income to common stockholders                       $  4,034              $  5,201
                                                 ====================  ====================
Net income to minority interests                        $ 20,229              $ 26,094
                                                 ====================  ====================
Income per share from continuing operations:
   Basic                                                $0.23                 $0.24
                                                 ====================  ====================
   Diluted                                              $0.23                 $0.23
                                                 ====================  ====================
Income per share from discontinued operations:
   Basic                                                    -                 $0.06
                                                 ====================  ====================
   Diluted                                                  -                 $0.06
                                                 ====================  ====================
Net income per share to common stockholders:
   Basic                                                $0.23                 $0.30
                                                 ====================  ====================
   Diluted                                              $0.23                 $0.29
                                                 ====================  ====================
Weighted average number of shares of
  common stock outstanding (basic)                    17,637,260             17,404,568
                                                 ====================  ====================
Weighted average number of shares of
  common stock outstanding (diluted)                  17,695,001             17,853,809
                                                 ====================  ====================
</TABLE>

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

                                     - 4 -
<PAGE>


                          MISSION WEST PROPERTIES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)
                                   (Unaudited)
                                    ---------
<TABLE>
<CAPTION>

                                                                                             Three months ended March 31,
                                                                                         --------------------------------------
                                                                                               2003                2002
                                                                                         ------------------ -------------------
<S>                                                                                     <C>                <C>
Cash flows from operating activities:
     Net income                                                                          $     4,034        $     5,201
     Adjustments to reconcile net income to net cash provided by
       operating activities:
            Minority interests                                                                20,229             26,094
            Depreciation                                                                       4,563              4,402
            Gain on sales of assets                                                                -             (6,103)
            Equity in earnings of unconsolidated joint venture                                  (737)                 -
            Other                                                                                  7                (18)
     Changes in assets and liabilities:
            Distributions from unconsolidated joint venture                                      500                  -
            Deferred rent                                                                       (244)               780
            Other assets                                                                      (3,657)            (3,972)
            Security deposits                                                                   (786)               263
            Prepaid rental income                                                              4,016              1,470
            Accounts payable and accrued expenses                                                 (9)               471
                                                                                         ------------------ -------------------
     Net cash provided by operating activities                                                27,916             28,588
                                                                                         ------------------ -------------------

Cash flows from investing activities:
     Improvements to real estate assets/new equipment                                           (554)                 -
     Refundable option payment                                                                     -            (18,836)
     Real estate purchase                                                                          -            (31,311)
     Proceeds from sales of real estate                                                            -             18,591
     Restricted cash                                                                               -             15,435
     Restricted cash available                                                                     -             (2,715)
                                                                                         ------------------ -------------------
     Net cash used in investing activities                                                      (554)           (18,836)
                                                                                         ------------------ -------------------

Cash flows from financing activities:
    Principal payments on mortgage notes payable                                              (1,476)              (498)
    Proceeds from mortgage note payable                                                      100,000                  -
    Principal payments on mortgage notes payable (related parties)                               (77)               (71)
    Net payments under line of credit (related parties)                                      (58,765)            (2,298)
    Proceeds from loan payable                                                                     -             20,000
    Payment on loan payable                                                                  (20,000)                 -
    Payment on revolving line of credit                                                      (23,839)                 -
    Financing Costs                                                                                -                (52)
    Proceeds from stock options exercised                                                         42                151
    Minority interests distributions                                                         (20,808)           (20,637)
    Dividends paid                                                                            (4,197)            (4,159)
                                                                                         ------------------ -------------------
     Net cash used in financing activities                                                   (29,120)            (7,564)
                                                                                         ------------------ -------------------
     Net (decrease)/increase in cash and cash equivalents                                     (1,758)             2,188
Cash and cash equivalents, beginning                                                           4,479              5,310
                                                                                         ------------------ -------------------
Cash and cash equivalents, ending                                                        $     2,721        $     7,498
                                                                                         ================== ===================

Supplemental information:
    Cash paid for interest                                                               $     3,648        $     3,168
                                                                                         ================== ===================
Supplemental schedule of non-cash investing and financing activities:
    Debt incurred in connection with property acquisitions (related parties)             $         -        $     7,500
                                                                                         ================== ===================
    Assumption of other liabilities in connection with property acquisitions             $         -        $        12
                                                                                         ================== ===================
    Issuance of operating partnership units in connection with property acquisitions     $         -        $     6,152
                                                                                         ================== ===================
    Issuance of operating partnership units in connection with joint venture acquisition $     1,800        $         -
                                                                                         ================== ===================
</TABLE>


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

                                     - 5 -
<PAGE>


                          MISSION WEST PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      (Dollars in thousands, except per share data and per square footage)
                                   (Unaudited)
                                    ---------


1.   PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION

     The accompanying  consolidated financial statements include the accounts of
     Mission West Properties,  Inc. and its controlled  subsidiaries,  including
     the operating  partnerships (the "Company").  All significant  intercompany
     balances have been eliminated in consolidation.

     Certain prior year amounts have been reclassified to conform to the current
     year's  presentation.  There is no  impact on net  income or  stockholders'
     equity.

     Minority  interest   represents  the  separate  private  ownership  of  the
     operating  partnerships  by the Berg Group  (defined  as Carl E. Berg,  his
     brother Clyde J. Berg, members of their respective immediate families,  and
     certain entities they control) and other non-affiliate interests. In total,
     these interests account for approximately 83% of the ownership interests in
     the real estate  operations  of the Company as of March 31, 2003.  Minority
     interest in earnings  has been  calculated  by taking the net income of the
     operating   partnerships  (on  a  stand-alone   basis)  multiplied  by  the
     respective minority interest ownership percentage.

     The financial  statements  have been prepared in accordance with accounting
     principles  generally  accepted  in the United  States of America  ("GAAP")
     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 GAAP 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 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.  The results of operations
     for the three months ended March 31, 2003 are not necessarily indicative of
     the results to be expected for the entire year.

     Investments in Unconsolidated Joint Ventures.  The Company accounts for its
     investments in properties in unconsolidated joint ventures under the equity
     method of accounting as the Company exercises some influence,  but does not
     operate,  manage or control the properties.  These investments are recorded
     at  cost  and  subsequently  adjusted  for  equity  in  earnings  and  cash
     contributions  and  distributions.  On a  regular  basis,  the value of the
     Company's  investments  in  unconsolidated  joint  ventures is assessed for
     impairment. An investment is impaired only if the Company's estimate of the
     value of the investment is less than the carrying value of the  investment.
     The  impairment  amount  shall be  measured  as the excess of the  carrying
     amount of the investment over the value of the investment.

     The Company adopted  Statement of Financial  Accounting  Standards No. 144,
     "Accounting for the Impairment or Disposal of Long Lived Assets," effective
     January 1, 2002 (see note 7).

     The  Company  has  elected to be taxed as a real  estate  investment  trust
     ("REIT") under the Internal Revenue Code of 1986, as amended.  Accordingly,
     no  provision  has been made for income  taxes for the three  months  ended
     March 31, 2003.

