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 JUNE 30, 2004

                          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
 incorporation or organization)                              Number)

                               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 [ ] NO [X]

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:

                18,072,691 shares outstanding as of July 31, 2004

<PAGE>

                          Mission West Properties, Inc.

                                    FORM 10-Q
                       FOR THE QUARTER ENDED JUNE 30, 2004


                                      INDEX
<TABLE>
<CAPTION>
                                                                                                                     PAGE

PART I        FINANCIAL INFORMATION

   Item 1.    Financial Statements (unaudited):

<S>                                                                                                                 <C>
              Consolidated Balance Sheets as of June 30, 2004
              and December 31, 2003 ..................................................................................2

              Consolidated Statements of Operations for the
              three and six months ended June 30, 2004 and 2003 (As Restated).........................................3

              Consolidated Statements of Cash Flows for the
              six months ended June 30, 2004 and 2003 (As Restated)...................................................4

              Notes to Consolidated Financial Statements..............................................................5

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

   Item 3.    Quantitative and Qualitative Disclosures about Market Risk.............................................21

   Item 4.    Controls and Procedures................................................................................22


PART II       OTHER INFORMATION

   Item 1.    Legal Proceedings......................................................................................23

   Item 6.    Exhibits and Reports on Form 8-K.......................................................................23

Signatures...........................................................................................................24
</TABLE>

Exhibit Index

Certifications
Section 1350 Certification

                                     - 1 -
<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>
                                                                                    June 30, 2004          December 31, 2003
                                                                                 ---------------------   ----------------------

                                     ASSETS
<S>                                                                                 <C>                     <C>
Real estate assets, at cost:
    Land                                                                             $   275,707             $   275,707
    Buildings and improvements                                                           779,556                 779,636
    Real estate related intangible assets                                                 18,283                  19,651
                                                                                 ---------------------   ----------------------
       Total investments in properties                                                 1,073,546               1,074,994
    Less accumulated depreciation and amortization                                      (100,035)                (89,243)
                                                                                 ---------------------   ----------------------
       Net investments in properties                                                     973,511                 985,751
Cash and cash equivalents                                                                  1,857                   4,129
Deferred rent receivable, net of $2,000 allowance
   at June 30, 2004 and December 31, 2003                                                 18,822                  18,970
Investment in unconsolidated joint venture                                                 2,504                   2,285
Other assets (net of accumulated amortization of $6,144 and $4,211
   at June 30, 2004 and December 31, 2003, respectively)                                  21,868                  21,497
                                                                                 ---------------------   ----------------------
       Total assets                                                                   $1,018,562              $1,032,632
                                                                                 =====================   ======================

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
    Line of credit (related parties)                                                 $     1,603             $     6,320
    Revolving line of credit                                                              22,513                  23,965
    Mortgage notes payable                                                               297,250                 299,858
    Mortgage notes payable (related parties)                                              10,594                  10,762
    Interest payable                                                                         330                     332
    Security deposits                                                                      9,900                  10,248
    Deferred rental income                                                                14,181                  12,723
    Dividend/distribution payable                                                         25,076                  25,031
    Accounts payable and accrued expenses                                                  5,647                   5,085
                                                                                 ---------------------   ----------------------
       Total liabilities                                                                 387,094                 394,324

Commitments and contingencies

Minority interests                                                                       517,359                 524,918

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, 18,063,691 and 17,894,691 shares issued and
      outstanding at June 30, 2004 and December 31, 2003, respectively                        18                      18
  Paid-in-capital                                                                        134,196                 132,136
  Accumulated deficit                                                                    (20,105)                (18,764)
                                                                                 ---------------------   ----------------------
     Total stockholders' equity                                                          114,109                 113,390
                                                                                 ---------------------   ----------------------
     Total liabilities and stockholders' equity                                      $ 1,018,562             $ 1,032,632
                                                                                 =====================   ======================
</TABLE>

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

                                     - 2 -
<PAGE>


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

                                                              Three months ended June 30,            Six months ended June 30,
                                                               2004                 2003              2004               2003
                                                                               (As Restated)                         (As Restated)
                                                         ------------------ ------------------- ----------------- ------------------
Revenues:
<S>                                                           <C>                 <C>               <C>                <C>
   Rental revenue from real estate                               $ 29,901            $ 32,722          $ 61,477           $ 64,154
   Tenant reimbursements                                            3,738               4,990             7,956              9,565
   Other income, including lease terminations,
      settlements and interest                                      4,613                 569             5,007              1,303
                                                         ------------------ ------------------- ----------------- ------------------
                                                                   38,252              38,281            74,440             75,022
                                                         ------------------ ------------------- ----------------- ------------------

Expenses:
   Property operating, maintenance and real estate taxes            5,195               5,459            10,696             10,181
   Interest                                                         4,220               4,355             8,583              7,761
   Interest (related parties)                                         252                 257               504                550
   General and administrative                                         885                 322             1,233                679
   Depreciation and amortization of real estate                     5,694               5,067            11,216              9,777
                                                         ------------------ ------------------- ----------------- ------------------
                                                                   16,246              15,460            32,232             28,948
                                                         ------------------ ------------------- ----------------- ------------------

Income before equity in earnings of unconsolidated joint
  venture and minority interests                                   22,006              22,821            42,208             46,074
Equity in earnings of unconsolidated joint venture,
  including $1,400 gain on sale of property acquired
  from related party                                                  627               2,023             1,218              2,759
Minority interests                                                 18,838              20,733            36,108             40,733
                                                         ------------------ ------------------- ----------------- ------------------
   Income from operations                                           3,795               4,111             7,318              8,100
                                                         ------------------ ------------------- ----------------- ------------------

Net income to common stockholders                                $  3,795            $  4,111          $  7,318           $  8,100
                                                         ================== =================== ================= ==================
Net income to minority interests                                 $ 18,838            $ 20,733          $ 36,108           $ 40,733
                                                         ================== =================== ================= ==================
Net income per share to common stockholders:
   Basic                                                         $0.21               $0.23             $0.41              $0.46
                                                         ================== =================== ================= ==================
   Diluted                                                       $0.21               $0.23             $0.40              $0.46
                                                         ================== =================== ================= ==================
Weighted average shares of
  common stock outstanding (basic)                             18,016,356          17,701,999        17,992,886         17,669,808
                                                         ================== =================== ================= ==================
Weighted average shares of
  common stock outstanding (diluted)                           18,079,139          17,762,773        18,075,734         17,728,638
                                                         ================== =================== ================= ==================
</TABLE>

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

                                     - 3 -
<PAGE>


                          MISSION WEST PROPERTIES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (dollars in thousands)
                                   (Unaudited)
                                    ---------

<TABLE>
<CAPTION>
                                                                                                    Six months ended June 30,
                                                                                                    2004                 2003
                                                                                                                    (As Restated)
                                                                                             ------------------- -------------------
Cash flows from operating activities:
<S>                                                                                            <C>                 <C>
     Net income                                                                                 $    7,318          $     8,100
     Adjustments to reconcile net income to net cash provided by operating activities:
            Minority interests                                                                      36,108               40,733
            Depreciation and amortization of real estate                                            11,216                9,777
            Amortization of above market rent intangible asset                                         944                  472
            Equity in earnings of unconsolidated joint venture                                      (1,218)              (2,759)
            Distributions from unconsolidated joint venture                                          1,000                1,000
            Other                                                                                        -                    9
     Changes in operating assets and liabilities, net of liabilities assumed:
            Deferred rent receivable                                                                   148                 (450)
            Other assets                                                                               (21)                 840
            Interest payable                                                                            (2)                  (2)
            Security deposits                                                                         (348)                (520)
            Deferred rental income                                                                   1,458                4,181
            Accounts payable and accrued expenses                                                      644                 (286)
                                                                                             ------------------- -------------------
     Net cash provided by operating activities                                                      57,247               61,095
                                                                                             ------------------- -------------------

Cash flows from investing activities:
     Improvements to real estate assets                                                               (370)                (991)
     Purchase of real estate                                                                             -             (110,008)
     Net proceeds from sale of TBI unconsolidated joint venture real estate                              -                1,400
                                                                                             ------------------- -------------------
     Net cash used in investing activities                                                            (370)            (109,599)
                                                                                             ------------------- -------------------

Cash flows from financing activities:
    Principal payments on mortgage notes payable                                                    (2,608)              (2,709)
    Proceeds from mortgage loan payable                                                                  -              180,000
    Principal payments on mortgage notes payable (related parties)                                    (168)                (155)
    Net payments under line of credit (related parties)                                             (4,619)             (54,607)
    Payment on loan payable                                                                              -              (20,000)
    Payment on revolving line of credit                                                             (1,452)              (5,408)
    Financing costs                                                                                      -                 (863)
    Proceeds from stock options exercised                                                              165                  560
    Minority interest distributions                                                                (41,849)             (41,614)
    Dividends                                                                                       (8,618)              (8,434)
                                                                                             ------------------- -------------------
     Net cash used in financing activities                                                         (59,149)             (46,770)
                                                                                             ------------------- -------------------
     Net decrease in cash and cash equivalents                                                      (2,272)              (1,734)
Cash and cash equivalents, beginning of period                                                       4,129                4,479
                                                                                             ------------------- -------------------
Cash and cash equivalents, ending of period                                                     $    1,857          $     2,745
                                                                                             =================== ===================

Supplemental information:
    Cash paid for interest                                                                      $    8,934          $     8,158
                                                                                             =================== ===================
Supplemental schedule of non-cash investing and financing activities:
    Issuance of common stock upon conversion of O.P units                                       $    1,895          $     1,574
                                                                                             =================== ===================
    Assumption of other liabilities in connection with property acquisition                     $        -          $       783
                                                                                             =================== ===================
    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.

                                     - 4 -
<PAGE>


                          MISSION WEST PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (Dollars in thousands, except share, per share, O.P units and per
                            square footage amounts)
                                   (Unaudited)


     The Company's consolidated financial statements have been prepared pursuant
     to the Securities and Exchange  Commission's ("SEC") rules and regulations.
     The following notes,  which present interim  disclosures as required by the
     SEC, highlight  significant  changes to the notes to the Company's December
     31,  2003  audited  consolidated  financial  statements  and should be read
     together with the financial  statements  and notes thereto  included in the
     Company's Form 10-K. The results of operations for the three and six months
     ended June 30,  2004 are not  necessarily  indicative  of the results to be
     expected for the entire year.

1.   ORGANIZATION AND FORMATION OF THE COMPANY

     Mission  West  Properties,  Inc.  ("the  Company")  is a fully  integrated,
     self-administered  and  self-managed  real estate company that acquires and
     manages R&D/office  properties in the portion of the San Francisco Bay Area
     commonly referred to as Silicon Valley. In July 1998, the Company purchased
     an approximate  12.11% of four existing limited  partnerships  (referred to
     collectively as the "operating partnerships") and obtained control of these
     partnerships  by becoming  the sole general  partner in each one  effective
     July 1, 1998 for financial  accounting and reporting purposes.  The Company
     purchased  an  approximate   12.11%  interest  in  each  of  the  operating
     partnerships.   All  limited   partnership   interests  in  the   operating
     partnerships were converted into 59,479,633 operating  partnership ("O.P.")
     units,  which  represented  a limited  partnership  ownership  interest  of
     approximately   87.89%  of  the  operating   partnerships.   The  operating
     partnerships  are the  vehicles  through  which the Company  holds its real
     estate investments,  makes real estate acquisitions, and generally conducts
     its business.

