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 SEPTEMBER 30, 2003

                          COMMISSION FILE NUMBER 1-8383


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

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

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

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


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. YES [X] NO [ ]

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


                      APPLICABLE ONLY TO CORPORATE ISSUERS

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

              17,754,691 shares outstanding as of November 11, 2003



                                     - 1 -
<PAGE>


                          MISSION WEST PROPERTIES, INC.

                                    FORM 10-Q
                    FOR THE QUARTER ENDED SEPTEMBER 30, 2003

<TABLE>
<CAPTION>

                                      INDEX

                                                                                                                    PAGE
PART I        FINANCIAL INFORMATION                                                                                 ----

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

              Consolidated Balance Sheets as of September 30, 2003
              and December 31, 2002...................................................................................3

              Consolidated Statements of Operations for the three
              and nine months ended September 30, 2003 and 2002.......................................................4

              Consolidated Statements of Cash Flows for the
              nine months ended September 30, 2003 and 2002...........................................................5

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

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

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

   Item 4.    Controls and Procedures................................................................................21


PART II       OTHER INFORMATION

   Item 6.    Exhibits and Reports on Form 8-K.......................................................................22

SIGNATURES...........................................................................................................23
</TABLE>

                                     - 2 -

<PAGE>


PART I - FINANCIAL INFORMATION
ITEM 1   CONSOLIDATED FINANCIAL STATEMENTS

                          MISSION WEST PROPERTIES, INC.
                           CONSOLIDATED BALANCE SHEETS
           (Dollars in thousands, except share and per share amounts)
                                   (Unaudited)
                                    ---------
<TABLE>
<CAPTION>
                                                                                 September 30, 2003      December 31, 2002
                                                                               ----------------------  ----------------------

                                     ASSETS
<S>                                                                                <C>                    <C>
Real estate assets, at cost
    Land                                                                            $  276,405             $   234,707
    Buildings and improvements                                                         777,156                 726,581
    Real estate related intangible assets                                               18,284                       -
                                                                               ----------------------  ----------------------
       Total investments in properties                                               1,071,845                 961,288
    Less accumulated depreciation and amortization                                     (82,318)                (66,560)
                                                                               ----------------------  ----------------------
       Net investments in properties                                                   989,527                 894,728
    Investment in unconsolidated joint venture                                           2,258                       -
                                                                               ----------------------  ----------------------
    Net investments in real estate assets                                              991,785                 894,728
Cash and cash equivalents                                                                5,096                   4,479
Deferred rent                                                                           18,047                  17,001
Other assets                                                                            15,463                  13,198
                                                                               ----------------------  ----------------------
       Total assets                                                                 $1,030,391             $   929,406
                                                                               ======================  ======================

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
    Line of credit (related parties)                                                $      769             $    58,792
    Revolving line of credit                                                            19,966                  23,839
    Loan payable                                                                             -                  20,000
    Mortgage notes payable                                                             301,115                 125,062
    Mortgage notes payable (related parties)                                            10,843                  11,078
    Interest payable                                                                       335                     337
    Security deposits                                                                   10,389                  11,184
    Prepaid rental income                                                               15,003                   9,876
    Dividend/distribution payable                                                       25,021                  24,951
    Accounts payable and accrued expenses                                                7,471                   4,698
                                                                               ----------------------  ----------------------
       Total liabilities                                                               390,912                 289,817

Commitments and contingencies (Note 6)

Minority interests                                                                     527,023                 528,768

Stockholders' equity:
  Preferred stock, $.001 par value, 20,000,000 shares
      authorized, none issued and outstanding                                                -                       -
  Common stock, $.001 par value, 200,000,000 shares
      authorized, 17,754,691 and 17,487,329 shares issued and
      outstanding at September 30, 2003 and December 31, 2002,
      respectively                                                                          18                      17
  Paid-in-capital                                                                      130,552                 128,295
  Accumulated deficit                                                                  (18,114)                (17,491)
                                                                               ----------------------  ----------------------
     Total stockholders' equity                                                        112,456                 110,821
                                                                               ----------------------  ----------------------
     Total liabilities and stockholders' equity                                     $1,030,391             $   929,406
                                                                               ======================  ======================
</TABLE>

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

                                     - 3 -
<PAGE>


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

                                                     Three months ended September 30,           Nine months ended September 30,
                                                        2003                  2002                 2003                 2002
                                                 --------------------  -------------------- -------------------- -------------------
<S>                                                    <C>                   <C>              <C>                   <C>
Revenues:
   Rental revenues from real estate                      $33,782               $32,165          $  98,408             $  97,403
   Tenant reimbursements                                   4,796                 5,219             14,360                15,420
   Other income, including interest                          567                   487              1,871                 1,261
                                                 --------------------  -------------------- -------------------- -------------------
        Total revenues                                    39,145                37,871            114,639               114,084
                                                 --------------------  -------------------- -------------------- -------------------

Expenses:
   Operating expenses                                      2,555                 1,974              5,965                 6,170
   Real estate taxes                                       2,876                 3,091              9,391                 9,152
   Depreciation and amortization                           5,797                 4,552             15,758                13,363
   General and administrative                                360                   386              1,039                 1,190
   Interest                                                4,335                 2,413             12,097                 7,045
   Interest (related parties)                                280                   861                830                 2,770
                                                 --------------------  -------------------- -------------------- -------------------
       Total expenses                                     16,203                13,277             45,080                39,690
                                                 --------------------  -------------------- -------------------- -------------------

Income before equity in earnings of
unconsolidated joint venture & minority interests         22,942                24,594             69,559                74,394
Equity in earnings of unconsolidated joint
venture                                                      599                     -              3,358                     -
Minority interests                                        19,598                20,036             60,785                61,629
                                                 --------------------  -------------------- -------------------- -------------------
   Income from continuing operations                       3,943                 4,558             12,132                12,765
                                                 --------------------  -------------------- -------------------- -------------------

Discontinued operations, net minority interests:
Gain from disposal of discontinued operations                  -                     -                  -                 1,018
Income attributable to discontinued operations                 -                     -                  -                    49
                                                 --------------------  -------------------- -------------------- -------------------
   Income from discontinued operations                         -                     -                  -                 1,067
                                                 --------------------  -------------------- -------------------- -------------------

Net income to common stockholders                        $ 3,943               $ 4,558            $12,132               $13,832
                                                 ====================  ==================== ==================== ===================
Net income to minority interests                         $19,598               $20,036            $60,785               $66,952
                                                 ====================  ==================== ==================== ===================
Income per share from continuing operations:
   Basic                                                 $0.22                 $0.26              $0.68                 $0.73
                                                 ====================  ==================== ==================== ===================
   Diluted                                               $0.22                 $0.26              $0.68                 $0.71
                                                 ====================  ==================== ==================== ===================
Income per share from discontinued operations:
   Basic                                                     -                     -                  -                 $0.06
                                                 ====================  ==================== ==================== ===================
   Diluted                                                   -                     -                  -                 $0.06
                                                 ====================  ==================== ==================== ===================
Net income per share to common stockholders:
   Basic                                                 $0.22                 $0.26              $0.68                 $0.79
                                                 ====================  ==================== ==================== ===================
   Diluted                                               $0.22                 $0.26              $0.68                 $0.77
                                                 ====================  ==================== ==================== ===================
Weighted average number of shares of
  common stock outstanding (basic)                    17,747,293            17,467,329         17,695,920            17,445,759
                                                 ====================  ==================== ==================== ===================
Weighted average number of shares of
  common stock outstanding (diluted)                  17,817,917            17,856,688         17,757,461            17,872,108
                                                 ====================  ==================== ==================== ===================
</TABLE>