2.   REAL ESTATE

     BERG LAND HOLDINGS OPTION AGREEMENT
     Under the terms of the Berg Land Holdings  Option  Agreement,  the Company,
     through the  operating  partnerships,  has the option to acquire any future
     Research & Development  ("R&D"),  office and industrial buildings developed
     by the Berg Group on land currently owned,  optioned, or acquired for these
     purposes in the future,  directly or indirectly  by certain  members of the
     Berg Group. At present, there are approximately 250 acres of Silicon Valley
     land,  including land under development,  owned directly or under 50% joint
     venture entities,  by certain members of the Berg Group that are subject to
     the terms of the Berg Land  Holdings  Option  Agreement.  The owners of the
     future  R&D  property  developments  may obtain  cash or, at their  option,
     operating  partnership  interests  ("O.P.  Units")  valued  at the  average
     closing  price of shares of common  stock  over the  30-trading-day  period
     preceding  the  acquisition  date.  As of March 31,  2003,  the Company had
     completed 19  acquisitions  under the Berg Land Holdings  Option  Agreement
     representing   approximately  1,864,000  rentable  square  feet.  Upon  the
     Company's  exercise of an option to purchase any of the future R&D property
     developments  under the terms of the Berg Land Holdings  Option  Agreement,
     the acquisition  price will equal the sum of (a) the full construction cost
     of the building; (b) 10% of the full construction cost of the building; (c)
     the acquisition  value of the parcel as defined in the

                                     - 6 -
<PAGE>

     agreement upon which the  improvements are constructed  (currently  ranging
     from $7.50 to $20.00 per square foot); (d) 10% per annum of the acquisition
     value of the  parcel for the  period  from  January 1, 1998 to the close of
     escrow;  and (e) interest at LIBOR (London Interbank Offer Rate) plus 1.65%
     per annum on the full  construction  costs of the  building  for the period
     from the date funds were disbursed by the developer to the close of escrow;
     less (f) any debt encumbering the property,  or a lesser amount as approved
     by the members of the  independent  directors  committee  of the  Company's
     board of directors.

     The Company has the right to acquire future  developments by the Berg Group
     on up to 250  additional  acres of land  currently  controlled  by the Berg
     Group,  which could support  approximately  3.9 million  square feet of new
     developments.  Generally,  the Company will not acquire any projects  until
     they are  fully  completed  and  leased.  Currently  the Berg  Group is not
     developing any new projects. The Berg Group is currently seeking government
     approval of a proposed  rezoning of the 160-acre  Evergreen  site to permit
     residential  development on a substantial  portion of the site. If the Berg
     Group obtains the requested rezoning, it will ask the independent directors
     committee to approve the removal of the rezoned  portions of this  property
     from the Berg Land Holdings Option Agreement.  Under the Berg Land Holdings
     Option Agreement, as long as the Berg Group's percentage ownership interest
     in the Company and the operating  partnerships taken as a whole is at least
     65%, the Company also has an option to purchase all land acquired, directly
     or indirectly, by Carl E. Berg or Clyde J. Berg in the future which has not
     been improved with completed buildings and which is zoned for, intended for
     or  appropriate  for research and  development,  office  and/or  industrial
     development or use in the states of California, Oregon and Washington.

     Although the Company expects to acquire any new properties  available to it
     under the terms of the Berg Land Holdings Option Agreement,  after approval
     by the independent directors committee,  there can be no assurance that the
     Company  actually will consummate any intended  transactions.  Furthermore,
     the Company has not yet  determined the means by which it would acquire and
     pay for any such properties or the impact of any of the acquisitions on its
     business, results of operations, financial condition, or available cash for
     distribution.

     INVESTMENT IN UNCONSOLIDATED JOINT VENTURE
     Effective  January 1, 2003, the Company  acquired a 50% interest in a joint
     venture with TBI in Morgan Hill,  California for $1,800 from the Berg Group
     under the Berg Land Holdings  Option  Agreement.  The Company  financed the
     acquisition  of its 50% interest with the issuance of 181,032 O.P. Units to
     the Berg  Group.  The joint  venture  consists of four R&D  buildings  with
     approximately  593,000 rentable square feet, which are operated and managed
     by TBI, the other partner in the joint venture.  TBI initially financed the
     properties by obtaining  mortgage loans. At December 31, 2002,  TBI's total
     mortgage  debt  on the  four  properties  was  approximately  $53,600.  The
     Company's  pro  rata  share  of debt on March  31,  2003 was  approximately
     $26,700.  This  investment is not  consolidated  because the management and
     control over significant day to day operating activities are with TBI.

3.   STOCK TRANSACTIONS

     During the three  months ended March 31,  2003,  stock  options to purchase
     9,362  shares of common  stock were  exercised  at $4.50 per  share.  Total
     proceeds to the Company were $42. Two limited  partners  exchanged  157,000
     O.P. Units for 157,000 shares of the Company's common stock under the terms
     of the December 1998 Exchange  Rights  Agreement  among the Company and all
     limited partners of the operating partnerships.

4.   NET INCOME PER SHARE

     Basic  operating net income per share is computed by dividing net income by
     the weighted  average number of common shares  outstanding  for the period.
     Diluted  operating  net income per share is computed by dividing net income
     by the sum of the weighted-average  number of common shares outstanding for
     the period plus the assumed  exercise of all dilutive  securities using the
     treasury stock method.

     The computation for weighted average shares is detailed below:
<TABLE>
<CAPTION>

                                                          Three Months Ended March 31,
                                                        -------------------------------
                                                             2003              2002
                                                        --------------    -------------
<S>                                                       <C>              <C>
Weighted average shares outstanding (basic)                17,637,260       17,404,568
Incremental shares from assumed option exercise                57,741          449,241
                                                        --------------    -------------
Weighted average shares outstanding (diluted)              17,695,001       17,853,809
                                                        ==============    =============
</TABLE>


     The  outstanding  O.P. Units,  which are  exchangeable at the unit holder's
     option,  subject to  certain  conditions,  for shares of common  stock on a
     one-for-one  basis have been excluded from the diluted net income per share
     calculation,  as there  would  be no  effect  on the  amounts  because  the
     minority interests' share of income would also be added back to net income.
     The total number of O.P.  Units  outstanding at March 31, 2003 and 2002 was
     86,498,064 and 86,165,346, respectively.

                                     - 7 -

<PAGE>


5.   RELATED PARTY TRANSACTIONS

     As of March 31, 2003, the Berg Group owned 78,364,716 O.P. Units.  Combined
     with shares of the Company's common stock owned by the Berg Group, the Berg
     Group's ownership as of March 31, 2003 represented approximately 75% of the
     equity interests of the Company, assuming conversion of the 86,498,064 O.P.
     Units outstanding into the Company's common stock.

     The  Company  and the Berg  Group have  mutually  agreed to reduce the Berg
     Group  $100,000  line of credit  to  $20,000  and to reduce  collateralized
     properties  to five  properties.  The Berg Group line of credit  will still
     bear interest at LIBOR plus 1.30%,  and matures in March 2004.  The Company
     believes that the terms of the Berg Group line of credit are more favorable
     than those available from commercial lenders. As of March 31, 2003, debt in
     the  amount of $26 was due the Berg Group  under the line of credit.  As of
     March 31, 2003,  debt in the amount of $11,001 was due the Berg Group under
     a mortgage note established May 15, 2000 in connection with the acquisition
     of a 50% interest in Hellyer Avenue Limited Partnership,  the obligor under
     the mortgage note. The mortgage note bears interest at 7.65%, and is due in
     10 years with principal payments amortized over 20 years.