     On December 30, 1998, the Company was reincorporated  under the laws of the
     State of Maryland  through a merger with and into Mission West  Properties,
     Inc. Accordingly,  shares of the former company, Mission West Properties, a
     California  corporation  (no par),  which were  outstanding at December 30,
     1998,  were  converted  into  shares of common  stock  ($.001 par value per
     share) on a one-for-one basis.

     As of June 30,  2004,  the Company owns a general  partnership  interest of
     17.11%, 21.63%, 16.12% and 12.38% in Mission West Properties, L.P., Mission
     West Properties,  L.P. I, Mission West Properties, L.P. II and Mission West
     Properties,  L.P.  III,  respectively,  for a  17.29%  general  partnership
     interest in the  operating  partnerships,  taken as a whole,  on a weighted
     average basis.

     Through the operating  partnerships,  the Company owns interests in 109 R&D
     properties, all of which are located in Silicon Valley.

     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 and six months
     ended June 30, 2004.

     BUSINESS SEGMENT INFORMATION
     The  Company's   primary  business  is  the  ownership  and  management  of
     R&D/office  real  estate  with a  geographic  concentration  in the Silicon
     Valley  of the  San  Francisco  Bay  Area.  Accordingly,  the  Company  has
     concluded it  currently  has a single  reportable  segment for SFAS No. 131
     purposes.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     PRINCIPLES OF CONSOLIDATION AND FINANCIAL STATEMENT PRESENTATION
     The accompanying  consolidated financial statements include the accounts of
     Mission West Properties,  Inc. and its controlled  subsidiaries,  including
     the operating partnerships. All significant intercompany balances have been
     eliminated in consolidation.  The consolidated  financial  statements as of
     and for the three and six months  ended June 30,  2004 and 2003 and related
     footnote  disclosures  are unaudited.  In the opinion of  management,  such
     financial   statements  reflect  all  adjustments   necessary  for  a  fair
     presentation of the results of the interim  periods.  All such  adjustments
     are of a normal recurring nature.

     USE OF ESTIMATES
     The Company  prepares the consolidated  financial  statements in conformity
     with  accounting  principles  generally  accepted  in the United  States of
     America ("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. Accounting and disclosure decisions with
     respect to material transactions that are subject to significant management
     judgments or estimates  include  impairment of long lived assets,  deferred
     rent  reserves,  and  allocation  of  purchase  price  relating to property
     acquisitions and the related depreciable lives assigned. Actual results may
     differ from these estimates under different assumptions or conditions.

                                     - 5 -

<PAGE>


     MINORITY INTERESTS
     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 June 30,  2004.  Minority
     interest  in net  income  is  calculated  by taking  the net  income of the
     operating   partnerships  (on  a  stand-alone   basis)  multiplied  by  the
     respective minority interest ownership percentage.

     RECLASSIFICATIONS
     Certain  reclassifications  have been made to the previously  reported 2003
     statements in order to conform to the 2004 presentation.

     ACCOUNTING FOR STOCK-BASED COMPENSATION
     SFAS No. 123, "Accounting for Stock-Based  Compensation,"  encourages,  but
     does not require  companies  to record  compensation  cost for  stock-based
     employee  compensation  plans at fair  value.  The  Company  has  chosen to
     continue to account for stock-based  compensation using the intrinsic value
     method  prescribed in Accounting  Principles  Board Opinion ("APB") No. 25,
     "Accounting  for Stock Issued to  Employees"  and related  interpretations.
     Accordingly, compensation cost for stock options is measured as the excess,
     if any, of the quoted  market price of the  Company's  stock at the date of
     the grant over the amount an employee must pay to acquire the stock.

     The  following  table   illustrates  the  unaudited  pro  forma  effect  on
     consolidated net income  available to common  shareholders and consolidated
     earnings  per  share if the fair  value  method  had  been  applied  to all
     outstanding  and unvested  stock options for the three and six months ended
     June 30, 2004 and 2003.
<TABLE>
<CAPTION>

                                                               Three Months Ended June 30,         Six Months Ended June 30,
                                                                 2004             2003              2004             2003
                                                                             (As Restated)                      (As Restated)
                                                            ---------------  ---------------   ---------------  ---------------
                                                                         (dollars in thousands, except per share data)
<S>                                                             <C>              <C>               <C>              <C>
           Historical net income to common stockholders          $3,795           $4,111            $7,318           $8,100
           Deduct compensation expense for stock options
              determined under fair value based method              (44)             (59)              (88)            (117)
           Allocation of expense to minority interest                36               49                73               94
                                                            ---------------  ---------------   ---------------  ---------------
           Pro forma net income to common stockholders
                                                                 $3,787           $4,101            $7,303           $8,077
                                                            ===============  ===============   ===============  ===============

           Earnings per share - basic:
           Historical net income to common stockholders          $0.21            $0.23             $0.41            $0.46
           Pro forma net income to common stockholders           $0.21            $0.23             $0.41            $0.46
           Earnings per share - diluted:
           Historical net income to common stockholders          $0.21            $0.23             $0.40            $0.46
           Pro forma net income to common stockholders           $0.21            $0.23             $0.40            $0.46
</TABLE>

     No stock options were granted during the first six months of 2004.

3.   STOCK TRANSACTIONS

     During the six months ended June 30, 2004, stock options to purchase 20,000
     shares of common stock were exercised at $8.25 per share. Total proceeds to
     the Company were approximately $165. In 2004, one limited partner exchanged
     100,000 O.P. units for 100,000  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.  In 2004, Carl E.
     Berg gave 49,000 O.P. units to charitable  institutions that exchanged them
     for 49,000  shares of the Company's  common stock  pursuant to the December
     1998 Exchange Rights Agreement.

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.

                                     - 6 -

<PAGE>


     The computation for weighted average shares is detailed below:

<TABLE>
<CAPTION>
                                                              Three Months Ended June 30,             Six Months Ended June 30,
                                                                 2004              2003               2004               2003
                                                           ---------------    --------------     --------------    ---------------
<S>                                                          <C>               <C>                <C>                <C>
         Weighted average shares outstanding (basic)          18,016,356        17,701,999         17,992,886         17,669,808
         Incremental shares from assumed option exercise          62,783            60,774             82,848             58,830
                                                           ---------------    --------------     --------------    ---------------
         Weighted average shares outstanding (diluted)        18,079,139        17,762,773         18,075,734         17,728,638
                                                           ===============    ==============     ==============    ===============
</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  calculation  after adding
     the  minority  interests'  share of income  back to net  income.  The total
     number of O.P.  units  outstanding at June 30, 2004 and 2003 was 86,418,195
     and 86,498,064, respectively.

5.   RELATED PARTY TRANSACTIONS

     As of June 30, 2004, the Berg Group owned  77,586,528 O.P. units.  The Berg
     Group's ownership as of June 30, 2004 represented  approximately 74% of the
     equity  interests,   assuming  conversion  of  the  86,418,195  O.P.  units
     outstanding into the Company's common stock.

     The Berg Group  $20,000 line of credit bears  interest at LIBOR plus 1.30%,
     which was 3.24% as of June 30, 2004, and matures in March 2005. The Company
     believes that the terms of the Berg Group line of credit are more favorable
     than those available from commercial  lenders. As of June 30, 2004, debt in
     the amount of $1,603 was due the Berg Group  under the line of credit,  and
     debt in the amount of $10,594 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 June
     2010 with  principal  payments  amortized over 20 years.  Interest  expense
     incurred in connection with the Berg Group line of credit and mortgage note
     was $252 and  $257 for the  three  months  ended  June 30,  2004 and  2003,
     respectively,  and $504 and $550 for the six months ended June 30, 2004 and
     2003, respectively.

     During  the first six  months  of June 30,  2004 and 2003,  Carl E. Berg or
     entities  controlled  by Mr.  Berg  have  financial  interests  in  several
     companies that lease space from the operating  partnerships,  which include
     three companies  where Mr. Berg has a greater than 10% ownership  interest.
     These  related  tenants  occupy   approximately   48,000  square  feet  and
     contributed  $217 and $232 in rental  revenue during the first three months
     of 2004 and 2003, respectively,  and $433 and $471 in rental revenue during
     the first six months of 2004 and 2003,  respectively.  Under the  Company's
     charter,  bylaws and agreements with the Berg Group, the individual members
     of the Berg Group are  prohibited  from  acquiring  shares of the Company's
     common stock if such acquisition would result in their beneficial ownership
     percentage  of the  Company's  common stock  causing it to violate any REIT
     qualification requirement.

     The Berg Group has an approximately  $2,500  commitment to complete certain
     tenant  improvements in connection  with the Company's 2002  acquisition of
     5345 Hellyer Avenue in San Jose.  The Company  recorded this portion of its
     purchase  consideration  paid to the Berg  Group  as an Other  Asset on its
     Consolidated   Balance  Sheets.  The  Berg  Group  plans  to  satisfy  this
     commitment to complete  certain tenant  improvements  when requested by the
     Company following the approval of the Independent Directors Committee.

     The Berg  Group has an  approximately  $7,500  commitment  to  complete  an
     approximately  75,000 to 90,000 square foot building in connection with the
     Company's 2001  acquisition of 245 Caspian in Sunnyvale  which is comprised
     of approximately  three acres of unimproved land. The Company recorded this
     portion of its  purchase  consideration  paid to the Berg Group as an Other
     Asset on its Consolidated  Balance Sheets.  The Berg Group plans to satisfy
     this  commitment  to  construct a building  when  requested  by the Company
     following the approval of the Independent Directors Committee.

     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 June 30, 2004 and 2003 and $45 for
     each of the six-month periods ended June 30, 2004 and 2003.

     In January 2003, the Company  acquired a 50% interest in an  unconsolidated
     joint  venture  from the Berg  Group  under the Berg Land  Holdings  Option
     Agreement  for $1,800.  The Company  financed this  acquisition  by issuing
     181,032 O.P. units to various members of the Berg Group. In April 2003, the
     Company, through the joint venture, acquired a property from the Berg Group
     under the Berg Land Holdings  Agreement  and sold it to an unrelated  third
     party.  The  Company  received a net  distribution  and  recorded a gain of
     $1,400 from the sale.

6.   COMMITMENTS AND CONTINGENCIES

     Neither the  operating  partnerships,  the  properties  nor the Company are
     subject to any material litigation nor, to the Company's knowledge,  is any
     material  litigation  threatened  against the operating  partnerships,  the
     properties  or the  Company.  From time to time,  the Company is engaged in
     legal proceedings  arising in the ordinary course of business.  The Company
     does not expect any of such  proceedings to have a material  adverse effect
     on its cash  flows,  financial  condition  or  results of  operations.  The
     Company is

                                     - 7 -
<PAGE>

     currently  involved  in or  has  recently  concluded  the  following  legal
     proceedings,  which it believes the ultimate  outcome will have no material
     adverse effect on its consolidated financial statements.