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

                                     - 4 -
<PAGE>


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

                                                                                            Nine months ended September 30,
                                                                                         --------------------------------------
                                                                                               2003                2002
                                                                                         ------------------ -------------------
<S>                                                                                      <C>                <C>
Cash flows from operating activities:
     Net income                                                                           $    12,132        $     13,832
     Adjustments to reconcile net income to net cash provided by
       operating activities:
            Minority interests                                                                 60,785              66,952
            Depreciation and amortization                                                      15,758              13,409
            Gain on sales of assets                                                                 -              (6,103)
            Equity in earnings of unconsolidated joint venture                                 (3,358)                  -
            Distributions from unconsolidated joint venture                                     1,500                   -
            Other                                                                                   -                 (20)
     Changes in assets and liabilities:
            Deferred rent                                                                      (1,046)              1,088
            Other assets                                                                       (1,402)             (2,332)
            Interest payable                                                                       (2)                 (2)
            Security deposits                                                                    (795)               (272)
            Prepaid rental income                                                               5,127               8,260
            Accounts payable and accrued expenses                                               3,124               2,410
                                                                                         ------------------ -------------------
     Net cash provided by operating activities                                                 91,823              97,222
                                                                                         ------------------ -------------------

Cash flows from investing activities:
     Improvements to real estate assets/new equipment                                          (1,262)             (1,668)
     Refundable option payment                                                                      -             (18,836)
     Real estate purchase                                                                    (110,013)            (31,311)
     Proceeds from sales of real estate                                                             -              18,591
     Restricted cash                                                                                -              12,714
     Proceeds from sale of joint venture real estate                                            1,400                   -
                                                                                         ------------------ -------------------
     Net cash used in investing activities                                                   (109,875)            (20,510)
                                                                                         ------------------ -------------------

Cash flows from financing activities:
    Principal payments on mortgage notes payable                                               (3,946)             (1,518)
    Proceeds from mortgage note payable                                                       180,000                   -
    Principal payments on mortgage notes payable (related parties)                               (235)               (218)
    Net payments under line of credit (related parties)                                       (58,022)            (46,422)
    Proceeds from loan payable                                                                      -              20,000
    Payment on loan payable                                                                   (20,000)                  -
    Proceeds from revolving line of credit                                                          -              27,739
    Payment on revolving line of credit                                                        (3,873)                  -
    Financing costs                                                                              (863)                (52)
    Proceeds from stock options exercised                                                         683                 151
    Minority interests distributions                                                          (62,384)            (62,104)
    Dividends paid                                                                            (12,691)            (12,543)
                                                                                         ------------------ -------------------
     Net cash provided by (used in) financing activities                                       18,669             (74,967)
                                                                                         ------------------ -------------------
     Net increase in cash and cash equivalents                                                    617               1,745
Cash and cash equivalents, beginning                                                            4,479               5,310
                                                                                         ------------------ -------------------
Cash and cash equivalents, ending                                                         $     5,096        $      7,055
                                                                                         ================== ===================

Supplemental information:
    Cash paid for interest                                                                $    12,672        $      9,606
                                                                                         ================== ===================
Supplemental schedule of non-cash investing and financing activities:
    Debt incurred in connection with property acquisitions (related parties)              $         -        $     18,000
                                                                                         ================== ===================
    Assumption of other liabilities in connection with property acquisitions              $       783        $        387
                                                                                         ================== ===================
    Issuance of operating partnership units in connection with property acquisitions      $         -        $     10,223
                                                                                         ================== ===================
    Issuance of operating partnership units in connection with joint venture acquisition  $     1,800        $          -
                                                                                         ================== ===================
</TABLE>

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

                                     - 5 -
<PAGE>


                          MISSION WEST PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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


1.   PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION

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

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

     Minority  interest   represents  the  separate  private  ownership  of  the
     operating  partnerships  by the Berg Group  (defined  as Carl E. Berg,  his
     brother Clyde J. Berg, members of their respective immediate families,  and
     certain entities they control) and other non-affiliate interests. In total,
     these interests account for approximately 83% of the ownership interests in
     the real  estate  operations  of the  Company  as of  September  30,  2003.
     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.

     The financial  statements  have been prepared in accordance with accounting
     principles  generally  accepted  in the United  States of America  ("GAAP")
     applicable to interim  financial  information and pursuant to the rules and
     regulations of the Securities and Exchange Commission. Accordingly, certain
     information  and  footnote   disclosures  normally  included  in  financial
     statements  prepared in accordance with GAAP have been condensed or omitted
     pursuant  to  such  rules  and  regulations.  However,  in the  opinion  of
     management,   all   adjustments,   consisting  only  of  normal   recurring
     adjustments,  necessary for a fair  presentation  have been  included.  The
     Company presumes that users of the interim financial  information have read
     or have access to the audited financial statements for the preceding fiscal
     year and that the  adequacy  of  additional  disclosure  needed  for a fair
     presentation  may be determined in that context.  The results of operations
     for the three and nine months ended  September 30, 2003 are not necessarily
     indicative of the results to be expected for the entire year.

     The Company accounts for its investments in  unconsolidated  joint ventures
     under the  equity  method  of  accounting  as the  Company  exercises  some
     influence,  but does not operate,  manage or control the properties.  These
     investments  are recorded at cost and  subsequently  adjusted for equity in
     earnings and cash contributions and distributions.

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

     In January 2003, the released FASB Interpretation No. 46, "Consolidation of
     Variable  Interest  Entities - an interpretation of ARB No. 15" ("FIN 46").
     FIN 46 requires  that any entity  meeting  certain  rules and relation to a
     company's  equity  investment  risk  and  level  of  financial  control  be
     considered  as a variable  interest  entity.  The statement (as amended) is
     applicable  to all variable  interest  entities  created or acquired  after
     January 31, 2003, and the first interim period beginning after December 15,
     2003, for variable  interest entities in which the Company holds a variable
     interest  that is acquired  before  February 1, 2003.  The Company plans on
     adopting FIN 46 in the time frames as required by the statement. Management
     expects  no  significant  effect on the  consolidated  financial  position,
     results  of  operations  or cash  flows of the  Company  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 ("SFAS
     150").  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 150 was  effective  beginning in the third quarter of
     2003.  The FASB  deferred  the  implementation  of SFAS 150 as  applied  to
     certain minority interests in finite-lived  entities,  however. The Company
     adopted  the  requirements  of SFAS 150 in the third  quarter of 2003,  and
     considering the  aforementioned  deferral,  it did not impact the Company's
     financial position, results of operations or cash flows.