     Carl E. Berg has a  substantial  financial  interest  in one  company  that
     leases space from the operating  partnerships.  This company occupies 5,862
     square  feet at $2.34 per square  foot per month.  This lease was in effect
     prior to the Company's  acquisition of its general partnership interests in
     July 1998. The lease expires in May 2003. The Company believes that it will
     negotiate a short-term renewal at lease term expiration.

     The Company currently leases office space owned by Berg & Berg Enterprises,
     Inc.,  an affiliate of Carl E. Berg and Clyde J. Berg.  Rental  amounts and
     overhead reimbursements paid to Berg & Berg Enterprises,  Inc. were $23 for
     each of the three-month periods ended March 31, 2003 and 2002.

6.   COMMITMENTS AND CONTINGENCIES

     The Company and the operating  partnerships are or may become, from time to
     time,  parties to litigation  arising out of the normal course of business.
     Management  is not aware of any  litigation  against the Company that would
     have a material  adverse  effect on the  consolidated  financial  position,
     results of operations or cash flows of the Company.

     Insurance policies currently  maintained by the Company do not cover losses
     from the  consequence  of terrorism or seismic  activity,  although they do
     cover losses from fires after an earthquake.

7.   DISCONTINUED OPERATIONS

     Effective  January 1, 2002,  the Company  adopted  Statement  of  Financial
     Accounting Standards No. 144, "Accounting for the Impairment or Disposal of
     Long Lived Assets," which addresses financial  accounting and reporting for
     the impairment  and disposal of long-lived  assets.  In general,  income or
     loss  attributable  to  the  operations  and  sale  of  property,  and  the
     operations   related  to  property  held  for  sale,   are   classified  as
     discontinued  operations  in the  statements  of  operations.  All  periods
     presented in this report will likely require  further  reclassification  in
     future periods if additional property sales occur.

     As of March 31, 2003, there were no properties under contract to be sold or
     disposed of which would qualify as discontinued operations.

     In March 2002,  the Company  sold one  property for a total gain of $6,103.
     Condensed  results of  operations  for this  property  for the three months
     ended March 31, 2003 and 2002 are as follows:

<TABLE>
<CAPTION>

                                                 Three Months Ended March 31,
                                           ------------------------------------------
                                                  2003                   2002
                                           -------------------     ------------------
                                                    (Dollars in thousands)
<S>                                                  <C>                  <C>
         Rental income from real estate               -                    $333
         Tenant reimbursements                        -                     293
                                           -------------------     ------------------
               Total revenues                         -                     626

         Real estate taxes                            -                     293
         Depreciation                                 -                      46
                                           -------------------     ------------------
              Total expenses                          -                     339
                                           -------------------     ------------------
         Income before minority interests             -                     287
                   Minority interests                 -                     239
                                           -------------------     ------------------
                   Net income                         -                    $ 48
                                           ===================     ==================
</TABLE>

                                     - 8 -

<PAGE>


8.   SUBSEQUENT EVENTS

     On April 1, 2003,  the Company  obtained a 50% interest in a joint  venture
     with TBI in Morgan Hill, California from the Berg Group under the Berg Land
     Holdings Option  Agreement.  The joint venture financed 100% of the cost of
     the shell building.  The shell building was sold on April 2, 2003 for cash.
     The Company  will  recognize a gain of  approximately  $1,400 in the second
     quarter 2003 from its share of the joint venture's profit.

     On April 9, 2003,  the  Company  acquired a 36-acre  seven-building  campus
     style office/R&D project comprised of approximately 625,000 rentable square
     feet at San Tomas and Central Expressway in Santa Clara,  California,  also
     known as the San Tomas  Technology  Park.  The  project  was  acquired  for
     $110,000 from an unrelated  third party and financed with a combination  of
     debt and cash reserves. The debt component is comprised of a new short term
     $80,000 mortgage note with a commercial bank collateralized by the acquired
     assets.  This note bears  interest  at a rate equal to LIBOR plus 200 basis
     points and matures in 120 days.  The Company paid a financing  fee of $150.
     The Company is in the process of securing long term mortgage debt to retire
     this  short  term  credit  facility.  In  addition,  the  Company  utilized
     approximately  $19,200  of its  operating  line of  credit  with  Cupertino
     National Bank to pay part of the purchase price.

     On April 10, 2003,  the Company paid dividends of $0.24 per share of common
     stock to all common  stockholders  of record as of March 31,  2003.  On the
     same date, the operating partnerships paid a distribution of $0.24 per O.P.
     Unit to all holders of O.P. Units.

                                     - 9 -
<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  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, 2002.  The
results for the three months ended March 31, 2003 are not necessarily indicative
of the results to be expected  for the entire  fiscal year ending  December  31,
2003. The following discussion includes  forward-looking  statements,  including
but not limited to,  statements with respect to the Company's  future  financial
performance,  operating results, plans and objectives. Actual results may differ
materially from those currently anticipated depending upon a variety of factors,
including  those  described  below  under  the   sub-heading,   "Forward-Looking
Information."

OVERVIEW

Mission West Properties,  Inc. (the "Company")  acquires,  markets,  leases, and
manages  R&D and office  properties,  primarily  located in the  Silicon  Valley
portion of the San Francisco  Bay Area. As of March 31, 2003,  the Company owned
and managed 101 properties  totaling  approximately  7.2 million rentable square
feet through four limited partnerships, or operating partnerships,  for which it
is the sole general partner. This class of property is designed for research and
development  and  office  uses  and,  in some  cases,  includes  space for light
manufacturing  operations with loading docks.  The Company  believes that it has
one of the largest  portfolios of R&D  properties in the Silicon  Valley.  As of
March 31,  2003,  the four  tenants who leased the most square  footage from the
Company were Microsoft Corporation, JDS Uniphase Corporation, Amdahl Corporation
(a subsidiary of Fujitsu Limited),  and Apple Computer,  Inc. For federal income
tax purposes, the Company has operated as a self-managed,  self-administered and
fully integrated real estate investment trust ("REIT") since fiscal 1999.

The  Company's  acquisition,  growth and  operating  strategy  incorporates  the
following elements:

-    working  with  the Berg  Group to take  advantage  of their  abilities  and
     resources  to pursue  development  opportunities  which the Company have an
     option to acquire, on pre-negotiated terms, upon completion and leasing;

-    capitalizing   on   opportunistic   acquisitions   from  third  parties  of
     high-quality  R&D and office  properties  that provide  attractive  initial
     yields and significant potential for growth in cash-flow;

-    focusing on general  purpose,  single-tenant  Silicon Valley R&D and office
     properties for  information  technology  companies in order to maintain low
     operating costs, reduce tenant turnover and capitalize on our relationships
     with these  companies  and our  extensive  knowledge  of their real  estate
     needs; and

-    maintaining prudent financial management  principles that emphasize current
     cash flow while building  long-term  value,  the  acquisition of pre-leased
     properties to reduce  development  and leasing risks and the maintenance of
     sufficient liquidity to acquire and finance properties on desirable terms.

CRITICAL ACCOUNTING POLICIES

The Company  prepares the consolidated  financial  statements in conformity with
GAAP,  which requires it to make certain  estimates,  judgments and  assumptions
that affect the  reported  amounts in the  accompanying  consolidated  financial
statements,   disclosure  of  contingent  assets  and  liabilities  and  related
footnotes.  Actual  results  may differ  from these  estimates  under  different
assumptions or conditions.