     Republic Properties  Corporation  ("RPC") v. Mission West Properties,  L.P.
     ("MWP"),  in the Circuit  Court of  Maryland  for  Baltimore  City Case No.
     24-C-00-005675.  RPC is a former partner with Mission West Properties, L.P.
     in the Hellyer Avenue Limited Partnership ("Hellyer LP"). In April 2004 the
     Circuit Court for Baltimore City,  Maryland issued a Memorandum  Opinion in
     the case and awarded damages of  approximately  $934 to the RPC plaintiffs,
     which must be paid by the Company or MWP.  The court denied all requests by
     MWP,  including a  declaration  that all of RPC's  interests in Heller L.P.
     were validly converted to limited partnership  interests and transferred to
     MWP or its  designee  in  accordance  with the  terms of the  Hellyer  L.P.
     partnership  agreement.   The  court  also  denied  RPC's  request  for  an
     injunction  ordering the  reinstatement of RPC's  partnership  interests in
     Hellyer L.P. The Company has appealed the decision to the Maryland  Appeals
     Court. Under the pre-appeal hearing procedures,  the Maryland Appeals Court
     requires a  mediation  hearing  before the  parties  can appear  before the
     Appeals  Court.  No date has been set for such a hearing.  The Company does
     not believe that any further court  decisions in this case,  for or against
     it and MWP,  will  have a  material  adverse  effect on its  business.  The
     Company  has a  receivable  from a Berg Group  affiliate  for the amount of
     distributions it received as the successor to RPC's interest in the Hellyer
     LP which  exceeds the amount of the damages  awarded to the RPC parties and
     would be used to pay for those  damages  in the event the  decision  of the
     Circuit  Court is upheld  ultimately.  Furthermore,  the  Company has never
     accounted  for the 50% interest of RPC as its asset and if RPC is deemed to
     have  retained that interest or  reacquires  that  interest,  the Company's
     balance sheet and financial  condition  would not be impacted.  In February
     2001,  the Company filed a suit against RPC in Superior  Court of the State
     of  California  for the County of Santa Clara Case No. CV 796249  which has
     been stayed  pending  resolution of the Maryland  case.  In July 2004,  RPC
     attached the Company's bank account for approximately  $1,100.  Following a
     July 2004  hearing in  Superior  Court of the State of  California  for the
     County of Santa  Clara,  the parties  agreed  that the Company  will post a
     $1,500  bond and RPC will  remove  the  attachment  of the  Company's  bank
     account until final resolution of the appeal in Maryland.

     In January 2004, the Global Crossing Estate Representative,  for Itself and
     the Liquidating Trustee of the Global Crossing Liquidating Trust v. Mission
     West Properties filed an action in United States  Bankruptcy Court Southern
     District of New York Case No.  02-40188  (REG)  asserting  that payments of
     approximately  $815 made in the ordinary  course of business within 90 days
     of the Global  Crossing  bankruptcy  filing were preference  payments.  The
     Company has engaged legal counsel to defend itself in this claim and intend
     to vigorously contest the matter.

     In December 2003, Craig R. Jalbert  Liquidating CEO, as  representative  of
     the  Estate  of the  Consolidated  Debtors  for ACT  Manufacturing,  Inc v.
     Mission West Properties,  L.P. filed an action in United States  Bankruptcy
     Court District of  Massachusetts  Case No.  01-47641  (JBR)  asserting that
     payments  of  approximately  $482 made in the  ordinary  course of business
     within 90 days of the ACT bankruptcy filing were preference  payments.  The
     Company has engaged legal counsel to defend itself in this claim and intend
     to vigorously contest the matter.

     GUARANTEES
     Under its certificate of incorporation  and bylaws,  the Company has agreed
     to indemnify its officers and directors for certain  events or  occurrences
     arising as a result of the officer or director's  serving in such capacity.
     The  maximum  potential  amount of future  payments  the  Company  could be
     required to make under these indemnification  agreements is unlimited.  The
     Company  believes  the  estimated  fair  value  of  these   indemnification
     agreements is minimal and has no liabilities  recorded for these agreements
     as of June 30, 2004.

     The  Company  also  enters into  indemnification  provisions  under (i) its
     agreements  with  other  companies  in its  ordinary  course  of  business,
     typically with lenders, joint venture partners,  contractors,  and tenants.
     Under these provisions the Company generally indemnifies and holds harmless
     the  indemnified  party for losses  suffered or incurred by the indemnified
     party  as a  result  of the  Company's  activities.  These  indemnification
     provisions generally survive termination of the underlying  agreement.  The
     maximum  potential  amount of future payments the Company could be required
     to make under these  indemnification  provisions is unlimited.  The Company
     has not incurred material costs to defend lawsuits or settle claims related
     to these indemnification  agreements. As a result, the Company believes the
     estimated  fair value of these  agreements  is  minimal.  Accordingly,  the
     Company has no  liabilities  recorded for these  agreements  as of June 30,
     2004.

     SEISMIC ACTIVITY
     The Company's  properties  are located in an active seismic area of Silicon
     Valley. Insurance policies currently maintained by the Company do not cover
     seismic  activity,  although  they do  cover  losses  from  fires  after an
     earthquake.

     ENVIRONMENTAL ISSUES
     The environmental  investigations that have been conducted on the Company's
     properties have not revealed any  environmental  liability that it believes
     would have a material adverse effect on its financial condition, results of
     operations  and  assets,  and  it is  not  aware  of  any  such  liability.
     Nonetheless,   it  is  possible  that  there  are  material   environmental
     liabilities of which the Company is unaware. The Company cannot assure that
     future  laws,  ordinances,  or  regulations  will not impose  any  material
     environmental liability, or that the current environmental condition of the
     properties has not been, or will not be,  affected by tenants and occupants
     of the  properties,  by the  condition of properties in the vicinity of the
     properties, or by third parties unrelated to the Company.

                                     - 8 -

<PAGE>


7.   RESTATEMENTS

     The Company has restated its previously reported quarterly  information for
     the three and six months  ended June 30, 2003.  The  restated  consolidated
     financial  statements  were  reported  and  are  further  discussed  in the
     Company's 2003 Form 10-K filed on July 30, 2004. The items that the Company
     restated for are as follows:

     -    The  Company  recorded  additional  amortization  expense  relating to
          certain leasing  commissions,  which were  originally  being amortized
          over a 40-year period.  The additional  amortization  expense resulted
          from changing the amortization  period of commissions from 40 years to
          the term of the lease and the write-off of certain unamortized leasing
          commissions in connection with tenant bankruptcies.
     -    The Company corrected the purchase  accounting  originally  applied to
          its 2002 acquisition of the  Orchard-Trimble  property.  In accordance
          with  Statement  of  Financial  Accounting  Standards  (SFAS) No. 141,
          Business  Combinations,  which  became  effective  July 1,  2001,  the
          Company  allocated a portion of the purchase  price to in-place  lease
          intangible assets and recorded  additional  amortization  expense from
          changing the amortization  period of these  intangible  assets from 40
          years to the term of the lease.
     -    The Company recorded additional  depreciation  expense relating to the
          reclassification   of  certain  real  estate  assets  from  a  40-year
          depreciable life to a 7- and 25-year depreciable life.
     -    The Company  reclassified the  amortization of the above-market  lease
          intangible  asset  relating to the 2003  acquisition of the San Thomas
          Technology  Park  from  amortization  expense  to an  offset to rental
          revenue from real estate.

     The  aggregate  net  impact  of all  restatement  items  on  the  Company's
     Consolidated  Statements of  Operations  for the three and six months ended
     June 30, 2003  resulted in a decrease in net income to common  stockholders
     compared to previously  reported  amounts of $45 ($0.00 per diluted  share)
     and $90  ($0.00  per  diluted  share),  respectively.  The  effects  of the
     restatement  items  described  above on the  Company's net income to common
     stockholders  for the  three  and six  months  ended  June 30,  2003 are as
     follows:



<TABLE>
<CAPTION>
                                                                Three Months Ended    Six Months Ended
                                                                   June 30, 2003       June 30, 2003
                                                               -------------------- -------------------
                                                                        (dollars in thousands)
<S>                                                                <C>                  <C>
     Net income to common stockholders, as previously reported      $4,156               $8,190
     Impact of adjustments for:
          Leasing commission amortization                             (128)                (256)
          Intangible asset amortization                               (137)                (274)
          Depreciation of real estate assets                            (5)                 (14)
                                                               -------------------- -------------------
     Total adjustments                                                (270)                (544)
                                                               -------------------- -------------------

     Minority interest portion of adjustments                          225                  454

                                                               -------------------- -------------------
     Net income to common stockholders, as restated                 $4,111               $8,100
                                                               ==================== ===================
</TABLE>

8.   SUBSEQUENT EVENTS

     On May 10, 2004, the audit committee appointed BDO Seidman,  LLP ("BDO") as
     the  Company's  new  independent   registered  accounting  firm.  Upon  the
     appointment  of BDO,  the  American  Stock  Exchange  ("AMEX")  granted the
     Company an  extension  to comply with their  listing  standards.  To become
     compliant with the AMEX continued listing standards,  the Company must file
     its quarterly reports on Form 10-Q for the first and second quarter of 2004
     as soon as practicable  following the July 30, 2004 filing of its Form 10-K
     for 2003, but no later than August 16, 2004.

     On July 8, 2004,  the Company  paid  dividends of $0.24 per share of common
     stock to all common stockholders of record as of June 30, 2004. On the same
     date, the operating partnerships paid a distribution of $0.24 per O.P. unit
     to all holders of O.P. units.

     In July 2004,  a $40,000  loan with  Cupertino  National  Bank  ("CNB") was
     scheduled to mature.  CNB has granted an extension  until September 2, 2004
     pending the  completion of the Company's  Form 10-K filing for 2003,  which
     was filed on July 30, 2004. The Company is in the process of  renegotiating
     the terms and extending the $40,000 loan for an additional two-year period.
     The  Company  does not  believe  that the terms of the  extended  loan will
     differ materially from its current terms.

                                     - 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 our  consolidated
financial  statements  and notes thereto  contained in our Annual Report on Form
10-K as of and for the year ended  December 31, 2003.  The results for the three
and six months ended June 30, 2004 are not necessarily indicative of the results
to be  expected  for the entire  fiscal  year  ending  December  31,  2004.  The
following  discussion  includes  forward-looking  statements,  including but not
limited  to,  statements  with  respect  to our  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 under the sub-heading, "Forward-Looking Information."

FORWARD-LOOKING INFORMATION

This quarterly report contains forward-looking  statements within the meaning of
the federal  securities  laws. We intend 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.  Our 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 our operations and future
prospects include, but are not limited to, the following:

-    economic conditions generally and the real estate market specifically,
-    legislative or regulatory  provisions  (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 our
     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 we  believe  we may  acquire  in the  future  under the Berg Land
Holdings  Option  Agreement is  presently  unknown,  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 our
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.

OVERVIEW

We acquire,  market, lease, and manage R&D/office properties,  primarily located
in the Silicon  Valley  portion of the San  Francisco  Bay Area.  As of June 30,
2004, we owned and managed 109  properties  totaling  approximately  7.9 million
rentable   square  feet  through  four   limited   partnerships,   or  operating
partnerships,  for which we are 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. We believe
that we have one of the  largest  portfolios  of  R&D/office  properties  in the
Silicon  Valley.  As of June 30, 2004, the six tenants who each leased in excess
of 300,000  rentable  square feet from us were  Microsoft  Corporation,  Fujitsu
America (a  subsidiary  of  Fujitsu  Limited),  JDS  Uniphase  Corporation,  NEC
Electronics America, Inc. (a subsidiary of NEC Electronics  Corporation),  Ciena
Corporation  and Apple Computer,  Inc. For federal income tax purposes,  we have
operated as a self-managed,  self-administered  and fully integrated real estate
investment trust ("REIT") since fiscal 1999.

Our  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 we 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/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/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

                                     - 10 -
<PAGE>

-    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.