     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 nine months
     ended September 30, 2003.

                                     - 6 -
<PAGE>

2.   REAL ESTATE

     BERG LAND HOLDINGS OPTION AGREEMENT
     Under the terms of the Berg Land Holdings  Option  Agreement,  the Company,
     through the  operating  partnerships,  has the option to acquire any future
     Research & Development  ("R&D"),  office and industrial buildings developed
     by the Berg Group on land currently owned,  optioned, or acquired for these
     purposes in the future,  directly or indirectly,  by certain members of the
     Berg Group. At present, there are approximately 250 acres of Silicon Valley
     land,  including land under development,  owned directly or under 50% joint
     venture entities,  by certain members of the Berg Group that are subject to
     the terms of the Berg Land Holdings Option  Agreement.  As of September 30,
     2003,  the  Company  had  completed  19  acquisitions  under  the Berg Land
     Holdings Option Agreement  representing  approximately  1,864,000  rentable
     square feet.  Upon the  Company's  exercise of an option to purchase any of
     the  future  R&D  property  developments  under  the terms of the Berg Land
     Holdings Option Agreement,  the acquisition price will equal the sum of (a)
     the  full  construction  cost  of  the  building;   (b)  10%  of  the  full
     construction cost of the building;  (c) the acquisition value of the parcel
     as defined in the agreement  upon which the  improvements  are  constructed
     (currently ranging from $7.50 to $20.00 per square foot); (d) 10% per annum
     of the acquisition  value of the parcel for the period from January 1, 1998
     to the close of escrow;  and (e) interest at LIBOR (London  Interbank Offer
     Rate) plus 1.65% per annum on the full  construction  costs of the building
     for the period from the date funds were  disbursed by the  developer to the
     close of escrow;  less (f) any debt  encumbering the property,  or a lesser
     amount as approved by the members of the independent directors committee of
     the Company's  board of directors.  At the option of the owners of the land
     so purchased by the Company,  the purchase may be paid in cash or operating
     partnership interests ("O.P. units") valued at the average closing price of
     shares  of  common  stock  over the  30-trading-day  period  preceding  the
     acquisition date.

     Under the Berg Land Holdings Option Agreement,  as long as the Berg Group's
     percentage ownership interest in the Company and the operating partnerships
     taken  as a whole is at least  65%,  the  Company  also  has an  option  to
     purchase  all land  acquired,  directly or  indirectly,  by Carl E. Berg or
     Clyde J. Berg in the  future  which has not been  improved  with  completed
     buildings and which is zoned for,  intended for or appropriate for research
     and development,  office and/or industrial development or use in the states
     of California, Oregon and Washington.

     INVESTMENT IN UNCONSOLIDATED JOINT VENTURE
     Effective  January 1, 2003, the Company  acquired a 50% interest in a joint
     venture with TBI in Morgan Hill,  California for $1,800 from the Berg Group
     under the Berg Land Holdings  Option  Agreement.  The Company  financed the
     acquisition  of its 50% interest with the issuance of 181,032 O.P. units to
     the Berg  Group.  The joint  venture  consists of four R&D  buildings  with
     approximately  593,000 rentable square feet, which are operated and managed
     by TBI, the other partner in the joint venture. The Company's investment in
     this joint venture is reflected as an investment  in  unconsolidated  joint
     venture on the accompanying consolidated balance sheets. This investment is
     not  consolidated  because TBI has management and control over  significant
     day-to-day operating activities.

     On April 1, 2003,  the joint  venture with TBI  acquired a 60,000  rentable
     square foot shell building in Morgan Hill,  California  from the Berg Group
     under the Berg Land Holdings Option  Agreement.  The joint venture financed
     100% of the cost of the  building.  The building was sold on April 2, 2003.
     The Company  received a cash  distribution and recognized a gain of $1,400,
     its proportionate share, on the sale.

     PROPERTY ACQUISITIONS
     Effective  April 9, 2003,  the  Company  acquired a 36-acre  seven-building
     campus style office/R&D project comprised of approximately 625,000 rentable
     square feet at San Tomas and Central Expressway in Santa Clara, California,
     also known as the San Tomas  Technology  Park. The project was acquired for
     approximately  $110,000  from an unrelated  third party and financed with a
     combination of debt and cash  reserves.  The debt component is comprised of
     an $80,000 short term loan from Citicorp USA, Inc., which is collateralized
     by the  acquired  properties.  This loan bears  interest  at an annual rate
     equal to LIBOR plus 2% and matures in April 2004. In addition,  the Company
     utilized  approximately  $19,200  of its  operating  line  of  credit  with
     Cupertino   National  Bank  in  connection  with  this   acquisition.   The
     Consolidated  Statements of Operations  for the three and nine months ended
     September  30,  2003  include  revenues  and  expenses  from  the  acquired
     properties at the San Tomas  Technology  Park from the date of acquisition.
     See related discussion under Note 8.

3.   STOCK TRANSACTIONS

     During the nine months ended September 30, 2003,  stock options to purchase
     60,362  shares  of common  stock and  50,000  shares of common  stock  were
     exercised at $4.50 and $8.25 per share, respectively. Total proceeds to the
     Company were  approximately  $683. Two limited partners  exchanged  157,000
     O.P. units for 157,000 shares of the Company's common stock under the terms
     of the December 1998 Exchange  Rights  Agreement  among the Company and all
     limited partners of the operating partnerships.


                                     - 7 -

<PAGE>


4.   NET INCOME PER SHARE

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

     The computation for weighted average shares is detailed below:

<TABLE>
<CAPTION>

                                                        Three Months Ended September 30,   Nine Months Ended September 30,
                                                        -------------------------------    -------------------------------
                                                             2003              2002             2003              2002
                                                        --------------    -------------    --------------    -------------
<S>                                                      <C>              <C>               <C>              <C>
        Weighted average shares outstanding (basic)       17,747,293       17,467,329        17,695,920       17,445,759
        Incremental shares from assumed option exercise       70,624          389,359            61,541          426,349
                                                        --------------    -------------    --------------    -------------
        Weighted average shares outstanding (diluted)     17,817,917       17,856,688        17,757,461       17,872,108
                                                        ==============    =============    ==============    =============
</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  September  30,  2003  and 2002 was
     86,498,064 and 86,494,032, respectively.

5.   RELATED PARTY TRANSACTIONS

     As of September 30, 2003, the Berg Group owned  78,364,716 O.P. units.  The
     Berg Group's  ownership as of September 30, 2003 represented  approximately
     75% of the equity  interests of the  Company,  assuming  conversion  of the
     86,498,064 O.P. units outstanding into the Company's common stock.