Critical  accounting  policies are defined as those that require  management  to
make  estimates,   judgments  and  assumptions,   giving  due  consideration  to
materiality,  in certain  circumstances  that  affect  amounts  reported  in the
consolidated   financial  statements,   and  potentially  result  in  materially
different  results  under  different  conditions  and  assumptions.  The Company
believes that the following best describe its critical accounting policies:

REAL  ESTATE  ASSETS.  Real  estate  assets  are stated at cost.  Cost  includes
expenditures  for  improvements  or  replacements.  Maintenance  and repairs are
charged to expense as  incurred.  Gains and losses  from sales are  included  in
income in accordance with Statement of Financial  Accounting  Standard  ("SFAS")
No. 66, "Accounting for Sales of Real Estate."

The Company reviews real estate assets for impairment whenever events or changes
in  circumstances  indicate  that the  carrying  amount  of an asset  may not be
recoverable.  If  the  carrying  amount  of  the  asset  exceeds  its  estimated
undiscounted  net cash flow,  before  interest,  it will recognize an impairment
loss equal to the difference  between the carrying amount and the estimated fair
value.  If impairment is recognized,  the reduced  carrying  amount of the asset
will be accounted  for as its new cost.  For a depreciable  asset,  the new cost
will be depreciated  over the asset's  remaining  useful life.  Generally,  fair
values are estimated  using  discounted  cash flow,  replacement  cost or market
comparison analyses. The process of evaluating for impairment requires estimates
as to future  events and  conditions,  which are  subject to varying  market and
economic factors, however. Therefore, it is reasonably possible that a change in
estimate  resulting  from  judgments as to future events could occur which would
affect the recorded amounts of the property.

                                     - 10 -
<PAGE>

ALLOWANCE FOR DOUBTFUL ACCOUNTS AND RESERVE. The preparation of the consolidated
financial statements requires the Company to make estimates and assumptions.  As
such, it must make estimates of the  uncollectability of its accounts receivable
based on the evaluation of its tenants' financial position, analyses of accounts
receivable and current economic  trends.  The Company also makes estimates for a
straight-line  adjustment  reserve for existing  tenants  with the  potential of
bankruptcy  or  ceasing  operations.  Its  estimates  are based on the review of
tenants' payment histories,  publicly available  financial  information and such
additional  information about their financial condition as tenants provide them.
The  information  available  to  the  Company  might  lead  it to  overstate  or
understate these reserve amounts.  The use of different estimates or assumptions
could produce different results. Moreover, actual future collections of accounts
receivable  or  reductions  in  future  reported  rental  income  due to  tenant
bankruptcies  or  other  business  failures  could  differ  materially  from the
Company's estimates.

CONSOLIDATED JOINT VENTURES. The Company, through an operating partnership, owns
three  properties  that are in joint  ventures  of  which it has  interests.  It
manages and operates all three  properties.  The recognition of these properties
and  their  operating  results  are  reflected  on  the  Company's  consolidated
financial  statements  and  minority  interest  because it has  operational  and
financial   control  of  the  investments.   The  Company  makes  judgments  and
assumptions  about the  estimated  monthly  payments  made to its joint  venture
partners,  which are reported with its periodic  results of  operations.  Actual
results  may  differ  from  these  estimates  under  different   assumptions  or
conditions.

REVENUE RECOGNITION. Rental revenue is recognized on the straight-line method of
accounting  required by GAAP under which  contractual rent payment increases are
recognized evenly over the lease term. The difference  between recognized rental
income and rental cash  receipts  is  recorded  as deferred  rent on the balance
sheet.  Certain lease agreements contain terms that provide for additional rents
based on reimbursement of certain costs. These additional rents are reflected on
the accrual basis.

Rental revenue is affected if existing tenants  terminate or amend their leases.
Thus,  if tenants  lengthen  their  lease  term,  additional  rental  revenue is
recognized.  On the other hand, if tenants  terminate their lease  agreements or
shorten their lease terms,  rental revenue  decreases  because of reduced future
cash flows and a one-time  straight-line  adjustment to deferred rent,  which is
the difference  between  recognized rental income and rental cash receipts.  The
Company  tries to identify  tenants who have the  potential of  bankruptcy or of
ceasing operations. By anticipating these events in advance, the Company expects
to take  actions to minimize  the effect on the results of its  operations.  The
Company's  judgments and estimations about tenants' capacity to continue to meet
their lease  obligations  will affect the rental  revenue  recognized.  Material
differences  may result in the amount and timing of our rental  revenue  for any
period if the Company made different judgments or estimations.

                                     - 11 -
<PAGE>

RESULTS OF OPERATIONS

COMPARISON  OF THE THREE  MONTHS  ENDED MARCH 31, 2003 TO THE THREE MONTHS ENDED
MARCH 31, 2002.

As of March 31, 2003,  the  Company,  through its  controlling  interests in the
operating partnerships,  owned 101 properties totaling approximately 7.2 million
square feet compared to 100 properties totaling approximately 7.0 million square
feet owned by the Company as of March 31, 2002.  This  represents a net increase
of approximately  3% in total rentable square footage,  which is attributable to
the  Company's  acquisition  of one  property at 5900 Optical  Court,  San Jose,
California  consisting of approximately 165,000 net rentable square feet in July
2002.

Rental revenues from continuing  operations for the three months ended March 31,
2003 declined from the comparable  three-month period in 2002, as illustrated in
the following table:
<TABLE>
<CAPTION>

                              Three Months Ended March 31,
                            ---------------------------------
                                                                                      % Change by         % of Total Net
                                2003               2002             $ Change         Property Group           Change
                            --------------     --------------     --------------     ---------------     -----------------
                                          (Dollars in thousands)
<S>                           <C>                <C>                <C>                  <C>                   <C>
   Same Property (1)           $28,849            $31,444            ($2,595)              (8.3%)               (7.9%)
   2002 Acquisitions (2)         2,582              1,040              1,542              148.3%                 4.7%
                            --------------     --------------     --------------                         -----------------
                               $31,431            $32,484            ($1,053)              (3.2%)               (3.2%)
                            ==============     ==============     ==============                         =================
</TABLE>

(1)  "Same Property" is defined as properties owned by the Company prior to 2002
     that the Company still owned as of March 31, 2003.
(2)  Operating  rental  revenues for 2002  Acquisitions do not reflect a full 12
     months of  operations  in 2002 because  these  properties  were acquired at
     various times during 2002.

RENTAL REVENUE FROM CONTINUING OPERATIONS
For the quarter ended March 31, 2003, rental revenues decreased by $1.1 million,
or 3.2%,  from $32.5  million for the three months ended March 31, 2002 to $31.4
million  for the same  period of 2003.  Of the $1.1  million  decrease in rental
revenues,  ($2.6) million resulted from the Company's "Same Property"  portfolio
and $1.5 million resulted from properties  acquired in 2002. The overall decline
in rental revenues was a result of adverse market conditions and loss of several
tenants due to their bankruptcy or cessation of operations since March 31, 2002.
The Company's  occupancy rate at March 31, 2003 was approximately  83%, compared
to 92% at March 31, 2002.