CURRENT ECONOMIC ENVIRONMENT

All of our  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  have 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  22.5% in late 2003 to
23% at the end of the second  quarter 2004.  Total vacant R&D square  footage in
Silicon Valley at the end of the second quarter of 2004 amounted to 35.5 million
square feet, of which 28.2%,  or 10 million square feet, was being offered under
subleases.  Total  negative net  absorption  (which is the  computation of gross
square  footage  leased  less gross new square  footage  vacated  for the period
presented) in 2003 amounted to approximately  (3.0) million square feet.  During
the  first six  months of 2004,  there was  total  negative  net  absorption  of
approximately (0.7) million square feet. The impact of the rental market 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 by  submarket  and  location  within each
submarket.

Our physical  occupancy rate at June 30, 2004 was 71.6%,  which is a significant
decline from the  occupancy  rate of 80.2% at June 30, 2003. We believe that our
physical  occupancy rate could decline further going forward if key tenants seek
the  protection  of  bankruptcy  laws,  consolidate  operations  or  discontinue
operations.  In addition,  leases with respect to approximately 210,000 rentable
square feet are expiring  prior to the end of 2004.  The  properties  subject to
these leases may take  anywhere  from 12 to 18 months or longer to re-lease.  We
believe that the average 2004 renewal  rental rates for our  properties  will be
approximately  equal to, or perhaps,  below current  rents.  If we are unable to
lease a  significant  portion of any vacant  space or space  subject to expiring
leases; if we experience  significant tenant defaults as a result of the current
economic  downturn;  or if we are not  able to lease  space at or above  current
market  rates,  our  results of  operations  and cash  flows  will be  adversely
affected.  Our 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"  above and in the section entitled "Risk Factors"
in our most recent annual report on Form 10-K.

IMPACT OF RESTATEMENTS

We have restated our previously reported quarterly information for the three and
six months ended June 30, 2003. The restated  consolidated  financial statements
were reported and are further  discussed in our 2003 Form 10-K filed on July 30,
2004. The items that we restated for are as follows:

-    We recorded  additional  amortization  expense  relating to certain leasing
     commissions,  which were originally  being amortized over a 40-year period.
     The additional amortization expense resulted from changing the amortization
     period  of  commissions  from 40  years to the  term of the  lease  and the
     write-off of certain  unamortized  leasing  commissions in connection  with
     tenant bankruptcies.
-    We  corrected  the  purchase  accounting  originally  applied  to our  2002
     acquisition of the Orchard-Trimble  property.  In accordance with Statement
     of Financial  Accounting  Standards (SFAS) No. 141, Business  Combinations,
     which became effective July 1, 2001, we allocated a portion of the purchase
     price  to  in-place  lease  intangible   assets  and  recorded   additional
     amortization  expense  from  changing  the  amortization  period  of  these
     intangible assets from 40 years to the term of the lease.
-    We   recorded   additional    depreciation    expense   relating   to   the
     reclassification  of certain real estate assets from a 40-year  depreciable
     life to a 7- and 25-year depreciable life.
-    We reclassified the amortization of the above-market lease intangible asset
     relating to the 2003  acquisition  of the San Thomas  Technology  Park from
     amortization expense to an offset to rental revenue from real estate.

The aggregate net impact of all restatement items on our Consolidated Statements
of  Operations  for the three and six months  ended June 30, 2003  resulted in a
decrease in net income to common  stockholders  compared to previously  reported
amounts of $45,000  ($0.00 per  diluted  share) and  $90,000  ($0.00 per diluted
share), respectively.

                                     - 11 -

<PAGE>


The effects of the restatement items described above on our net income to common
stockholders for the three and six months ended June 30, 2003 are as follows:


<TABLE>
<CAPTION>

                                                                Three Months Ended    Six Months Ended
                                                                   June 30, 2003       June 30, 2003
                                                               -------------------- -------------------
                                                                        (dollars in thousands)
<S>                                                                 <C>                  <C>
Net income to common stockholders, as previously reported            $4,156               $8,190
Impact of adjustments for:
     Leasing commission amortization                                   (128)                (256)
     Intangible asset amortization                                     (137)                (274)
     Depreciation of real estate assets                                  (5)                 (14)
                                                               -------------------- -------------------
Total adjustments                                                      (270)                (544)
                                                               -------------------- -------------------

Minority interest portion of adjustments                                225                  454

                                                               -------------------- -------------------
Net income to common stockholders, as restated                       $4,111               $8,100
                                                               ==================== ===================
</TABLE>

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

We prepare the consolidated  financial  statements in conformity with accounting
principles  generally  accepted in the United States of America ("GAAP"),  which
requires us 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.
Accounting and disclosure  decisions with respect to material  transactions that
are subject to significant  management judgments or estimates include impairment
of long lived assets,  deferred rent reserves,  and allocation of purchase price
relating to property  acquisitions and the related  depreciable  lives assigned.
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.  We believe that
the following best describe our critical accounting policies:

BUSINESS  COMBINATIONS.  Statement of  financial  Accounting  Standards  No. 141
("SFAS No.  141"),  Business  Combinations,  was  effective  July 1,  2001.  The
acquisition costs of each property acquired prior to July 1, 2001were  allocated
only to building,  land and leasing commissions with building depreciation being
computed  based on an estimated  weighted  average  composite  useful life of 40
years and leasing  commissions  amortization being computed over the term of the
lease.  Acquisitions of properties made subsequent to the effective date of SFAS
No. 141 are based on an allocation of the  acquisition  cost to land,  building,
tenant  improvements,  and  intangibles  for at market and above market in place
leases,  and the determination of their useful lives are guided by a combination
SFAS No. 141 and management's  estimates.  If we do not  appropriately  allocate
these  components  or  we  incorrectly   estimate  the  useful  lives  of  these
components,  our computation of depreciation  and  amortization  expense may not
appropriately  reflect the actual  impact of these  costs over  future  periods,
which will affect net income.

IMPAIRMENT OF  LONG-LIVED  ASSETS.  We review real estate assets for  impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be  recoverable  in  accordance  with  Statement  of  Financial
Accounting Standards No. 144 ("SFAS No. 144"), Accounting for the Impairment and
Disposal of Long-Lived  Assets.  If the carrying amount of the asset exceeds its
estimated  undiscounted  net cash flow,  before  interest,  we will recognize an
impairment  loss equal to the  difference  between its  carrying  amount and its
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 factors,
such as the vacancy  rates,  future  rental  rates and  operating  costs for R&D
facilities in the Silicon Valley area and related submarkets.  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. To date we have not recognized an impairment of any long-lived assets.

ALLOWANCE  FOR DOUBTFUL  ACCOUNTS  AND DEFERRED  RENT.  The  preparation  of the
consolidated financial statements requires us to make estimates and assumptions.
As  such,  we  must  make  estimates  of the  uncollectability  of our  accounts
receivable based on the evaluation of our tenants' financial position,  analyses
of accounts receivable and current economic trends. We also make estimates for a
straight-line  adjustment  reserve for existing  tenants  with the  potential of
early termination,  bankruptcy or ceasing operations. Our estimates are based on
our  review  of  tenants'  payment  histories,   publicly  available   financial
information and such additional  information about their financial  condition as
tenants  provide  to us.  The  information  available  to us  might  lead  us 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 our
estimates.

                                     - 12 -
<PAGE>

CONSOLIDATED  JOINT VENTURES.  We, through an operating  partnership,  own three
properties that are in joint ventures of which we have controlling interests. We
manage and operate all three properties. The recognition of these properties and
their  operating  results  are  100%  reflected  on our  consolidated  financial
statements,  with appropriate  allocation to minority interest,  because we have
operational  and financial  control of the  investments.  We make  judgments and
assumptions  about the estimated  monthly payments made to our minority interest
joint  venture  partners,  which  are  reported  with our  periodic  results  of
operations.  Actual  results may differ  from these  estimates  under  different
assumptions or conditions.

INVESTMENT  IN   UNCONSOLIDATED   JOINT   VENTURE.   We,  through  an  operating
partnership,  have a 50%  non-controlling  limited  partnership  interest in one
unconsolidated joint venture. This investment is not consolidated because the we
do  not  exercise   significant  control  over  major  operating  and  financial
decisions.  We  account  for the  joint  venture  using  the  equity  method  of
accounting.

FAIR VALUE OF FINANCIAL INSTRUMENTS.  Our financial instruments include cash and
cash equivalents,  accounts receivable, accounts payable, and debt. Considerable
judgment is required in  interpreting  market data to develop  estimates of fair
value.  These estimates  presented herein are not necessarily  indicative of the
amounts that we could realize in a current market exchange. The use of different
market assumptions and/or estimation methodologies may have a material effect on
the  estimated  fair  value  amounts.   Cash  and  cash  equivalents,   accounts
receivable,  and accounts payable are carried at amounts that approximate  their
fair values due to their  short-term  maturities.  The  carrying  amounts of our
variable  rate debt  approximate  fair value since the  interest  rates on these
instruments  are  equivalent  to rates  currently  offered to us. For fixed rate
debt, we estimate  fair value by using  discounted  cash flow analyses  based on
borrowing rates for similar kinds of borrowing  arrangements.  The fair value of
our fixed rate debt at June 30, 2004 was approximately $241 million.

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,  regardless of when the rent payments are
received by us. The difference  between recognized rental income and rental cash
receipts is recorded as Deferred  Rent  Receivable on the  consolidated  balance
sheets.

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.
We try to  identify  tenants  who may be likely to declare  bankruptcy  or cease
operations.  By anticipating these events in advance, we expect to take steps to
minimize  their  impact on our  reported  results of  operations  through  lease
renegotiations,  reserves against deferred rent, and other appropriate measures.
Our 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 we made different judgments or estimations.

Lease  termination  fees are  included in other  income.  These fees are paid by
tenants  who want to  terminate  their lease  obligations  before the end of the
contractual term of the lease.  There is no way of predicting or forecasting the
timing or amounts of future lease termination fees.

We recognize income from rent, tenant  reimbursements and lease termination fees
and other income once all of the following  criteria are met in accordance  with
SEC Staff Accounting Bulletin 104:

-    the agreement has been fully executed and delivered;
-    services have been rendered;
-    the amount is fixed and determinable; and
-    collectability is reasonably assured.

                                     - 13 -
<PAGE>


RESULTS OF OPERATIONS

COMPARISON  OF THE THREE AND SIX MONTHS ENDED JUNE 30, 2004 TO THE THREE AND SIX
MONTHS ENDED JUNE 30, 2003

As of  June  30,  2004,  through  our  controlling  interests  in the  operating
partnerships,  we  owned  109  properties  totaling  approximately  7.9  million
rentable  square feet  compared to 108  properties  totaling  approximately  7.8
million  rentable square feet owned by us as of June 30, 2003. This represents a
net increase of  approximately  1% in total rentable  square  footage,  which is
primarily  attributable  to our  acquisition  in December  2003 of one  property
located in San Jose,  California  consisting of  approximately  129,000 rentable
square feet from the Berg Group.