     Effective  January 1, 2003, the Company and the Berg Group mutually  agreed
     to reduce the Berg Group  $100,000  line of credit to $20,000 and to reduce
     the  number of  properties  securing  the line of credit to five.  The Berg
     Group line of credit bears interest at LIBOR plus 1.30%, which was 2.48% as
     of September 30, 2003, and matures in March 2004. The Company believes that
     the terms of the Berg Group line of credit  are more  favorable  than those
     available from  commercial  lenders.  As of September 30, 2003, debt in the
     amount of $769 was due the Berg Group under the line of credit, and debt in
     the  amount  of  $10,843  was due the  Berg  Group  under a  mortgage  note
     established  May 15,  2000 in  connection  with  the  acquisition  of a 50%
     interest in Hellyer  Avenue  Limited  Partnership,  the  obligor  under the
     mortgage  note. The mortgage note bears interest at 7.65% and is due in ten
     years with principal payments amortized over 20 years.

     Carl E. Berg has a  substantial  financial  interest  in one  company  that
     leases space from the operating  partnerships.  This company occupies 5,862
     square  feet at $1.00 per square  foot per month.  This lease was in effect
     prior to the Company's  acquisition of its general partnership interests in
     July 1998. The lease expires in May 2004.

     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 September 30, 2003 and 2002 and $68
     for each of the nine-month periods ended September 30, 2003 and 2002.

6.   COMMITMENTS AND CONTINGENCIES

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

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

7.   DISCONTINUED OPERATIONS

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

     As of September  30, 2003,  there were no properties  under  contract to be
     sold or disposed of which would qualify as discontinued operations.

                                     - 8 -
<PAGE>

     In March 2002,  the Company  sold one  property for a total gain of $6,103,
     including   minority  interest  share  of  $5,085.   Condensed  results  of
     operations  for this property for the nine months ended  September 30, 2002
     are as follows:
<TABLE>
<CAPTION>

                                            Nine Months Ended
                                            September 30, 2002
                                           -------------------
                                          (Dollars in thousands)
<S>                                              <C>
         Rental income from real estate           $333
         Tenant reimbursements                     293
                                           -------------------
               Total revenues                      626

         Real estate taxes                         293
         Depreciation                               46
                                           -------------------
              Total expenses                       339
                                           -------------------
         Income before minority interests          287
                   Minority interests              238
                                           -------------------
                   Net income                     $ 49
                                           ===================

</TABLE>

8.   BUSINESS COMBINATIONS

     For real estate acquired subsequent to June 30, 2001, the effective date of
     Statement  of Financial  Accounting  Standards  ("SFAS") No. 141,  Business
     Combinations,  the fair value of the real estate  acquired is  allocated to
     the  acquired  tangible  assets,  consisting  of land,  building and tenant
     improvements,  and identified intangible assets and liabilities,  including
     the value of the above or below market leases and in-place leases.

     On April 9,  2003,  the  Company  acquired  San Tomas  Technology  Park for
     $110,000 in cash.  The purchase  price was allocated to long-lived  assets,
     one  above-market  in-place  lease and the value of  in-place  leases.  The
     Company  recorded  $18,284 of the  purchase  price as real  estate  related
     intangible assets in the accompanying  consolidated  balance sheets for the
     above-market   in-place  lease  and  the  value  of  in-place  leases.  The
     intangible  assets will be amortized  over the applicable  remaining  lease
     terms.  Amortization  expense of $912 and $1,385 was recorded for the three
     and nine months ended September 30, 2003, respectively.

     The purchase  price  allocation  for this  acquisition  was  determined  in
     accordance with the following principles under SFAS No. 141:

     The fair  value of the  tangible  assets  of an  acquired  property,  which
     includes land, building and tenant  improvements,  is determined by valuing
     the property as if it were  vacant,  and the  "as-if-vacant"  value is then
     allocated to land,  building and tenant  improvements based on management's
     determination  of  the  relative  fair  values  of  these  assets.  Factors
     considered by management in performing these analyses include certain costs
     during the lease-up periods considering current market conditions and costs
     to execute  similar  leases.  These costs include  estimates of lost rental
     revenue, leasing commissions, and tenant improvements.

     In allocating  the fair value of the  identified  intangible  assets of the
     acquired property,  above-market  in-place lease value is recorded based on
     the  present  value,  using an  interest  rate  which  reflects  the  risks
     associated  with the lease  acquired,  of the  difference  between  (i) the
     contractual  amounts to be paid  pursuant  to the  in-place  lease and (ii)
     management's  estimate  of fair  market  lease  rate for the  corresponding
     in-place   lease,   measured   over  a  period   equal  to  the   remaining
     non-cancelable  lease  term.  The  capitalized  above-market  lease  value,
     included  in real  estate  related  intangible  assets in the  accompanying
     consolidated  balance  sheets,  is amortized to expense as  amortization of
     real  estate over the  remaining  non-cancelable  lease term.  The value of
     in-place leases  exclusive of the value of  above-market  in-place lease is
     also amortized to expense over the remaining  non-cancelable periods of the
     respective  leases.  If a lease were to be  terminated  prior to its stated
     expiration, all unamortized amounts relating to that lease would be written
     off in the period that the lease is terminated.

9.   SUBSEQUENT EVENTS

     On October 9, 2003, the Company paid dividends of $0.24 per share of common
     stock to all common stockholders of record as of September 30, 2003. On the
     same date, the operating partnerships paid a distribution of $0.24 per O.P.
     unit to all holders of O.P. units.

                                     - 9 -
<PAGE>


ITEM 2
MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS

This Management's  Discussion and Analysis of Financial Condition and Results of
Operations  should be read in  conjunction  with the  accompanying  consolidated
financial  statements  and notes  thereto  contained  herein  and the  Company's
consolidated  financial  statements and notes thereto contained in the Company's
Annual Report on Form 10-K as of and for the year ended  December 31, 2002.  The
results  for the  three  and  nine  months  ended  September  30,  2003  are not
necessarily  indicative of the results to be expected for the entire fiscal year
ending  December 31, 2003.  The following  discussion  includes  forward-looking
statements,  including  but not  limited  to,  statements  with  respect  to the
Company's future financial performance, operating results, plans and objectives.
Actual results may differ materially from those currently  anticipated depending
upon a variety of factors,  including  those  described  under the  sub-heading,
"Forward-Looking Information."

OVERVIEW

Mission West Properties,  Inc. (the "Company")  acquires,  markets,  leases, and
manages  R&D and office  properties,  primarily  located in the  Silicon  Valley
portion of the San Francisco  Bay Area.  As of September  30, 2003,  the Company
owned and managed 108 properties  totaling  approximately  7.8 million  rentable
square feet through four limited partnerships,  or operating  partnerships,  for
which it is the sole  general  partner.  This class of property is designed  for
research and development and office uses and, in some cases,  includes space for
light manufacturing  operations with loading docks. The Company believes that it
has one of the largest portfolios of R&D properties in the Silicon Valley. As of
September 30, 2003, the five tenants who leased the most square footage from the
Company were Microsoft Corporation, JDS Uniphase Corporation, Amdahl Corporation
(a subsidiary of Fujitsu  Limited),  Apple  Computer,  Inc., and NEC Electronics
America,  Inc. For federal  income tax  purposes,  the Company has operated as a
self-managed,  self-administered  and fully  integrated  real estate  investment
trust ("REIT") since fiscal 1999.