EQUITY IN EARNINGS FROM UNCONSOLIDATED JOINT VENTURE
As of March  31,  2003,  the  Company  had  investments  in four R&D  buildings,
totaling 593,000 rentable square feet, through an unconsolidated  joint venture,
in which the Company  acquired a 50% interest in January 2003. The Company has a
non-controlling limited partnership interests in this venture, which it accounts
for using the equity method of accounting.  For the three months ended March 31,
2003, the Company recorded approximately $0.7 million in equity in earnings from
an unconsolidated joint venture.

OTHER INCOME
Other income, including interest, increased to $0.7 million for the three months
ended March 31, 2003 from $0.5  million for the first  quarter of 2002.  Utility
rebates  represented  most of the increase.  The Company does not consider these
rebates to be a recurring item.

EXPENSES FROM CONTINUING OPERATIONS
Operating  expenses  and real  estate  taxes from  continuing  operations,  on a
combined basis,  decreased by $0.7 million,  or 13.2%, from $5.3 million to $4.6
million for the three months ended March 31, 2002 and 2003, respectively, due to
lower occupancy  during the first quarter of 2003.  Tenant  reimbursements  from
continuing  operations also  consistently  decreased by $0.8 million,  or 15.1%,
from $5.3  million for the three months ended March 31, 2002 to $4.5 million for
the three months ended March 31, 2003.

Depreciation  expense from continuing  operations was  approximately the same in
the  first  quarter  of 2002 and  2003,  as the  Company  acquired  just one new
property between March 31, 2002 and March 31, 2003.

Interest expense increased by $1.1 million,  or 47.8%, from $2.3 million for the
three  months  ended March 31, 2002 to $3.4  million for the three  months ended
March 31, 2003. The increased  expense resulted from additional debt obtained by
the  Company,  consisting  of a new  revolving  line of  credit  from  Cupertino
National  Bank put in place during the third quarter 2002 and a new $100 million
mortgage loan from  Northwestern  Mutual Life Insurance Company in early January
2003. Interest expense (related parties) decreased by $0.7 million, or 70%, from
$1.0  million for the three  months ended March 31, 2002 to $0.3 million for the
three months ended March 31, 2003 due to lower  interest rates and the repayment
of the  remaining  balance  on  the  Berg  Group  line  of  credit.  Total  debt
outstanding,  including amounts due related parties,  decreased by $8.7 million,
or 3.6%,  from $243.3 million as of March 31, 2002 to $234.6 million as of March
31, 2003. As a result of the new debt outstanding,  interest expense  (including
amounts paid to related  parties) for the quarter ended March 31, 2003 increased
by $0.4  million  compared  to the same  quarter a year ago because the new debt
carries a higher  interest  rate than the Berg Group line of credit.  Management
expects  interest expense to increase as new debt is incurred in connection with
property  acquisitions,  as the Company  draws on the  Cupertino  National  Bank
revolving line of credit, and as it seeks alternative sources of credit.

                                     - 12 -
<page>

NET INCOME TO MINORITY INTEREST AND NET INCOME TO COMMON STOCKHOLDERS
The minority  interest  portion of income  decreased by $5.9 million,  or 22.6%,
from $26.1  million for the three months  ended March 31, 2002 to $20.2  million
for the three months ended March 31, 2003. Net income to stockholders  decreased
by $1.2  million,  or 23.1%,  from $5.2 million for the three months ended March
31, 2002 to $4.0 million for the same period in 2003.  The decline in net income
was primarily due to reduced rental revenues and the absence of gain from a sale
of discontinued operations.  Minority interest represents the ownership interest
of all limited partners in the operating  partnerships  taken as a whole,  which
was approximately 83% as of March 31, 2003 and 2002.

RECENT DEVELOPMENTS

RENTAL MARKET  CONDITIONS.  All of the Company's  properties  are located in the
Northern  California area known as Silicon Valley,  which generally  consists of
portions of Santa Clara County,  Southwestern  Alameda County,  Southeastern San
Mateo  County and Eastern  Santa Cruz  County.  The Silicon  Valley  economy and
business activity slowed markedly since 2001 after fast-paced growth in 1999 and
2000. The Silicon Valley R&D property  market has  historically  fluctuated with
the local  economy.  According to a recent report by BT Commercial  Real Estate,
vacancy rates for Silicon Valley R&D property increased from approximately 21.9%
in late 2002 to 22.5% at the end of the first  quarter  2003.  Total  vacant R&D
square  footage  in  Silicon  Valley  at the end of the  first  quarter  of 2003
amounted to 35.0 million square feet, of which 38%, or 13.2 million square feet,
was being  offered  under  subleases.  Total  negative  net  absorption  in 2002
amounted to  approximately  (10.9) million  square feet.  During the first three
months of 2003, there was total negative net absorption of  approximately  (2.0)
million square feet. The impact of this decline has not been uniform  throughout
the area, however. The Silicon Valley R&D property market has been characterized
by a  substantial  number of  submarkets,  with rent and vacancy  rates  varying
considerably by submarket and location within each submarket.

The  Company's  actual  occupancy  rate at March  31,  2003 was 83%,  which is a
significant  decline  from the  occupancy  rate of 92% at March  31,  2002.  The
Company  believes that its occupancy rate could decline further going forward if
key  tenants  seek  the  protection  of  the  bankruptcy   laws  or  discontinue
operations.  In addition,  leases with respect to approximately 527,000 rentable
square feet are expiring  prior to the end of 2003.  These  properties  may take
anywhere  from six to 12 months or longer to re-lease.  The Company  expects the
average 2003 renewal rental rates for these properties to be approximately equal
to,  or  perhaps,  below  current  rents.  If the  Company  is unable to lease a
significant  portion of any vacant space or space  scheduled  to expire;  if the
Company  experiences  significant  tenant  defaults  as a result of the  current
economic  downturn;  or if the  Company  is not able to lease  space at or above
current market rates, its results of operations and cash flows will be adversely
affected.  The  Company's  operating  results  and ability to pay  dividends  at
current levels remain subject to a number of material  risks, as indicated under
the caption  "Forward-Looking  Information"  below and in the  section  entitled
"Risk Factors" in the Company's most recent annual report on Form 10-K.

RECENT PROPERTY ACQUISITIONS.  Effective January 1, 2003, the Company acquired a
50% interest in a joint  venture with TBI in Morgan  Hill,  California  for $1.8
million from the Berg Group under the Berg Land Holdings Option  Agreement.  The
Company  financed  the  acquisition  of its 50%  interest  with the  issuance of
181,032 O.P.  Units to the Berg Group.  The joint  venture  consists of four R&D
buildings with  approximately  593,000  rentable square feet, which are operated
and managed by TBI, the other partner in the joint venture.