Rental revenue from real estate for the three and six months ended June 30, 2004
compared to the three- and six-month periods in 2003 are as follows:

<TABLE>
<CAPTION>
                              Three Months Ended June 30,
                                                                                      % Change by         % of Total Net
                                2004               2003             $ Change         Property Group           Change
                            --------------     --------------     --------------     ---------------     -----------------
                                          (dollars in thousands)
<S>                           <C>                <C>               <C>                  <C>                  <C>
   Same Property (1)           $26,983            $30,259           ($3,276)             (10.8%)              (10.0%)
   2003 Acquisitions (2)         2,918              2,463               455               18.5%                 1.4%
                            --------------     --------------     --------------                         -----------------
                               $29,901            $32,722           ($2,821)              (8.6%)               (8.6%)
                            ==============     ==============     ==============                         =================



                               Six Months Ended June 30,
                                                                                      % Change by         % of Total Net
                                2004               2003             $ Change         Property Group           Change
                            --------------     --------------     --------------     ---------------     -----------------
                                          (dollars in thousands)
   Same Property (1)           $55,641            $61,690           ($6,049)              (9.8%)               (9.4%)
   2003 Acquisitions (2)         5,836              2,464             3,372                137%                 5.2%

                            --------------     --------------     --------------                         -----------------
                               $61,477            $64,154           ($2,677)              (4.2%)               (4.2%)
                            ==============     ==============     ==============                         =================
</TABLE>


(1)  "Same Property" is defined as properties  owned by us prior to 2003 that we
     still owned as of June 30, 2004.
(2)  Operating rental revenue for 2003  Acquisitions  does not reflect a full 12
     months of  operations  in 2003 because  these  properties  were acquired at
     various  times during 2003.  2003  acquisition  amount for the three months
     ended June 30, 2004 and 2003 each  includes  approximately  $0.5 million of
     above market rent  amortization  against rental revenue from real estate in
     connection with the implementation of SFAS No. 141. 2003 acquisition amount
     for the six months ended June 30, 2004 and 2003 includes approximately $0.9
     million and $0.5 million,  respectively,  of above market rent amortization
     against   rental   revenue  from  real  estate  in   connection   with  the
     implementation of SFAS No. 141.

RENTAL REVENUE FROM REAL ESTATE
For the quarter ended June 30, 2004,  rental revenue from real estate  decreased
by  approximately  ($2.8)  million,  or 8.6%,  from $32.7  million for the three
months ended June 30, 2003 to $29.9 million for the same period of 2004. The net
decrease  resulted  from a decline  of  ($3.3)  million  in our "Same  Property"
portfolio  and an increase of $0.5  million  from  properties  acquired in 2003.
Rental revenue  decreased by approximately  ($2.7) million,  or 4.2%, from $64.2
million  for the six months  ended June 30,  2003 to $61.5  million for the same
period of 2004. Of the ($2.7) million decrease in rental revenue, ($6.0) million
resulted from our "Same  Property"  portfolio and $3.3 million were generated by
properties  acquired in 2003. The overall decline in rental revenue was a result
of  adverse  market  conditions  and the loss of  several  tenants  due to their
bankruptcy,  relocation  or cessation  of  operations  since June 30, 2003.  Our
physical  occupancy  rate at June 30, 2004 was  approximately  72%,  compared to
approximately 80% at June 30, 2003.

EQUITY IN EARNINGS FROM UNCONSOLIDATED JOINT VENTURE
As of June 30, 2004, we had investments in four R&D buildings,  totaling 593,000
rentable square feet, through an unconsolidated joint venture, TBI-MSW, which we
acquired a 50%  interest in January 2003 from the Berg Group under the Berg Land
Holdings  Option  Agreement.  We  have  a  non-controlling  limited  partnership
interest in this joint venture,  which we account for using the equity method of
accounting.  For the three  months ended June 30,  2004,  we recorded  equity in
earnings from the  unconsolidated  joint venture of  approximately  $0.6 million
compared to $2.0 million for the same period in 2003. For the six-month  periods
ended June 30, 2004 and 2003, equity in earnings from the  unconsolidated  joint
venture was approximately $1.2 million and $2.8 million, respectively.  Included
in equity in  earnings  of  unconsolidated  joint  venture  for the  three-  and
six-month  periods  ended June 30, 2003 is $1.4 million  relating to a gain from
the sale of real  estate.  Our  interest  in the  property  was  acquired by the
unconsolidated  joint venture from a related party. This type of transaction did
not recur in 2004.

OTHER INCOME
Other income increased to approximately  $4.6 million for the three months ended
June 30,  2004 from $0.6  million  for the second  quarter of 2003.  For the six
months  ended June 30,  2004 and 2003,  other  income was $5.0  million and $1.3
million, respectively.  Lease termination fees of approximately $2.6 million and
tenant bankruptcy  settlement income of approximately  $1.1 million  represented
most of the 2004 increase. We do not consider these transactions to be recurring
items.

                                     - 14 -
<PAGE>

EXPENSES
Property  operating  expenses and real estate taxes during the second quarter of
2004 decreased by  approximately  ($0.3) million,  or 5.5%, from $5.5 million to
$5.2 million for the three  months  ended June 30, 2003 and 2004,  respectively,
due to lower  property  tax expense  from the  reductions  in assessed  property
values on existing properties.  Tenant reimbursements decreased by approximately
($1.3)  million,  or 26%,  from $5.0 million for the three months ended June 30,
2003 to $3.7  million  for the  three  months  ended  June  30,  2004.  Property
operating  expenses  and real  estate  taxes  increased  by  approximately  $0.5
million,  or 4.9%,  from $10.2 million to $10.7 million for the six months ended
June 30,  2003 and 2004,  respectively,  due to  higher  insurance,  repair  and
maintenance expenses to our existing properties. Tenant reimbursements decreased
by approximately  ($1.6) million, or 16.7%, from $9.6 million for the six months
ended June 30, 2003 to $8.0 million for the six months ended June 30, 2004.  The
decrease  in tenant  reimbursements  for both  periods  ended  June 30,  2004 as
compared  to the  same  periods  in 2003  was due to  lower  occupancy.  Certain
expenses such as property insurance, real estate taxes, and other fixed expenses
are not  recoverable  from vacant  properties.  At June 30,  2004,  our physical
occupancy  rate  was  72%  compared  to  80%  at  June  30,  2003.  General  and
administrative  expenses increased by approximately $0.6 million,  or 200%, from
$0.3  million to $0.9 million for the three months ended June 30, 2003 and 2004,
respectively.  For the six months  ended  June 30,  2003 and 2004,  general  and
administrative  expenses increased by approximately $0.5 million, or 71.4%, from
$0.7  million  to $1.2  million,  respectively.  The  increase  in  general  and
administrative  expenses  for the quarter and the six months ended June 30, 2004
was a result of incurring additional legal and accounting expenses in connection
with the  resignation  of  PricewaterhouseCoopers  LLP,  our former  independent
accountants and the need to re-audit consolidated financial statements for years
2001 and 2002 and audit 2003 results.

Depreciation and amortization  expense of real estate increased by approximately
$0.6 million,  or 11.8%,  from $5.1 million to $5.7 million for the three months
ended June 30, 2003 and 2004, respectively,  reflecting the amortization expense
of  in-place  leases  in  connection  with the  implementation  of SFAS No.  141
relating to the acquisition of the San Tomas  Technology  Park.  Included in the
$0.6 million is the write-off of the remaining  in-place lease  intangible asset
amounting to approximately $0.3 million due to a lease termination of one tenant
at the Orchard-Trimble  property.  Depreciation and amortization expense of real
estate increased by approximately  $1.4 million,  or 14.3%, from $9.8 million to
$11.2  million for the six months  ended June 30,  2003 and 2004,  respectively,
reflecting the newly  acquired San Tomas  Technology  Park and the  amortization
expense of in-place  leases in connection  with the  implementation  of SFAS No.
141. The $5.1 million and the $9.8 million of such expense for the three and six
months  ended June 30,  2003,  respectively,  include  $0.14  million  and $0.29
million, respectively, that resulted from the reclassification of assets and the
resulting  restatement  described in Note 7 of Notes to  Consolidated  Financial
Statements in Part I, Item 1, above.

Interest expense decreased by approximately  ($0.1) million,  or 2.3%, from $4.3
million for the three  months  ended June 30, 2003 to $4.2 million for the three
months  ended  June  30,  2004.  Interest  expense  (related  parties)  remained
relatively stable for the current three-month period compared to the same period
one year ago. Total debt  outstanding,  including  amounts due related  parties,
decreased by  approximately  ($3.9) million,  or 1.2%, from $335.9 million as of
June 30, 2003 to $332.0 million as of June 30, 2004.  Overall interest  expense,
including  amounts paid to related parties,  for the quarter ended June 30, 2004
decreased by  approximately  ($0.1) million  compared to the same quarter a year
ago.

Interest expense  increased by approximately  $0.8 million,  or 10.3%, from $7.8
million  for the six months  ended  June 30,  2003 to $8.6  million  for the six
months  ended  June  30,  2004.  The  increase  in  interest   expense  resulted
principally  from a new $80  million  mortgage  loan  from  Citicorp  USA,  Inc.
obtained in early April 2003.  Interest expense (related  parties)  decreased by
approximately  ($46,000),  or 8.4%,  from $550,000 for the six months ended June
30,  2003 to  $504,000  for the six months  ended  June 30,  2004 due to a lower
balance  owed on the  Berg  Group  line of  credit.  Overall  interest  expense,
including  amounts  paid to related  parties,  for the six months ended June 30,
2004 increased by  approximately  $0.8 million  compared to the six months ended
June 30, 2003 due to the new Citicorp  USA, Inc.  loan  discussed  above and the
substitution  of new debt at slightly  higher  interest rates for the loan under
the Berg Group line of credit.

Interest  expense for the six-month  period in 2004 increased as a result of new
debt.  In addition to the higher  amount of debt,  the new debt carries a higher
interest  rate  than the Berg  Group  line of credit  which it mainly  replaced.
Management  expects  additional  increases  in  interest  expense as new debt is
incurred in  connection  with  property  acquisitions,  we draw on the Cupertino
National  Bank  revolving  line of credit,  and we seek  alternative  sources of
credit.

NET INCOME TO COMMON STOCKHOLDERS AND NET INCOME TO MINORITY INTEREST
Minority  interest in net income 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.

Net income to common stockholders  decreased by approximately ($0.3) million, or
7.3%, from $4.1 million for the three months ended June 30, 2003 to $3.8 million
for the same period in 2004. The minority  interest  portion of income decreased
by  approximately  ($1.9)  million,  or 9.2%,  from $20.7  million for the three
months ended June 30, 2003 to $18.8  million for the three months ended June 30,
2004.  For the six months ended June 30, 2004 and 2003,  the  minority  interest
portion  of  income  was   approximately   $36.1  million  and  $40.7   million,
respectively,  resulting in net income to  stockholders  of  approximately  $7.3
million and $8.1 million,  respectively.  The decline in net income and minority
interest  portion  of  income  was  primarily  due to  reduced  rental  revenue,
un-reimbursable  operating  expenses from vacant  properties  and a $1.4 million
gain on sale of property by the  unconsolidated  joint  venture in 2003 that did
not recur in 2004.  Minority interest  represents the ownership  interest of all
limited  partners  in the  operating  partnerships  taken as a whole,  which was
approximately 83% as of June 30, 2004 and 2003.

                                     - 15 -

<PAGE>


CHANGES IN FINANCIAL CONDITION

At June 30, 2004, total  stockholders'  equity,  net, increased by approximately
$0.7 million from December 31, 2003 as we obtained additional capital from stock
option  exercises and the exchange of O.P.  units for shares of our common stock
while  incurring a deficit of  approximately  ($1.3)  million  due to  dividends
declared  in excess of net income for the  period.  During the six months  ended
June 30,  2004,  stock  options to purchase  20,000  shares of common stock were
exercised at $8.25 per share. Total proceeds were  approximately  $0.17 million.
During the first six months of 2004, one limited partner  exchanged 100,000 O.P.
units for 100,000  shares of our common  stock and Carl E. Berg gave 49,000 O.P.
units to charitable  institutions  that  exchanged them for 49,000 shares of our
common  stock  under the  Exchange  Rights  Agreement  among us and the  limited
partners  in the  operating  partnerships.  The newly  issued  shares  increased
additional paid in capital by approximately $2.1 million.