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

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

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

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

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

On April 9, 2003, the Company acquired seven R&D and office  properties  located
at the San Tomas  Technology  Park in Santa Clara,  California.  The acquisition
added  approximately  625,000 net rentable square feet, or approximately  9%, to
the Company's existing portfolio of properties.

CRITICAL ACCOUNTING POLICIES

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

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

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

                                     - 10 -
<PAGE>

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

The purchase price  allocation for property  acquisition  subsequent to June 30,
2001 is determined in accordance  with the following  principles  under SFAS No.
141:

The fair value of the tangible  assets of an acquired  property,  which includes
land, building and tenant improvements, is determined by valuing the property as
if it were  vacant,  and the  "as-if-vacant"  value is then  allocated  to land,
building and tenant  improvements  based on  management's  determination  of the
relative  fair values of these  assets.  Factors  considered  by  management  in
performing  these  analyses  include  certain costs during the lease-up  periods
considering current market conditions and costs to execute similar leases. These
costs include estimates of lost rental revenue, leasing commissions,  and tenant
improvements.

In allocating the fair value of the identified intangible assets of the acquired
property,  above-market  in-place  lease value is recorded  based on the present
value, using an interest rate which reflects the risks associated with the lease
acquired,  of the  difference  between  (i) the  contractual  amounts to be paid
pursuant to the  in-place  lease and (ii)  management's  estimate of fair market
lease rate for the corresponding in-place lease, measured over a period equal to
the remaining  non-cancelable  lease term. The  capitalized  above-market  lease
value,  included in real estate related  intangible  assets in the  accompanying
consolidated  balance  sheets,  is amortized to expense as  amortization of real
estate  over the  remaining  non-cancelable  lease  term.  The value of in-place
leases  exclusive of the value of above-market  in-place lease is also amortized
to expense over the remaining  non-cancelable  periods of the respective leases.
If a lease were to be terminated prior to its stated expiration, all unamortized
amounts relating to that lease would be written off in the period that the lease
is terminated.

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

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

INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES. The Company,  through an operating
partnership,   has  a  non-controlling   limited  partnership  interest  in  one
unconsolidated  joint venture.  This investment is not consolidated  because the
Company does not exercise significant control over major operating and financial
decisions. The Company accounts for the joint venture using the equity method of
accounting.

REVENUE RECOGNITION.  The Company recognizes rental revenue 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 the Company.  The difference  between recognized rental
income and rental cash receipts is recorded as deferred rent 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 recognized on the
accrual basis.

Rental revenue is affected if existing tenants  terminate or amend their leases.
The Company tries to identify tenants who may be likely to declare bankruptcy or
cease operations.  By anticipating these events in advance,  the Company expects
to take steps to minimize  their  impact on its reported  results of  operations
through  lease   renegotiations,   adjustments   to  deferred  rent,  and  other
appropriate  measures.  The Company's  judgments and estimations  about tenants'
capacity  to continue  to meet their  lease  obligations  will affect the

                                     - 11 -
<PAGE>

rental revenue  recognized.  Material  differences  may result in the amount and
timing of our  rental  revenue  for any  period if the  Company  made  different
judgments or estimations.

                                     - 12 -
<PAGE>

RESULTS OF OPERATIONS

COMPARISON  OF THE THREE AND NINE MONTHS ENDED  SEPTEMBER  30, 2003 TO THE THREE
AND NINE MONTHS ENDED SEPTEMBER 30, 2002.

As of September 30, 2003, the Company,  through its controlling interests in the
operating partnerships,  owned 108 properties totaling approximately 7.8 million
rentable  square feet  compared to 101  properties  totaling  approximately  7.2
million rentable square feet owned by the Company as of September 30, 2002. This
represents a net increase of  approximately 8% in total rentable square footage,
which is primarily attributable to the Company's acquisition of seven properties
at the San  Tomas  Technology  Park in Santa  Clara,  California  consisting  of
approximately 625,000 net rentable square feet in April 2003.

Rental revenues from  continuing  operations for the three and nine months ended
September 30, 2003 compared to the three and  nine-month  periods in 2002 are as
follows:
<TABLE>
<CAPTION>

                            Three Months Ended September 30,
                            ---------------------------------
                                                                                      % Change by         % of Total Net
                                2003               2002             $ Change         Property Group           Change
                            --------------     --------------     --------------     ---------------     -----------------
                                           (Dollars in thousands)
<S>                           <C>                <C>              <C>                  <C>                  <C>
   Same Property (1)           $27,984            $29,251           ($1,267)              (4.3%)               (3.9%)
   2002 Acquisitions (2)         2,553              2,914              (361)             (12.4%)               (1.1%)
   2003 Acquisitions             3,245                  -             3,245                100%                10.0%
                            --------------     --------------     --------------                         -----------------
                               $33,782            $32,165            $1,617                5.0%                 5.0%
                            ==============     ==============     ==============                         =================


                            Nine Months Ended September 30,
                            --------------------------------
                                                                                      % Change by         % of Total Net
                                2003               2002             $ Change         Property Group           Change
                            --------------     --------------     --------------     ---------------     -----------------
                                           (Dollars in thousands)
   Same Property (1)           $84,568            $91,609           ($7,041)              (7.7%)               (7.2%)
   2002 Acquisitions (2)         7,659              5,794             1,865               32.2%                 1.9%
   2003 Acquisitions             6,181                  -             6,181                100%                 6.3%
                            --------------     --------------     --------------                         -----------------
                               $98,408            $97,403            $1,005                1.0%                 1.0%
                            ==============     ==============     ==============                         =================
</TABLE>

(1)  "Same Property" is defined as properties owned by the Company prior to 2002
     that the Company still owned as of September 30, 2003.
(2)  Operating  rental  revenues for 2002  Acquisitions do not reflect a full 12
     months of  operations  in 2002 because  these  properties  were acquired at
     various times during 2002.

RENTAL REVENUE FROM CONTINUING OPERATIONS
For the quarter ended  September  30, 2003,  rental  revenues  increased by $1.6
million, or 5%, from $32.2 million for the three months ended September 30, 2002
to $33.8 million for the same period of 2003.  The net increase  resulted from a
decline of ($1.3) million in the Company's "Same Property" portfolio, a decrease
of ($0.3)  million  from  properties  acquired in 2002,  and an increase of $3.2
million from  properties  acquired in 2003.  Rental  revenues  increased by $1.0
million from $97.4 million for the nine months ended September 30, 2002 to $98.4
million  for the same  period of 2003.  Of the $1.0  million  increase in rental
revenues,  ($7.0) million resulted from the Company's "Same Property" portfolio,
$1.8 million were  generated by  properties  acquired in 2002,  and $6.2 million
were generated by properties  acquired in 2003.  The overall  increase in rental
revenues was mainly a result of the San Tomas  Technology  Park  acquisition  in
April  2003.   The  decline  in  rents  from  the  "Same   Property"  and  "2002
Acquisitions"   portfolios  resulted  from  property  vacancies.  The  Company's
occupancy  rate at  September  30,  2003  was  approximately  78%,  compared  to
approximately 86% at September 30, 2002.