On April 9, 2003,  the Company  acquired a 36-acre  seven-building  campus style
office/R&D  project  comprised of approximately  625,000 rentable square feet at
San Tomas and Central Expressway in Santa Clara,  California,  also known as the
San  Tomas   Technology  Park.  The  San  Tomas  Technology  Park  is  currently
approximately  90% leased,  but one tenant,  which leases  approximately  98,000
rentable  square feet,  has filed a petition  under Chapter 11 of the Bankruptcy
Code  subsequent  to the  acquisition  date.  The project was  acquired for $110
million from BRE/San  Tomas I LLC and BRE/San  Tomas II LLC and financed  with a
combination of debt and cash reserves.  The debt component is comprised of a new
$80 million short term mortgage note with a commercial bank  collateralized with
the  acquired  assets  which bears  interest at LIBOR plus 200 basis  points and
matures in 120 days.  The Company paid a financing fee of $150,000.  The Company
is in the process of securing  long term mortgage debt to retire this short term
credit facility. In addition,  the Company utilized  approximately $19.2 million
of its operating line of credit with Cupertino  National Bank in connection with
this acquisition.  Pro forma financial  information of the Company pertaining to
this acquisition  will be filed by amendment to the Company's  Current Report on
Form 8-K, dated April 23, 2003.

On April 1, 2003,  the Company  obtained a 50% interest in a joint  venture with
TBI in Morgan Hill,  California from the Berg Group under the Berg Land Holdings
Option  Agreement.  The  joint  venture  financed  100% of the cost of the shell
building.  The shell  building  was sold on April 2, 2003 for cash.  The Company
will recognize a gain of  approximately  $1.4 million in the second quarter 2003
from its share of the joint venture's profit.

                                     - 13 -

<PAGE>


CHANGES IN FINANCIAL CONDITION

The most  significant  changes  during the three  months  ended  March 31,  2003
resulted from the  acquisition  of a 50% joint venture  interest and  additional
borrowings.  Stockholders'  equity  increased from the exercise of stock options
and the exchange of O.P. Units for common stock.

At March 31, 2003, real estate assets  increased by  approximately  $0.6 million
from December 31, 2002 due to tenant improvements. During the first three months
of 2003,  the Company  acquired a 50% interest in a joint  venture from the Berg
Group  under the Berg Land  Holdings  Option  Agreement  for $1.8  million.  The
Company  financed this  acquisition  by issuing  181,032 O.P.  Units.  The joint
venture consists of four buildings with approximately 593,000 square feet, which
are operated and managed by TBI, the other partner in the joint venture.

At March 31, 2003, total  stockholders'  equity increased by approximately  $1.4
million from December 31, 2002 from the increase of accumulated  deficit,  stock
option  exercises and the exchange of O.P. Units for the Company's common stock.
During the three months ended March 31, 2003,  stock  options to purchase  9,362
shares of common stock were exercised at $4.50 per share.  Total proceeds to the
Company were approximately  $42,000.  During the first three months of 2003, two
limited  partners  exchanged  157,000  O.P.  Units  for  157,000  shares  of the
Company's common stock under the Exchange Rights Agreement among the Company and
the limited  partners in the  operating  partnerships.  The newly issued  shares
increased additional paid in capital by approximately $1.6 million.

LIQUIDITY AND CAPITAL RESOURCES

The Company  expects its  principal  sources of liquidity for  distributions  to
stockholders and unit holders,  debt service,  leasing commissions and recurring
capital  expenditures  to come from  operations  and/or  the Berg  Group line of
credit and other credit  facilities  that may be established by the Company with
third  party  financial  institutions.  The  Company  expects  these  sources of
liquidity to be adequate to meet projected  distributions  to  stockholders  and
other presently anticipated liquidity  requirements in 2003. The Company expects
to meet  its  long-term  liquidity  requirements  for the  funding  of  property
development,  property  acquisitions  and other material  non-recurring  capital
improvements  through  long-term  secured  and  unsecured  indebtedness  and the
issuance of additional  equity  securities  by the Company.  The Company has the
ability to meet  short-term  obligations or other  liquidity  needs based on the
Berg Group and Cupertino  National Bank  revolving  line of credit.  Despite the
current  weakness  in the  economy,  the  Company  expects  interest  expense to
increase,  but not significantly,  as it incurs debt through acquisitions of new
properties and as interest rates increase.

On January 9, 2003, the Company  obtained a $100 million  secured  mortgage loan
from Northwestern Mutual Life Insurance Company ("Northwestern Loan") that bears
a fixed interest rate at 5.64% and matures in ten years with principal  payments
amortized  over 20 years.  The mortgage  loan is secured by 11  properties.  The
Company paid  approximately  $675,000 in loan fees and financing  costs and used
the proceeds to primarily  pay down  short-term  debt and the Berg Group line of
credit.

On April 10, 2003, the Company paid dividends of $0.24 per share of common stock
to all common stockholders of record as of March 31, 2003. On the same date, the
operating partnerships paid a distribution of $0.24 per O.P. Unit to all holders
of O.P. Units.

At March 31,  2003,  the  Company  had  total  indebtedness  of $234.6  million,
including $223.6 million of fixed rate mortgage debt and $11.0 million under the
Berg Group mortgage note (related parties), as detailed in the table below:

                                     - 14 -
<PAGE>

MORTGAGE DEBT

     The following table sets forth information regarding debt outstanding as of
March 31, 2003:
<TABLE>
<CAPTION>


                                                                                                          Maturity     Interest
                Debt Description                         Collateral Properties             Balance          Date         Rate
---------------------------------------------- -------------------------------------- ----------------- ------------ ------------
                                                                                     (Dollars in thousands)
<S>                                           <C>                                      <C>                 <C>          <C>
Line of Credit:
Berg Group (related parties)                   2033-2043 Samaritan Dr., San Jose, CA    $         26         3/04          (1)
                                               2133 Samaritan Dr., San Jose, CA       -----------------
                                               2233-2243 Samaritan Dr., San Jose, CA
                                               1310-1450 McCandless Dr., Milpitas, CA
                                               1795-1845 McCandless Dr., Milpitas, CA

Mortgage Notes Payable (related parties):      5300 & 5350 Hellyer Ave., San Jose, CA         11,001         6/10        7.650%
                                                                                      -----------------
Mortgage Notes Payable:
Prudential Capital Group                       20400 Mariani Ave., Cupertino, CA                 905        10/06        8.750%
Washington Mutual (Home Savings & Loan Assoc.) 10460 Bubb Road, Cupertino, CA                    280        12/06        9.500%
Prudential Insurance Company of America (2)    10300 Bubb Road, Cupertino, CA                122,882        10/08        6.560%
                                               10500 N. DeAnza Blvd., Cupertino, CA
                                               4050 Starboard Dr., Fremont, CA
                                               45700 Northport Loop, Fremont, CA
                                               45738 Northport Loop, Fremont, CA
                                               450-460 National Ave., Mt. View, CA
                                               6311 San Ignacio Ave., San Jose, CA
                                               6321 San Ignacio Ave., San Jose, CA
                                               6325 San IgnaciO Ave., San Jose, CA
                                               6331 San Ignacio Ave., San Jose, CA
                                               6341 San Ignacio Ave., San Jose, CA
                                               6351 San Ignacio Ave., San Jose, CA
                                               3236 Scott Blvd., Santa Clara, CA
                                               3560 Bassett St., Santa Clara, CA
                                               3570 Bassett St., Santa Clara, CA
                                               3580 Bassett St., Santa Clara, CA
                                               1135 Kern Ave., Sunnyvale, CA
                                               1212 Bordeaux Lane, Sunnyvale, CA
                                               1230 E. Arques, Sunnyvale, CA
                                               1250 E. Arques, Sunnyvale, CA
                                               1170 Morse Ave., Sunnyvale, CA
                                               1600 Memorex Dr., Santa Clara, CA
                                               1688 Richard Ave., Santa Clara, CA
                                               1700 Richard Ave., Santa Clara, CA
                                               3540 Bassett St., Santa Clara, CA
                                               3542 Bassett St., Santa Clara, CA
                                               3544 Bassett St., Santa Clara, CA
                                               3550 Bassett St., Santa Clara, CA
Northwestern Mutual Life Insurance Company     1750 Automation Pkwy., San Jose, CA            99,519         1/13        5.640%
                                               1756 Automation Pkwy., San Jose, CA
                                               1762 Automation Pkwy., San Jose, CA
                                               6320 San Ignacio Ave., San Jose, CA
                                               6540-6541 Via Del Oro, San Jose, CA
                                               6385-6387 Via Del Oro, San Jose, CA
                                               2251 Lawson Lane, Santa Clara, CA
                                               1325 McCandless Dr., Milpitas, CA
                                               1650-1690 McCandless Dr., Milpitas, CA
                                               20605-20705 Valley Green Dr., Cupertino, CA
                                                                                      -----------------
Mortgage Notes Payable Subtotal                                                              223,586
                                                                                      -----------------
TOTAL                                                                                   $    234,613
                                                                                      =================