LIQUIDITY AND CAPITAL RESOURCES

We expect our principal  source of liquidity for  distributions  to stockholders
and O.P. unit holders,  debt service,  leasing commissions and recurring capital
expenditures  to come from cash  provided by  operations  and/or the  borrowings
under the lines of credit with the Berg Group and  Cupertino  National  Bank. We
expect these sources of liquidity to be adequate to meet projected distributions
to stockholders and other presently anticipated liquidity  requirements in 2004.
We  expect to meet our  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 us. We have the ability to meet
short-term  obligations or other  liquidity  needs based on lines of credit with
the Berg Group and Cupertino National Bank, assuming renewal of our existing $40
million line of credit  which  expires in  September  2004.  Despite the current
weakness in the  economy,  we expect our total  interest  expense to increase as
interest rates rise and as we incur debt through  acquisitions of new properties
and financing activities. In the remainder of 2004, we will be obligated to make
payments totaling  approximately $105.3 million of debt principal under mortgage
notes without  regard to any debt  refinancing or new debt  obligations  that we
might incur,  or optional  payments of debt  principal.  We anticipate  renewing
these  obligations,  primarily to Cupertino  National  Bank and Citicorp USA, as
described below. If we are not able to extend our loans from Cupertino  National
Bank and Citicorp,  however,  we will be required to finance these loan payments
through  other  sources  that may not be readily  available  to us on  favorable
terms.  Our  operating  results  and  financial   condition  could  be  affected
adversely, as a result.

DISTRIBUTIONS
On July 8, 2004,  we paid  dividends  of $0.24 per share of common  stock to all
common  stockholders  of  record  as of June 30,  2004.  On the same  date,  the
operating partnerships paid a distribution of $0.24 per O.P. unit to all holders
of O.P. units.

CONTRACTUAL OBLIGATIONS
The following table  identifies our contractual  obligations as of June 30, 2004
that will impact liquidity and cash flow in future periods:

<TABLE>
<CAPTION>
                                     Six Months                   Year Ending December 31,
                                     Remaining     ------------------------------------------------------
                                       2004            2005         2006          2007          2008       Thereafter      Total
                                   -------------------------------------------------------------------------------------------------
                                                                       (dollars in thousands)
<S>                                      <C>            <C>           <C>           <C>         <C>           <C>          <C>
  Debt Obligations (1)                    $105,348       $7,580        $6,245        $6,350      $116,674      $89,763      $331,960
  Operating Lease Obligations (2)               45           90            90            23             -            -           248
                                   --------------- ------------ ------------- ------------- ------------- ------------ -------------
  Total                                   $105,393       $7,670        $6,335        $6,373      $116,674      $89,763      $332,208
                                   =============== ============ ============= ============= ============= ============ =============
</TABLE>

(1)  Debt  obligations are set forth in detail in the schedule below. The amount
     due in 2004 does not reflect the planned two-year extension of the Citicorp
     USA,  Inc. and  Cupertino  National  Bank loans  described in Liquidity and
     Capital Resources above.
(2)  Operating  lease  obligations  relate  to a lease of our  corporate  office
     facility from a related party.

At June 30, 2004, we had total indebtedness of $332.0 million,  including $217.3
million of fixed rate mortgage debt, $10.6 million under the Berg Group mortgage
note (related parties),  $80 million under the Citicorp USA mortgage loan, $22.5
million under the Cupertino National Bank line of credit, and $1.6 million under
the Berg Group line of credit (related parties), as detailed in the table below.
The $80 million  short-term  mortgage loan from  Citicorp  USA, Inc.  ("Citicorp
Loan"),  which we obtained in April 2003, was originally  scheduled to mature on
March 29, 2004.  We and Citicorp  extended the loan to May 27, 2004 and again to
September 6, 2004. The mortgage loan is collateralized by seven properties.  The
extension of this loan is subject to our providing additional  collateral valued
at not less than $7.6 million,  which we have proposed to Citicorp, and Citicorp
is currently  appraising  it. In July 2004,  the $40 million line of credit with
Cupertino  National  Bank was scheduled to mature.  Cupertino  National Bank and
Citicorp USA, Inc. have granted extensions of the loans to September 2, 2004 and
September 6, 2004,  respectively  (the "Loan Extension  Period").  We are in the
process of  renegotiating  the terms and extending these loans for an additional
two-year  period.  We do not believe that the terms of the  extended  loans will
differ  materially  from their  current  terms.  We are the  borrower  under the
Cupertino  National  Bank line of credit  which is  guaranteed  by Mission  West
Properties,  L.P. and Mission West Properties, L.P. II. Mission West Properties,
L.P. is the borrower under the Citicorp USA mortgage loan which is guaranteed by
Carl E. Berg,  Mission West Properties,  L.P. I, Mission West Properties L.P. II
and Mission West Properties L.P. III. The Cupertino National Bank line of credit
and Citicorp USA, Inc. mortgage loan contain certain loan covenants. We were not
in compliance with one

                                     - 16 -
<PAGE>

covenant  pertaining  to our late  filing of the Form  10-K for the year  ending
December  31,  2003 and Form 10-Q for the  period  ending  March  31,  2004 (the
"Financial Reporting Covenants"). Each bank elected not to enforce the Financial
Reporting  Covenants  during  the Loan  Extension  Period,  and  neither of such
lenders  declared a default as a result of our  failure  to timely  perform  the
Financial Reporting Covenants. Compliance with the Financial Reporting Covenants
is a condition of the renewal for both loans.

                                     - 17 -


<PAGE>

The following table sets forth information regarding debt outstanding as of June
30, 2004:

<TABLE>
<CAPTION>
                                                                                                              Maturity     Interest
            Debt Description                           Collateral Properties                 Balance            Date        Rate
----------------------------------------------- -------------------------------------- -------------------- ------------- ----------
                                                                                      (dollars in thousands)
LINE OF CREDIT:
<S>                                           <C>                                            <C>               <C>         <C>
Berg Group (related parties)                   2033-2043 Samaritan Drive, San Jose, CA        $  1,603           3/05           (1)
                                               2133 Samaritan Drive, San Jose, CA      --------------------
                                               2233-2243 Samaritan Drive, San Jose, CA
                                               1310-1450 McCandless Drive, Milpitas, CA
                                               1795-1845 McCandless Drive, Milpitas, CA

Cupertino National Bank                        Not Applicable                                   22,513           9/04           (4)
                                                                                       --------------------

Mortgage Notes Payable (related parties):      5300 & 5350 Hellyer Avenue, San Jose, CA         10,594           6/10        7.650%
                                                                                       --------------------
Mortgage Notes Payable (2):
Prudential Capital Group                       20400 Mariani Avenue, Cupertino, CA                 611          10/06        8.750%
Washington Mutual (Home Savings & Loan Assoc.) 10460 Bubb Road, Cupertino, CA                      187          12/06        9.500%
Prudential Insurance Company of America (3)    10300 Bubb Road, Cupertino, CA                  120,464          10/08        6.560%
                                               10500 N. De Anza Boulevard, Cupertino, CA
                                               4050 Starboard Drive, Fremont, CA
                                               45700 Northport Loop, Fremont, CA
                                               45738 Northport Loop, Fremont, CA
                                               450 National Avenue, Mountain View, CA
                                               6311 San Ignacio Avenue, San Jose, CA
                                               6321 San Ignacio Avenue, San Jose, CA
                                               6325 San Ignacio Avenue, San Jose, CA
                                               6331 San Ignacio Avenue, San Jose, CA
                                               6341 San Ignacio Avenue, San Jose, CA
                                               6351 San Ignacio Avenue, San Jose, CA
                                               3236 Scott Boulevard, Santa Clara, CA
                                               3560 Bassett Street, Santa Clara, CA
                                               3570 Bassett Street, Santa Clara, CA
                                               3580 Bassett Street, Santa Clara, CA
                                               1135 Kern Avenue, Sunnyvale, CA
                                               1212 Bordeaux Lane, Sunnyvale, CA
                                               1230 E. Arques, Sunnyvale, CA
                                               1250 E. Arques, Sunnyvale, CA
                                               1170 Morse Avenue, Sunnyvale, CA
                                               1600 Memorex Drive, Santa Clara, CA
                                               1688 Richard Avenue, Santa Clara, CA
                                               1700 Richard Avenue, Santa Clara, CA
                                               3540 Bassett Street, Santa Clara, CA
                                               3542 Bassett Street, Santa Clara, CA
                                               3544 Bassett Street, Santa Clara, CA
                                               3550 Bassett Street, Santa Clara, CA

Northwestern Mutual Life Insurance Company (5) 1750 Automation Parkway, San Jose, CA            95,988           1/13        5.640%
                                               1756 Automation Parkway, San Jose, CA
                                               1762 Automation Parkway, San Jose, CA
                                               6320 San Ignacio Avenue, San Jose, CA
                                               6540-6541 Via Del Oro, San Jose, CA
                                               6385-6387 San Ignacio Avenue, San Jose, CA
                                               2251 Lawson Lane, Santa Clara, CA
                                               1325 McCandless Drive, Milpitas, CA
                                               1650-1690 McCandless Drive, Milpitas, CA
                                               20605-20705 Valley Green Drive, Cupertino, CA

Citicorp USA, Inc.                             2001 Walsh Avenue, Santa Clara, CA               80,000           9/04           (4)
                                               2880 Scott Boulevard, Santa Clara, CA
                                               2890 Scott Boulevard, Santa Clara, CA
                                               2770-2800 Scott Boulevard, Santa Clara, CA
                                               2300 Central Expressway, Santa Clara, CA
                                               2220 Central Expressway, Santa Clara, CA
                                               2330 Central Expressway, Santa Clara, CA
                                                                                       --------------------
Mortgage Notes Payable Subtotal                                                                297,250
                                                                                       --------------------
Total                                                                                         $331,960
                                                                                       ====================
</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
     2005. The interest rate at June 30, 2004 was 3.24%.
(2)  Mortgage notes payable generally  require monthly  installments of interest
     and  principal  over various  terms  extending  through the year 2013.  The
     weighted  average interest rate of mortgage notes payable was 6.23% at June
     30, 2004.
(3)  The Prudential  Insurance loan is payable in monthly  installments of $827,
     which includes principal (based upon a 30-year  amortization) and interest.
     John Kontrabecki, one of the limited partners, has guaranteed approximately
     $12,000 of this debt.  Costs and fees  incurred  with  obtaining  this loan
     aggregated approximately $900.
(4)  Interest rate equal to LIBOR plus 2%. The interest  rates for the Cupertino
     National Bank line of credit and the Citicorp  USA,  Inc.  mortgage loan at
     June 30, 2004 were 3.11% and 3.21%, respectively.
(5)  The  Northwestern  loan is payable in monthly  installments of $696,  which
     includes principal (based upon a 20-year amortization) and interest.  Costs
     and fees incurred with obtaining this loan aggregated approximately $675.

                                     - 18 -

<PAGE>


At June 30,  2004,  our  debt to total  market  capitalization  ratio,  which is
computed  as our  total  debt  outstanding  divided  by the  sum of  total  debt
outstanding  plus the market value of common stock (based upon the closing price
of $12.11 per share on June 30, 2004) on a fully  diluted  basis,  including the
conversion of all O.P. units into common stock, was approximately 20.8%. On June
30, 2004,  the last trading day for the year,  total market  capitalization  was
approximately $1.6 billion.