EQUITY IN EARNINGS FROM UNCONSOLIDATED JOINT VENTURE
As of September 30, 2003,  the Company had  investments  in four R&D  buildings,
totaling 593,000 rentable square feet, through an unconsolidated  joint venture,
in which the Company  acquired a 50% interest in January 2003. The Company has a
non-controlling  limited  partnership  interest in this joint venture,  which it
accounts for using the equity method of  accounting.  For the three months ended
September  30,  2003,  the  Company   recorded   equity  in  earnings  from  the
unconsolidated  joint venture of approximately $0.6 million.  For the nine-month
period ended  September  30, 2003,  equity in earnings  from the  unconsolidated
joint venture was approximately $3.4 million, including $1.4 million relating to
a gain from the sale of real estate by the unconsolidated joint venture.

OTHER INCOME
Other income, including interest, increased to $0.6 million for the three months
ended  September 30, 2003 from $0.5 million for the third  quarter of 2002.  For
the nine months  ended  September  30, 2003 and 2002,  other  income,  including
interest,  was $1.9 million and $1.3 million,  respectively.  Utility rebate and
security deposit forfeitures  represented most of the increase. The Company does
not consider these transactions to be recurring items.

EXPENSES FROM CONTINUING OPERATIONS
Operating  expenses  and real  estate  taxes from  continuing  operations,  on a
combined  basis,  increased by $0.4 million,  or 8.0%, from $5.0 million to $5.4
million for the three months ended  September  30, 2002 and 2003,  respectively,
due to the  combined  effects  of  reductions  in  assessed  property  values on
existing  properties,  increase in repairs  and  maintenance  expenses,  and the
acquisition   of  the

                                     - 13 -
<PAGE>

San Tomas Technology Park in April 2003. Tenant  reimbursements  from continuing
operations  decreased by $0.4 million,  or 7.7%, from $5.2 million for the three
months  ended  September  30, 2002 to $4.8  million for the three  months  ended
September  30,  2003.  The  decrease in tenant  reimbursements  was due to lower
occupancy.  Certain expenses such as property insurance,  real estate taxes, and
other fixed expenses are not recoverable from vacant properties.

Depreciation and amortization expense of real estate from continuing  operations
increased by $1.2 million from $4.6 million to $5.8 million for the three months
ended September 30, 2002 and 2003, respectively. Of the $1.2 million increase in
depreciation and amortization expense of real estate, approximately $0.9 million
represented  amortization  expense  of  intangible  assets  resulting  from  the
acquisition of the San Tomas Technology Park (see note 8). Depreciation  expense
from continuing operations increased by $2.4 million from $13.4 million to $15.8
million for the nine months  ended  September  30, 2002 and 2003,  respectively,
reflecting the newly acquired San Tomas Technology Park.

Interest expense increased by $1.9 million,  or 79.2%, from $2.4 million for the
three months ended September 30, 2002 to $4.3 million for the three months ended
September 30, 2003. The increase in interest  expense  resulted from  additional
debt obtained by the Company,  consisting of a new revolving line of credit from
Cupertino  National  Bank put in place during the third quarter 2002, a new $100
million mortgage loan from  Northwestern  Mutual Life Insurance Company obtained
in early  January 2003,  and a new $80 million  mortgage loan from Citicorp USA,
Inc. obtained in early April 2003.  Interest expense (related parties) decreased
by $0.6  million,  or  66.7%,  from $0.9  million  for the  three  months  ended
September 30, 2002 to $0.3 million for the three months ended September 30, 2003
due to lower interest rates and the repayments of the Berg Group line of credit.
Total debt  outstanding,  including  amounts due related  parties,  increased by
$96.4 million,  or 40.8%, from $236.3 million as of September 30, 2002 to $332.7
million as of September 30, 2003.  Overall interest  expense,  including amounts
paid to related  parties,  for the quarter ended September 30, 2003 increased by
$1.3 million compared to the same quarter a year ago.

Interest expense increased by $5.1 million,  or 72.9%, from $7.0 million for the
nine months ended  September 30, 2002 to $12.1 million for the nine months ended
September  30,  2003.  Interest  expense  (related  parties)  decreased  by $2.0
million,  or 71.4%,  from $2.8 million for the nine months ended  September  30,
2002 to $0.8  million for the nine months  ended  September  30,  2003.  Overall
interest  expense for the nine months ended September 30, 2003 increased by $3.1
million  compared  to  the  nine  months  ended  September  30,  2002  with  the
substitution of new debt for the loan under the Berg Group line of credit.

Interest  expense for the three and nine month  periods in 2003  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, the Company draws
on the Cupertino  National Bank revolving line of credit,  and the Company seeks
alternative sources of credit.

NET INCOME TO MINORITY INTEREST AND NET INCOME TO COMMON STOCKHOLDERS
The minority interest portion of income decreased by $0.4 million, or 2.0%, from
$20.0 million for the three months ended September 30, 2002 to $19.6 million for
the three months ended  September  30, 2003.  Net income to common  stockholders
decreased  by $0.6  million,  or 13.3%,  from $4.5  million for the three months
ended  September  30, 2002 to $3.9 million for the same period in 2003.  For the
nine months ended September 30, 2003 and 2002, the minority  interest portion of
income was $60.8  million  and $67.0  million,  respectively,  resulting  in net
income to  stockholders  of $12.1 million and $13.8 million,  respectively.  The
decline in net income was primarily due to reduced  rental  revenues and because
net income for the prior year's  comparable  period included gain from a sale of
discontinued operations.  Minority interest represents the ownership interest of
all limited partners in the operating  partnerships  taken as a whole, which was
approximately 83% as of September 30, 2003 and 2002.

RECENT DEVELOPMENTS

RENTAL MARKET  CONDITIONS.  All of the Company's  properties  are located in the
Northern  California area known as Silicon Valley,  which generally  consists of
portions of Santa Clara County,  Southwestern  Alameda County,  Southeastern San
Mateo  County and Eastern  Santa Cruz  County.  The Silicon  Valley  economy and
business  activity 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  21.9% in late 2002 to 24.0% at the end of the third quarter 2003.
Total  vacant  R&D  square  footage  in  Silicon  Valley at the end of the third
quarter of 2003 amounted to 37.1 million  square feet,  of which 33.7%,  or 12.5
million  square feet,  was being offered  under  subleases.  Total  negative net
absorption in 2002 amounted to approximately  (10.9) million square feet. During
the first  nine  months of 2003,  there was total  negative  net  absorption  of
approximately (5.3) 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.