</TABLE>

(1)  The debt owed to the Berg Group under the line of credit carries a variable
     interest  rate  equal to LIBOR  plus  1.30% and is payable in full in March
     2004. The interest rate at March 31, 2003 was 2.56%.
(2)  John Kontrabecki, one of the limited partners, has guaranteed approximately
     $12,000 of this debt.

                                     - 15 -

<PAGE>


As of March 31, 2003,  the Company's debt to total market  capitalization  ratio
was  approximately   19.3%,   based  upon  a  total  market   capitalization  of
approximately  $1.2  billion.  The Company  computed  this ratio by dividing the
Company's  total debt  outstanding  as of March 31, 2003 by the sum of this debt
plus the market value of common stock (based upon the closing price of $9.40 per
share on March 31,  2003) on a fully  diluted  basis,  taking  into  account the
conversion of all O.P. Units into common stock.  Had the Company factored in the
$80 million loan  obtained  from  Citicorp USA, Inc. and the $19.2 million drawn
down on the  Cupertino  National  Bank line of credit in April  2003 for the San
Tomas Technology Park acquisition, the debt to total market capitalization ratio
would have been 24.5%.

HISTORICAL CASH FLOWS

Net cash provided by operating  activities  for the three months ended March 31,
2003 was $27.9  million  compared to $28.6  million for the same period in 2002.
The  decline  resulted  from the  decrease in rental  income from the  Company's
current  portfolio of property due to tenant lease  obligation  defaults  during
2002.

Net cash used in  investing  activities  was  approximately  ($0.6)  million and
($18.8)   million  for  the  three   months  ended  March  31,  2003  and  2002,
respectively,  as there were minimal cash transactions  related to purchases and
sales during the first quarter of 2003.

Net cash used in financing  activities was ($29.1)  million for the three months
ended March 31, 2003 compared to ($7.6)  million for the same period in 2002. Of
the ($29.1) million net cash used in financing activities,  ($104.2) million was
used  to  pay  outstanding   debt,   ($20.8)   million  for  minority   interest
distributions,   and  ($4.2)  million  for  dividends.   The  Company   obtained
approximately  $100  million  from  financing   activity,   which  included  the
Northwestern Loan, as well as proceeds from the exercise of stock options.

CAPITAL EXPENDITURES

The Company's  existing R&D properties  require periodic  investments of capital
for tenant-related  capital  expenditures and for general capital  improvements.
For the years ended  December 31, 1997 through  December 31, 2002, the recurring
tenant  improvement costs and leasing  commissions  incurred with respect to new
leases and lease  renewals of the  properties  that were owned or  controlled by
members of the Berg Group  prior to July 1, 1998  averaged  approximately  $1.75
million annually.  The Company expects that the average annual cost of recurring
tenant improvements and leasing commissions,  related to the properties, will be
approximately  $1.5 million  during 2003.  The Company  believes it will recover
substantially  all of these sums from the  tenants  under new or renewed  leases
through  increases in rental  rates.  The Company  expects to meet its long-term
liquidity  requirements  for  the  funding  of  property  development,  property
acquisitions  and other  material  non-recurring  capital  improvements  through
long-term  secured and  unsecured  indebtedness  and the issuance of  additional
equity securities by the Company.

FUNDS FROM OPERATIONS

The  Company's  principal  performance  measurements  are net  income  to common
stockholders and earnings per share computed in accordance with GAAP. Management
considers FFO an  appropriate  measure of performance of an equity REIT because,
along  with cash flows  from  operating  activities,  financing  activities  and
investing  activities,  it  provides  investors  with  an  understanding  of the
Company's ability to incur and service debt, and make capital  expenditures.  As
defined by the National Association of Real Estate Investment Trusts ("NAREIT"),
FFO  represents  net income  (loss)  before  minority  interest of unit  holders
(computed  in  accordance  with GAAP),  excluding  gains (or  losses)  from debt
restructuring and sales of property,  plus real estate related  depreciation and
amortization   (excluding   amortization   of  deferred   financing   costs  and
depreciation of non-real estate assets) and after adjustments for unconsolidated
partnerships and joint ventures.  FFO should not be considered as an alternative
for net income as a measure of  profitability  and it is not  comparable to cash
flows provided by operating  activities  determined in accordance with GAAP, nor
is FFO  necessarily  indicative of funds  available to meet the  Company's  cash
needs,   including  its  need  to  make  cash   distributions  to  satisfy  REIT
requirements.

The Company's  definition of FFO also assumes conversion at the beginning of the
period of all convertible securities, including minority interests that might be
exchanged  for common stock.  FFO does not  represent  the amount  available for
management's  discretionary  use  as  such  funds  may  be  needed  for  capital
replacement  or expansion,  debt service  obligations or other  commitments  and
uncertainties.  Furthermore,  FFO is not comparable to similarly  entitled items
reported by other REITs that do not define them  exactly as the Company  defines
FFO. FFO for the three months ended March 31, 2003 and 2002,  as  reconciled  to
net income to common stockholders, are summarized in the tables below:

                                     - 16 -

<PAGE>

<TABLE>
<CAPTION>


                                  Three Months Ended March 31,
                            -----------------------------------------
                                  2003                   2002
                            ------------------     ------------------
                                     (Dollars in thousands)
<S>                            <C>                    <C>
Net income to common
stockholders                    $  4,034               $  5,201
Add:
    Minority interests (1)        20,057                 25,933
    Depreciation (2)               4,564                  4,402
Less:
    Gain on sale of assets             -                  6,103
                            ------------------     ------------------
FFO                             $ 28,655               $ 29,433
                            ==================     ==================
</TABLE>

(1)  Excludes minority interest for unrelated parties.
(2)  Includes depreciation from discontinued operations.

DISTRIBUTION POLICY

The  Company's  board of  directors  will  determine  the  amount  and timing of
distributions  to our  stockholders.  The board of directors  will consider many
factors prior to making any distributions, including the following:

-    the amount of cash available for distribution;

-    the Company's financial condition;

-    whether to reinvest funds rather than to distribute such funds;

-    the Company's committed and projected capital expenditures;

-    the  amount  of cash  required  for new  property  acquisitions,  including
     acquisitions under existing agreements with the Berg Group;

-    prospects  of tenant  renewals  and  re-leases  of  properties  subject  to
     expiring leases;

-    cash required for re-leasing activities;

-    the  annual  distribution  requirements  under the REIT  provisions  of the
     federal income tax laws; and

-    such other factors as the board of directors deems relevant.