At June 30, 2004, the outstanding  balance  remaining under certain demand notes
that we owed to the operating partnerships was $1.5 million. The due date of the
demand notes has been  extended to  September  30,  2005.  The  principal of the
demand notes,  along with the interest expense,  which is interest income to the
operating  partnerships,  is eliminated in consolidation  and is not included in
the  corresponding  line items  within the  consolidated  financial  statements.
However,  the interest  income  earned by the operating  partnerships,  which is
interest  expense  to us, in  connection  with this  debt,  is  included  in the
calculation of minority  interest as reported on the  consolidated  statement of
operations, thereby reducing our net income by this same amount. At present, our
only means for repayment of this debt is through  distributions  that we receive
from the operating partnerships that are in excess of the amount of dividends to
be paid to our stockholders or raising additional equity capital.

HISTORICAL CASH FLOWS

COMPARISON  OF THE SIX MONTHS  ENDED JUNE 30, 2004 TO THE SIX MONTHS  ENDED JUNE
30, 2003

Net cash provided by operating activities for the six months ended June 30, 2004
was $57.2  million  compared to $61.1  million for the same period in 2003.  The
decline resulted from the decrease in rental revenue from our current  portfolio
of property due to tenant lease  obligation  defaults,  tenant  re-location  and
lower  rent  renewal  rates  during  the last half of 2003 and the first half of
2004.

Net cash used in investing  activities was ($0.4)  million and ($109.6)  million
for the six months  ended  June 30,  2004 and 2003,  respectively.  Cash used in
investing  activities during the first six months of 2003 related principally to
the acquisition of the San Tomas Technology Park for $110 million.

Net cash used in  financing  activities  was ($59.1)  million for the six months
ended June 30, 2004 compared to ($46.8) million used in financing activities for
the same  period in 2003.  Of the  ($59.1)  million  net cash used in  financing
activities during 2004, ($8.8) million was used to pay outstanding debt, ($41.8)
million for minority  interest  distributions  and ($8.6) million for dividends.
During the six months ended June 30, 2003, financing activities included two new
collateralized  mortgage loans  aggregating $180 million,  of which $100 million
was utilized  towards the payment of short-term  debt and the Berg Group line of
credit and $80 million was  utilized  towards the  acquisition  of the San Tomas
Technology Park as discussed above.  Additionally,  during 2003, we used ($82.9)
million  to  pay  outstanding  debt,   ($41.6)  million  for  minority  interest
distributions and ($8.4) million for dividends.

FUNDS FROM OPERATIONS ("FFO")

FFO is a non-GAAP financial measurement used by real estate investment trusts to
measure and compare operating performance.  As defined by NAREIT, FFO represents
net income (loss)  before  minority  interest of O.P. unit holders,  computed in
accordance with GAAP,  including  non-recurring events other than "extraordinary
items"  under GAAP and gains and  losses  from  sales of  depreciable  operating
properties,  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.  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 our ability to incur and service debt and make capital expenditures. With the
emphasis  on the  disclosure  of  operating  earnings  per share,  we will still
continue  to use  FFO  as a  measure  of  our  performance.  FFO  should  not be
considered as an alternative for net income as a measure of profitability nor is
it  comparable  to cash flows  provided by operating  activities  determined  in
accordance  with GAAP, nor is FFO  necessarily  indicative of funds available to
meet our cash needs,  including the need to make cash  distributions  to satisfy
REIT  requirements.  For  example,  FFO is not  adjusted  for  payments  of debt
principal required under our debt service obligations.

Our 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 FFO exactly as we do.

We  have  revised  our FFO  computations  for  2003  for  the  inclusion  of the
amortization  of leasing  commissions in depreciation  and  amortization of real
estate in order to be comparable to our 2004 FFO presentation in accordance with
NAREIT  guidelines and to more closely  conform to the NAREIT's FFO  definition.
Additionally,  our FFO calculation  includes our portion of the depreciation and
amortization of real estate from our unconsolidated joint venture.

                                     - 19 -

<PAGE>


FFO for the three and six months ended June 30, 2004 and 2003,  as reconciled to
net income to common stockholders, are summarized in the following tables:

<TABLE>
<CAPTION>
                                                         Three Months Ended June 30,              Six Months Ended June 30,
                                                          2004                2003                2004                2003
                                                                          (As Restated)                           (As Restated)
                                                     ---------------     ---------------     ---------------     ---------------
                                                       (dollars in thousands)                        (dollars in thousands)
<S>                                                     <C>                 <C>                 <C>                 <C>
Net income to common stockholders (1)                    $ 3,795             $ 4,111             $ 7,318             $ 8,100
Add:
 Minority interests (2)                                   18,706              20,574              35,850              40,402
 Depreciation & amortization of real estate (3)            6,240               5,634              12,650              10,842
Less:
 Gain on sale of unconsolidated joint venture asset            -               1,400                   -               1,400
                                                     ---------------     ---------------     ---------------     ---------------
FFO (4)                                                  $28,741             $28,919             $55,818             $57,944
                                                     ===============     ===============     ===============     ===============
</TABLE>

(1)  As restated for the three and six months  ended June 30, 2003  described in
     Note 7 of Notes to Consolidated  Financial  Statements under Part I, Item 1
     above.
(2)  Excludes minority interest for third parties.
(3)  Includes   depreciation   and   amortization   of  real   estate  from  our
     unconsolidated joint venture and amortization of leasing commissions.
(4)  As restated for the three and six months ended June 30, 2003. As originally
     reported for that quarter,  FFO was $28,952. As originally reported for the
     six months ended June 30, 2003, FFO was $57,607.


DISTRIBUTION POLICY

Our 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;
-    our financial condition;
-    whether to reinvest funds rather than to distribute such funds;
-    our 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.

We  cannot  assure  you  that we will be  able  to  meet or  maintain  our  cash
distribution objectives.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

We do not believe recently issued  accounting  standards will materially  impact
our financial position, results of operations, or cash flows.

In December 2003, the FASB issued FIN 46R,  "Consolidation  of Variable Interest
Entities,"  a revision to FIN 46,  which was issued in January  2003.  Under FIN
46R,  a  variable  interest  entity  must be  consolidated  by a company if that
company is subject to a majority of the entity's  expected losses or entitled to
receive a majority of the entity's  expected  residual  returns or both. FIN 46R
requires  disclosures  about  variable  interest  entities that a company is not
required to consolidate,  but in which it has a significant  variable  interest.
The consolidation requirements apply to existing entities in the first reporting
period that ends after March 15, 2004. We adopted the consolidation requirements
of FIN 46R in the first quarter of 2004. There was no significant  effect on the
consolidated financial position, results of operations or cash flows as a result
of the initial adoption of this standard in regard to existing variable interest
entities;  however, newly formed entities could meet these requirements and will
be recorded as appropriate.

In May 2003,  the FASB  issued SFAS No. 150,  Accounting  for Certain  Financial
Instruments with  Characteristics of both Liabilities and Equity. This Statement
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with  characteristics  of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some  circumstances).  SFAS No. 150 was effective
beginning in the third quarter of 2003. The FASB deferred the  implementation of
SFAS No. 150 as applied to certain  minority  interests in finite life entities,
however.  We adopted the  requirements  of SFAS No. 150 in the third  quarter of
2003,  and  considering  the  aforementioned  deferral,  it did not  impact  our
financial position, results of operations or cash flows.

                                     - 20 -

<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
June  30,  2004.  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 June 30, 2004 will be paid upon maturity.

For fixed rate debt,  the table  presents the  assumption  that the  outstanding
principal balance at June 30, 2004 will be paid according to scheduled principal
payments and that we will not prepay any of the outstanding principal balance.

<TABLE>
<CAPTION>
                                     Six Months
                                      Remaining             Year Ending December 31,
                                                 ----------------------------------------------
                                        2004        2005        2006       2007        2008     Thereafter     Total     Fair Value
                                     -----------------------------------------------------------------------------------------------
                                                                         (dollars in thousands)
VARIABLE RATE DEBT:
<S>                                    <C>           <C>        <C>         <C>       <C>          <C>         <C>         <C>
  Secured and unsecured debt            $102,513      $1,603          -           -           -           -     $104,116    $104,116
  Weighted average interest rate           3.19%       2.71%
FIXED RATE DEBT:
  Secured notes payable                   $2,835      $5,977     $6,245      $6,350    $116,674     $89,763     $227,844    $240,719
  Weighted average interest rate           6.23%       6.23%      6.23%       6.23%       6.23%       6.23%
</TABLE>


The  primary  market  risk we face is the risk of  interest  rate  fluctuations.
Principal amounts outstanding under the Berg Group line of credit, the Cupertino
National Bank line of credit and the Citicorp USA, Inc. mortgage loan, which are
tied to a LIBOR based  interest rate,  were  approximately  $1.6 million,  $22.5
million, and $80.0 million, or 0.5%, 6.8% and 24.1%, respectively,  of the total
$332.0  million of  outstanding  debt as of June 30, 2004.  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.  All of the  debt is
denominated in United States  dollars.  We had no interest rate caps or interest
rate swap contracts at June 30, 2004.

The  following  discussion  of  market  risk  is  based  solely  on  a  possible
hypothetical  change in future market  conditions  related to our  variable-rate
debt. It includes "forward-looking statements," as previously defined, regarding
market risk, but we are not forecasting the occurrence of these market changes.

Based on the amount of  variable  debt  outstanding  as of June 30,  2004,  a 1%
increase or decrease in interest  rates on our $104.1  million of floating  rate
debt would  decrease or  increase,  respectively,  six months  earnings and cash
flows by approximately  $0.52 million, as a result of the increased or decreased
interest  expense  associated  with the  change  in rate,  and would not have an
impact on the fair value of the floating rate debt. This amount is determined by
considering the impact of hypothetical interest rates on our borrowing cost. Due
to the uncertainty of  fluctuations  in interest rates and the specific  actions
that might be taken by us to mitigate of such  fluctuations  and their  possible
effects, the foregoing  sensitivity analysis assumes no changes to our financial
structure.

                                     - 21 -

<PAGE>


ITEM 4. CONTROLS AND PROCEDURES

We strive to maintain  disclosure  controls and procedures  that are designed to
ensure that information  required to be disclosed in our Exchange Act reports is
recorded,  processed,  summarized and reported within the time periods specified
in the SEC's  rules and forms,  and that such  information  is  accumulated  and
communicated to our management,  including our chief executive officer and chief
financial  officer,  as  appropriate,  to allow for timely  decisions  regarding
required  disclosure.  In designing and evaluating  the disclosure  controls and
procedures,  management  recognizes that any controls and procedures,  no matter
how well  designated  and  operated,  can provide only  reasonable  assurance of
achieving the desired control objectives and management  necessarily is required
to apply its judgment in evaluating the  cost-benefit  relationship  of possible
controls.

Until  their  resignation  on  January  26,  2004,  our  independent  registered
accounting  firm was  PricewaterhouseCoopers  LLP.  In May  2004,  we hired  new
independent accountants,  BDO Seidman, LLP who conducted audits of our financial
statements  for 2001,  2002 and 2003.  In  connection  with the  issuance of its
report of  independent  registered  public  accounting  firm,  BDO Seidman,  LLP
reported  to  our  audit   committee  a  "material   weakness"  under  standards
established by the Public  Company  Accounting  Oversight  Board of the American
Institute regarding some elements of our system of internal controls. They noted
a material  weakness with respect to our review and oversight of our application
of purchase  accounting  relating to the amortization of leasing  commissions on
acquired buildings,  as a result of which we amortized such commissions over the
40-year term of the acquired  building  rather than the lease term. In addition,
due to our  total  head  count  of  four,  they  have  also  identified  certain
segregation of duties issues without compensating controls.