The Company's actual occupancy rate at September 30, 2003 was 78.3%,  which is a
significant  decline from the occupancy rate of 85.8% at September 30, 2002. The
Company  believes that its occupancy rate could decline further going forward if
key  tenants  seek  the  protection  of  the  bankruptcy   laws  or  discontinue
operations.  In addition,  leases with respect to approximately  76,000 rentable
square feet are expiring in the fourth quarter 2003.  The properties  subject to
these leases may take anywhere from six to 12 months or longer to re-lease.  The
Company expects the average 2003 renewal rental rates for these properties to be
approximately  equal to or,  perhaps,  below  current  rents.  If the Company is
unable to lease a  significant  portion of any vacant space or space  subject to
expiring

                                     - 14 -
<PAGE>

leases; if the Company  experiences  significant  tenant defaults as a result of
the current economic  downturn;  or if the Company is not able to lease space at
or above current market rates,  its results of operations and cash flows will be
adversely affected. The Company's operating results and ability to pay dividends
at current  levels remain  subject to a number of material  risks,  as indicated
under  the  caption  "Forward-Looking  Information"  below  and in  the  section
entitled "Risk Factors" in the Company's most recent annual report on Form 10-K.

                                     - 15 -
<PAGE>


CHANGES IN FINANCIAL CONDITION

For the nine months ended  September 30, 2003,  net  investments  in real estate
assets  increased by  approximately  $97.1 million from December 31, 2002 due to
the San Tomas  Technology Park  acquisition,  new tenant  improvements,  and the
acquisition  of a 50% interest in a joint  venture from the Berg Group under the
Berg Land Holdings  Option  Agreement for $1.8  million.  The Company  increased
total loan  indebtedness by  approximately  $99.2 million in connection with the
San Tomas  Technology  Park  acquisition  and issued  181,032 O.P. units for the
joint venture interest.

At  September  30,  2003,  total   stockholders'   equity,   net,  increased  by
approximately  $1.6  million  from  December  31, 2002 as the  Company  obtained
additional  capital from stock option  exercises and the exchange of O.P.  units
for the  Company's  common  stock while  incurring a deficit of ($0.6)  million.
During the nine months  ended  September  30,  2003,  stock  options to purchase
60,362  shares of common  stock were  exercised  at $4.50 per  share,  and stock
options to purchase  50,000  shares of common stock were  exercised at $8.25 per
share. Total proceeds to the Company were approximately $0.7 million. During the
first nine months of 2003, two limited partners exchanged 157,000 O.P. units for
157,000 shares of the Company's common stock under the Exchange Rights Agreement
among the Company and the limited  partners in the operating  partnerships.  The
newly issued shares increased  additional paid in capital by approximately  $2.3
million.

LIQUIDITY AND CAPITAL RESOURCES

The Company  expects its  principal  sources of liquidity for  distributions  to
stockholders and unit holders,  debt service,  leasing commissions and recurring
capital expenditures to come from operations and/or other credit facilities that
currently  exists or that may be  established  by the  Company  with third party
financial  institutions.  The Company  expects  these sources of liquidity to be
adequate to meet projected  distributions  to  stockholders  and other presently
anticipated  liquidity  requirements  during  the next 12  months.  The  Company
expects to meet its long-term liquidity requirements for the funding of property
development,  property  acquisitions  and other material  non-recurring  capital
improvements  through  long-term  secured  and  unsecured  indebtedness  and the
issuance of additional  equity  securities  by the Company.  The Company has the
ability to meet  short-term  obligations or other  liquidity  needs based on its
existing  lines of credit.  Despite the current  weakness  in the  economy,  the
Company  expects  interest  expense to increase,  but not  significantly,  as it
incurs  debt  through  acquisitions  of new  properties  and as  interest  rates
increase.

On January 9, 2003, the Company  obtained a $100 million  secured  mortgage loan
from Northwestern Mutual Life Insurance Company ("Northwestern Loan") that bears
a fixed  interest  rate at 5.64% and  matures  in  January  2013 with  principal
payments amortized over 20 years. The mortgage loan is secured by 11 properties.
The Company paid  approximately  $675,000 in loan fees and  financing  costs and
used the proceeds to primarily pay down  short-term debt and the Berg Group line
of credit.

On April 9, 2003, the Company obtained an $80 million  short-term  mortgage loan
from Citicorp USA, Inc.  ("Citicorp  Loan") that bears interest at LIBOR plus 2%
and matures in April 2004. The Company paid $200,000 in financing costs and used
the proceeds to acquire the San Tomas  Technology  Park  property.  The original
loan term was 120 days,  but the  Company and  Citicorp  USA,  Inc.  agreed to a
nine-month loan term extension in June 2003.

On October 9, 2003,  the  Company  paid  dividends  of $0.24 per share of common
stock to all common stockholders of record as of September 30, 2003. On the same
date, the operating  partnerships  paid a distribution of $0.24 per O.P. unit to
all holders of O.P. units.

DEBT
At September 30, 2003,  the Company had total  indebtedness  of $332.7  million,
including  $301.1 million of fixed rate mortgage  debt,  $10.8 million under the
Berg Group  mortgage note (related  parties),  $20.0 million under the Cupertino
National  Bank line of  credit,  and $0.8  million  under the Berg Group line of
credit (related parties), as detailed in the table below:

                                     - 16 -

<PAGE>

     The following table sets forth information regarding debt outstanding as of
September 30, 2003:

<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     $       769            3/04        (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                                   19,966            7/04        (3)
                                                                                         ------------------

Mortgage Notes Payable (related parties):      5300 & 5350 Hellyer Avenue, San Jose, CA         10,843            6/10       7.650%
                                                                                         ------------------
Mortgage Notes Payable:
Prudential Capital Group                       20400 Mariani Avenue, Cupertino, CA                 791           10/06       8.750%
Washington Mutual (Home Savings & Loan Assoc.) 10460 Bubb Road, Cupertino, CA                      244           12/06       9.500%
Prudential Insurance Company of America (2)    10300 Bubb Road, Cupertino, CA                  121,938           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
                                               450-460 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     1750 Automation Parkway, San Jose, CA            98,142            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 Via Del Oro, 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            4/04        (3)
                                               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                                                                301,115
                                                                                         ------------------

TOTAL                                                                                      $   332,693
                                                                                         ==================
</TABLE>


(1)  The debt owed to the Berg Group under the line of credit carries a variable
     interest  rate  equal to LIBOR  plus  1.30% and is payable in full in March
     2004. The interest rate at September 30, 2003 was 2.48%.
(2)  John Kontrabecki, one of the limited partners, has guaranteed approximately
     $12,000 of this debt.
(3)  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
     September 30, 2003 were 3.10% and 3.14%, respectively.