The  Company  cannot  assure  you  that it  will  be  able  to meet or  maintain
management's cash distribution objectives.

                                     - 17 -
<PAGE>


IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

The  Company  does  not  believe  recently  issued  accounting   standards  will
materially impact its financial statements.

FORWARD-LOOKING INFORMATION

This quarterly report contains forward-looking  statements within the meaning of
the federal securities laws. The Company intends such forward-looking statements
to be covered  by the safe  harbor  provisions  for  forward-looking  statements
contained in the Private  Securities  Reform Act of 1995,  and is including this
statement  for  purposes  of  complying  with  these  safe  harbor   provisions.
Forward-looking statements,  which are based on certain assumptions and describe
future  plans,  strategies  and  expectations  of  the  Company,  are  generally
identifiable by use of the words "believe,"  "expect,"  "intend,"  "anticipate,"
"estimate,"  "project" or similar  expressions.  Additionally,  all  disclosures
under Part I.,  Item 3  constitute  forward-looking  statements.  The  Company's
ability to predict results or the actual effect of future plans or strategies is
inherently uncertain.

Factors that could have a material  adverse  effect on the operations and future
prospects of the Company include, but are not limited to, the following:

-    economic conditions generally and the real estate market specifically,
-    legislative  or  regulatory  provisions  affecting  the Company  (including
     changes to laws governing the taxation of REITs),
-    availability of capital,
-    interest rates,
-    competition,
-    supply of and  demand  for R&D,  office and  industrial  properties  in the
     Company's current and proposed market areas,
-    tenant defaults and bankruptcies,
-    lease term expirations and renewals, and
-    general accounting principles, policies and guidelines applicable to REITs.

In addition, the actual timing of development,  construction, and leasing on any
projects  that the Company  believes it may acquire in the future under the Berg
Land Holdings Option Agreement is unknown presently,  and reliance should not be
placed  on  the   estimates   concerning   these   projects.   These  risks  and
uncertainties,  together with the other risks described from time to time in the
Company's  reports and other  documents  filed with the  Securities and Exchange
Commission,  should be considered in evaluating  forward-looking  statements and
undue reliance should not be placed on such statements.

                                     - 18 -

<PAGE>


ITEM 3
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not generally hold market risk sensitive instruments for trading purposes.
We use fixed and variable rate debt to finance our  operations.  Our exposure to
market risk for changes in interest  rates relates  primarily to our current and
future debt  obligations.  We are  vulnerable  to  significant  fluctuations  of
interest  rates on our floating  rate debt,  and pricing on our future debt.  We
manage our market risk by  monitoring  interest  rates where we try to recognize
the  unpredictability  of the financial  markets and seek to reduce  potentially
adverse effect on the results of our operations.  This takes frequent evaluation
of available  lending rates and examination of  opportunities to reduce interest
expense  through new sources of debt financing.  Several  factors  affecting the
interest rate risk include governmental monetary and tax policies,  domestic and
international  economics  and other  factors  that are beyond our  control.  The
following table provides  information  about the principal cash flows,  weighted
average interest rates,  and expected  maturity dates for debt outstanding as of
March  31,  2003.  The  current  terms of this  debt are  described  in Item 2.,
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations - Liquidity and Capital Resources."

For variable rate debt, the table presents the assumption  that the  outstanding
principal balance at March 31, 2003 will be paid upon maturity.

For fixed rate debt,  the table  presents the  assumption  that the  outstanding
principal  balance  at  March  31,  2003  will be paid  according  to  scheduled
principal payments and that we will not prepay any of the outstanding  principal
balance.
<TABLE>
<CAPTION>

                                                2003       2004       2005      2006      2007   Thereafter    Total   Fair Value
                                                ----       ----       ----      ----      ----   ----------    -----   ----------
<S>                                          <C>        <C>        <C>       <C>       <C>       <C>        <C>        <C>
Variable Rate Debt:                                                         (dollars in thousands)
   Secured debt                                             $26                                                   $26      $26
   Weighted average interest rate                         2.56%

Fixed Rate Debt:
   Secured notes payable                      $3,967     $5,612     $5,977    $6,245    $6,350    $206,436   $234,587   $242,890
   Weighted average interest rate              6.23%      6.23%      6.23%     6.23%     6.23%       6.23%
</TABLE>

The  variable  rate  debt  represented  less than 1%,  and the  fixed  rate debt
represented almost 100% of all debt outstanding for the three months ended March
31, 2003. All of the debt is denominated in United States dollars. Fair value of
fixed rate debt is affected by changes in market interest rates.

The primary market risk we face is the risk of interest rate fluctuations.  As a
result,  we pay lower rates of interest in periods of decreasing  interest rates
and higher rates of interest in periods of increasing  interest  rates. At March
31, 2003, we do not have any  substantial  variable rate debt that exposes us to
this risk. We also had no interest rate caps or interest rate swap  contracts at
March 31, 2003.

ITEM 4
CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE  CONTROLS AND  PROCEDURES.  Within the 90 days prior to
the date of this  report,  the Company has  conducted an  evaluation,  under the
supervision and with the  participation of the Company's  management,  including
the Company's Chief Executive Officer,  President and Vice President of Finance,
of the  effectiveness  of the design and operation of the  Company's  disclosure
controls and  procedures  pursuant to Exchange Act Rule 13a-14c.  Base upon that
evaluation, the Chief Executive Officer, President and Vice President of Finance
concluded that the Company's disclosure controls and procedures are effective in
timely alerting them to material  information relating to the Company (including
its subsidiaries) required to be included in the Company's periodic SEC filings.

CHANGES IN INTERNAL CONTROLS.  There were no significant changes in our internal
controls or to our knowledge,  in other factors that could significantly  affect
such internal controls subsequent to the date of their evaluation.

                                     - 19 -
<PAGE>



================================================================================

PART II - OTHER INFORMATION

ITEM 6
EXHIBITS AND REPORTS ON FORM 8-K

a.   Exhibits

     10.45  Citicorp USA, Inc. Promissory Note
     99.1   Section 1350 Certificate of CEO
     99.2   Section 1350 Certificate of principal financial officer
     99.3   Certification pursuant to Section 906 of the
            Sarbanes-Oxley Act of 2002

b.   Reports on Form 8-K

     The Company filed a Current Report on Form 8-K on April 23, 2003, regarding
     its results of  operations  and  financial  condition for the first quarter
     2003 and its acquisition of the San Tomas Technology Park on April 9, 2003.

================================================================================

 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, Inc.
                                   (Registrant)


Date:   May 14, 2003               By:    /s/ Carl E. Berg
                                   ----------------------------------
                                   Carl E. Berg
                                   Chief Executive Officer


Date:   May 14, 2003               By:    /s/ Wayne N. Pham
                                   ----------------------------------
                                   Wayne N. Pham
                                   Vice President of Finance and Controller
                                   (Principal Accounting Officer and Duly
                                   Authorized Officer)

                                     - 20 -