In the view of BDO Seidman, LLP this material weakness led to certain accounting
adjustments  for 2003,  principally  pertaining  to purchase  accounting  errors
related  to  leasing  commissions  and  to a much  smaller  extent,  to  correct
depreciable lives for tenant  improvements and base interior  improvements.  The
error in accounting for lease commissions  necessitated a significant portion of
the restatements  described elsewhere in this report and resulted in adjustments
to our 2003 financial  statements  upon audit. We have conducted a review of the
errors requiring restatement, including a separate review by our audit committee
to determine what remedial  measures were  necessary.  We believe our management
has taken or is in the  process of taking  the steps  necessary  to correct  the
errors and avoid similar errors in the future.  One important measure is to have
our President  also become  involved in the review of our internal  controls and
procedures.

As  required  by SEC Rule  13a-15(b)  we  conducted  an  evaluation,  under  the
supervision and with the  participation  of our management,  including our Chief
Executive Officer, President and Vice President of Finance, of the effectiveness
of the design and operation of our  disclosure  controls and  procedures.  Based
upon that evaluation,  the Chief Executive Officer, President and Vice President
of Finance  concluded that our disclosure  controls and procedures are effective
in timely  alerting them to material  information  relating to us (including our
subsidiaries) required to be included in our periodic SEC filings.

While we have taken or are in the process of taking the foregoing steps in order
to address the  adequacy of our  disclosure  controls  and  procedures,  and, in
addition,  to develop  and  implement  a formal  set of  internal  controls  and
procedures  for financial  reporting in accordance  with SEC's proposed rules to
adopt the internal  control report  requirements  included in Section 404 of the
Sarbanes-Oxley  Act of 2002, the efficacy of the steps we have taken to date and
the steps we are still in the  process of  completing  is  subject to  continued
management  review  supported  by  confirmation  and testing by our internal and
external  auditors.  As a result,  it is likely that additional  changes will be
made to our internal controls and procedures.

CHANGES IN INTERNAL CONTROLS
Other than the foregoing  initiatives,  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.

                                     - 22 -

<PAGE>


PART II - OTHER INFORMATION
ITEM 1.  LEGAL PROCEEDINGS

Legal  proceedings are  incorporated  herein by reference from Part 1 "Item 1. -
Financial Statements - Note 6 - Commitments and Contingencies."

ITEM 6. EXHIBITS AND REPORTS ON FROM 8-K


          a.   Exhibits

               31.1 Section 1350 Certificate of CEO
               31.2 Section 1350 Certificate of President & COO
               31.3 Section 1350 Certificate of Principal Financial Officer
               32   Certification  pursuant to Section 906 of the Sarbanes-Oxley
                    Act of 2002

          b.   Reports on Form 8-K

               We  filed  a  Current  Report  on Form  8-K on  April  15,  2004,
               regarding our results of operations  and financial  condition for
               the first quarter of 2004.

               We filed a Current Report on Form 8-K on May 12, 2004,  regarding
               the  appointment  of BDO  Seidman,  LLP as  our  new  independent
               registered  accounting firm and the  announcement of our plan for
               reaching the AMEX compliance.


                                     - 23 -


<PAGE>



================================================================================
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: August 12, 2004        By:    /s/ Carl E. Berg
                                ------------------------------------------------
                                Carl E. Berg
                                Chief Executive Officer


Date: August 12, 2004        By:    /s/ Wayne N. Pham
                                ------------------------------------------------
                                Wayne N. Pham
                                Vice President of Finance and Controller
                                (Principal Accounting Officer and Duly
                                Authorized Officer)

                                     - 24 -

<PAGE>

EXHIBIT 31.1


                             CERTIFICATE PURSUANT TO
                 RULE 13a-14 THE SECURITIES EXCHANGE ACT OF 1934


I, Carl E. Berg, certify that:

     1.   I have  reviewed this Form 10-Q of Mission West  Properties,  Inc. for
          the quarterly period ended June 30, 2004;

     2.   Based on my  knowledge,  this  report  does  not  contain  any  untrue
          statement  of a  material  fact  or  omit to  state  a  material  fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this report,  fairly  present in all material
          respects the financial condition, results of operations and cash flows
          of the  registrant  as of,  and for,  the  periods  presented  in this
          report;

     4.   The registrant's other certifying officer(s) and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined  in  Exchange  Act  Rules  13a-15(e)  and  15d-15(e))  for the
          registrant and have:

               (a) Designed such disclosure  controls and procedures,  or caused
               such disclosure  controls and procedures to be designed under our
               supervision,  to ensure that material information relating to the
               registrant,  including  its  consolidated  subsidiaries,  is made
               known to us by others within those entities,  particularly during
               the period in which this report is being prepared;

               (b) Evaluated the  effectiveness of the  registrant's  disclosure
               controls  and   procedures  and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluation; and

               (c)  Disclosed  in this  report  any  change in the  registrant's
               internal control over financial reporting that occurred during or
               subsequent  to the period  ended  June 30,  2004 and prior to the
               date of this  certificate  that has  materially  affected,  or is
               reasonably likely to materially affect, the registrant's internal
               control over financial reporting; and

     5.   The  registrant's  other  certifying  officer(s) and I have disclosed,
          based on our most recent evaluation of internal control over financial
          reporting, to the registrant's auditors and the audit committee of the
          registrant's  board of directors (or persons performing the equivalent
          functions):


               (a) All significant  deficiencies and material  weaknesses in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and


               (b) Any fraud, whether or not material,  that involves management
               or  other   employees  who  have  a   significant   role  in  the
               registrant's internal control over financial reporting.



Carl E. Berg
Chairman and CEO

August 12, 2004



<PAGE>


EXHIBIT 31.2


                             CERTIFICATE PURSUANT TO
                    RULE 13a-14 THE SECURITIES EXCHANGE ACT
                                     OF 1934


I, Raymond V. Marino, certify that:

     1.   I have  reviewed this Form 10-Q of Mission West  Properties,  Inc. for
          the quarterly period ended June 30, 2004;

     2.   Based on my  knowledge,  this  report  does  not  contain  any  untrue
          statement  of a  material  fact  or  omit to  state  a  material  fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this report,  fairly  present in all material
          respects the financial condition, results of operations and cash flows
          of the  registrant  as of,  and for,  the  periods  presented  in this
          report;

     4.   The registrant's other certifying officer(s) and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined  in  Exchange  Act  Rules  13a-15(e)  and  15d-15(e))  for the
          registrant and have:


               (a) Designed such disclosure  controls and procedures,  or caused
               such disclosure  controls and procedures to be designed under our
               supervision,  to ensure that material information relating to the
               registrant,  including  its  consolidated  subsidiaries,  is made
               known to us by others within those entities,  particularly during
               the period in which this report is being prepared;

               (b) Evaluated the  effectiveness of the  registrant's  disclosure
               controls  and   procedures  and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluation; and

               (c)  Disclosed  in this  report  any  change in the  registrant's
               internal control over financial reporting that occurred during or
               subsequent  to the period  ended  June 30,  2004 and prior to the
               date of this  certificate  that has  materially  affected,  or is
               reasonably likely to materially affect, the registrant's internal
               control over financial reporting; and

     5.   The  registrant's  other  certifying  officer(s) and I have disclosed,
          based on our most recent evaluation of internal control over financial
          reporting, to the registrant's auditors and the audit committee of the
          registrant's  board of directors (or persons performing the equivalent
          functions):

               (a) All significant  deficiencies and material  weaknesses in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and

               (b) Any fraud, whether or not material,  that involves management
               or  other   employees  who  have  a   significant   role  in  the
               registrant's internal control over financial reporting.



Raymond V. Marino
President and Chief Operating Officer

August 12, 2004



<PAGE>


EXHIBIT 31.3


                             CERTIFICATE PURSUANT TO
                 RULE 13a-14 THE SECURITIES EXCHANGE ACT OF 1934


I, Wayne N. Pham, certify that:

     1.   I have  reviewed this Form 10-Q of Mission West  Properties,  Inc. for
          the quarterly period ended June 30, 2004;

     2.   Based on my  knowledge,  this  report  does  not  contain  any  untrue
          statement  of a  material  fact  or  omit to  state  a  material  fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this report,  fairly  present in all material
          respects the financial condition, results of operations and cash flows
          of the  registrant  as of,  and for,  the  periods  presented  in this
          report;

     4.   The registrant's other certifying officer(s) and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined  in  Exchange  Act  Rules  13a-15(e)  and  15d-15(e))  for the
          registrant and have:

               (a) Designed such disclosure  controls and procedures,  or caused
               such disclosure  controls and procedures to be designed under our
               supervision,  to ensure that material information relating to the
               registrant,  including  its  consolidated  subsidiaries,  is made
               known to us by others within those entities,  particularly during
               the period in which this report is being prepared;

               (b) Evaluated the  effectiveness of the  registrant's  disclosure
               controls  and   procedures  and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluation; and

               (c)  Disclosed  in this  report  any  change in the  registrant's
               internal control over financial reporting that occurred during or
               subsequent  to the period  ended  June 30,  2004 and prior to the
               date of this  certificate  that has  materially  affected,  or is
               reasonably likely to materially affect, the registrant's internal
               control over financial reporting; and

     5.   The  registrant's  other  certifying  officer(s) and I have disclosed,
          based on our most recent evaluation of internal control over financial
          reporting, to the registrant's auditors and the audit committee of the
          registrant's  board of directors (or persons performing the equivalent
          functions):

               (a) All significant  deficiencies and material  weaknesses in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and

               (b) Any fraud, whether or not material,  that involves management
               or  other   employees  who  have  a   significant   role  in  the
               registrant's internal control over financial reporting.



Wayne N. Pham
Vice President of Finance and Controller

August 12, 2004



<PAGE>


EXHIBIT 32


                    CERTIFICATION OF CEO AND CFO PURSUANT TO
                               18 U.S.C. ss. 1350,
                             AS ADOPTED PURSUANT TO
                    ss. 906 OF THE SARBANES-OXLEY ACT OF 2002

     In  connection  with the  Quarterly  Report  on Form 10-Q of  Mission  West
Properties, Inc. (the "Company") for the quarterly period ended June 30, 2004 as
filed with the  Securities  and  Exchange  Commission  on the date  hereof  (the
"Report"),  each of Carl E.  Berg,  Chairman  of the Board  and Chief  Executive
Officer  of the  Company,  and Wayne N. Pham,  Vice  President  of  Finance  and
Controller of the Company,  hereby certify,  pursuant to 18 U.S.C.  ss. 1350, as
adopted  pursuant to ss. 906 of the  Sarbanes-Oxley  Act of 2002, to the best of
his knowledge, that:

     (1) The Report fully  complies  with the  requirements  of Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended; and
     (2)  The  information  contained  in the  Report  fairly  presents,  in all
material  respects,  the  financial  condition  and result of  operations of the
Company.


----------------------------------------------------
Carl E. Berg
Chairman of the Board and Chief Executive Officer
August 12, 2004


----------------------------------------------------
Wayne N. Pham
Vice President of Finance and Controller
August 12, 2004

     This  certification  accompanies  this  Report  pursuant  to ss. 906 of the
Sarbanes-Oxley  Act of 2002 and shall not,  except to the extent required by the
Sarbanes-Oxley  Act of 2002,  or  otherwise  required,  be  deemed  filed by the
Company  for  purposes  of ss. 18 of the  Securities  Exchange  Act of 1934,  as
amended.