                                     - 17 -

<PAGE>


As of September  30, 2003,  the  Company's  debt to total market  capitalization
ratio was  approximately  20.5%,  based upon a total  market  capitalization  of
approximately  $1.6  billion.  The Company  computed  this ratio by dividing the
Company's  total debt  outstanding  as of September  30, 2003 by the sum of this
debt plus the market  value of common  stock  (based upon the  closing  price of
$12.36 per share on September  30, 2003) on a fully diluted  basis,  taking into
account the conversion of all O.P. units into common stock.

HISTORICAL CASH FLOWS

Net cash provided by operating  activities  for the nine months ended  September
30,  2003 was $91.8  million  compared  to $97.2  million for the same period in
2002.  The decline  resulted  primarily from the decrease in rental revenue from
the  Company's  current  portfolio of property  due to tenant  lease  obligation
defaults during 2002 and 2003.

Net cash used in investing  activities was  approximately  ($109.9)  million and
($20.5)  million  for the  nine  months  ended  September  30,  2003  and  2002,
respectively.  Of the ($109.9)  million net cash used in  investing  activities,
($110) million was used to acquire the San Tomas Technology Park property,  $1.4
million was received  from the sale of joint  venture  real  estate,  and ($1.3)
million was used for tenant improvements and new equipment.

Net cash provided by financing  activities was $18.7 million for the nine months
ended  September  30,  2003  compared  to  ($75.0)  million  used  in  financing
activities  for the same  period  in 2002.  Of the $18.7  million  net cash from
financing activities,  ($86.1) million was used to pay outstanding debt, ($62.4)
million for minority interest distributions,  and ($12.7) million for dividends.
The Company obtained  approximately $180 million from financing activity,  which
included the  Northwestern  Loan, the Citicorp  Loan,  net of related  financing
costs, and proceeds from the exercise of stock options.

CAPITAL EXPENDITURES

The Company's  existing R&D properties  require periodic  investments of capital
for tenant-related  capital  expenditures and for general capital  improvements.
For the years ended  December 31, 1997 through  December 31, 2002, the recurring
tenant  improvement costs and leasing  commissions  incurred with respect to new
leases and lease  renewals of the  properties  that were owned or  controlled by
members of the Berg Group  prior to July 1, 1998  averaged  approximately  $1.75
million annually.  The Company expects that the average annual cost of recurring
tenant improvements and leasing commissions,  related to the properties, will be
approximately  $2.0 million  during 2003.  The Company  believes it will recover
substantially  all of these sums from the tenants  under new or renewed  leases.
The Company expects to meet its long-term liquidity requirements for the funding
of property development,  property acquisitions and other material non-recurring
capital  improvements  through long-term secured and unsecured  indebtedness and
the issuance of additional equity securities by the Company.

FUNDS FROM OPERATIONS

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

The Company's  definition of FFO also assumes conversion at the beginning of the
period of all convertible securities, including minority interests that might be
exchanged  for common stock.  FFO does not  represent  the amount  available for
management's  discretionary  use  as  such  funds  may  be  needed  for  capital
replacement  or expansion,  debt service  obligations or other  commitments  and
uncertainties.  Furthermore,  FFO is not comparable to similarly  entitled items
reported by other REITs that do not define them  exactly as the Company  defines
FFO. FFO for the three and nine months  ended  September  30, 2003 and 2002,  as
reconciled to net income to common stockholders, are summarized in the following
tables:

                                     - 18 -
<PAGE>

<TABLE>
<CAPTION>


                                                  Three Months Ended September 30,             Nine Months Ended September 30,
                                              -----------------------------------------    -----------------------------------------
                                                    2003                   2002                  2003                   2002
                                              ------------------     ------------------    ------------------     ------------------
                                                       (Dollars in thousands)                        (Dollars in thousands)
<S>                                             <C>                    <C>                    <C>                    <C>
Net income to common stockholders                $ 3,943                $ 4,558                $12,132                $13,832
Add:
    Minority interests (1)                        19,474                 19,941                 60,331                 66,546
    Depreciation and amortization (2)              5,797                  4,552                 15,758                 13,409
Less:
    Gain on sale of JV assets / assets                 -                      -                 (1,400)                (6,103)
                                              ------------------     ------------------    ------------------     ------------------
Funds From Operations                            $29,214                $29,051                $86,821                $87,684
                                              ==================     ==================    ==================     ==================
</TABLE>

(1)  Excludes minority interest for unrelated parties.
(2)  Includes  depreciation  of real estate  from  discontinued  operations  and
     amortization  expense of costs  allocated to intangible  assets in property
     acquisitions.

DISTRIBUTION POLICY

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

-    the amount of cash available for distribution;

-    the Company's financial condition;

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

-    the Company's committed and projected capital expenditures;

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

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

-    cash required for re-leasing activities;

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

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

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

                                     - 19 -

<PAGE>


IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

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

In January 2003,  the released FASB  Interpretation  No. 46,  "Consolidation  of
Variable Interest Entities - an interpretation of ARB No. 15" ("FIN 46"). FIN 46
requires  that any entity  meeting  certain  rules and  relation  to a company's
equity  investment  risk and  level of  financial  control  be  considered  as a
variable  interest  entity.  The  statement  (as amended) is  applicable  to all
variable  interest  entities created or acquired after January 31, 2003, and the
first interim period  beginning  after December 15, 2003, for variable  interest
entities in which the Company holds a variable  interest that is acquired before
February  1, 2003.  The Company  plans on adopting  FIN 46 in the time frames as
required  by the  statement.  Management  expects no  significant  effect on the
consolidated  financial  position,  results of  operations  or cash flows of the
Company  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 ("SFAS 150").
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 150
was  effective  beginning in the third  quarter of 2003.  The FASB  deferred the
implementation  of  SFAS  150  as  applied  to  certain  minority  interests  in
finite-lived entities, however. The Company adopted the requirements of SFAS 150
in the third quarter of 2003, and considering the  aforementioned  deferral,  it
did not impact the Company's financial  position,  results of operations or cash
flows.

FORWARD-LOOKING INFORMATION

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

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

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

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

                                     - 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
September  30,  2003.  The current  terms of this debt are  described in Item 2,
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations - Liquidity and Capital Resources."

For variable rate debt, the table presents the assumption  that the  outstanding
principal balance at September 30, 2003 will be paid upon maturity.

For fixed rate debt,  the table  presents the  assumption  that the  outstanding
principal  balance at  September  30, 2003 will be paid  according  to scheduled
principal payments and that we will not prepay any of the outstanding  principal
balance.
<TABLE>
<CAPTION>

                                                2003       2004       2005      2006      2007   Thereafter    Total   Fair Value
                                                ----       ----       ----      ----      ----   ----------    -----   ----------
VARIABLE RATE DEBT:                                                         (Dollars in thousands)
<S>                                         <C>       <C>          <C>       <C>       <C>       <C>         <C>       <C>
   Secured debt                                        $100,735                                               $100,735  $100,735
   Weighted average interest rate                         3.13%
FIXED RATE DEBT:
   Secured notes payable                      $1,338     $5,612     $5,977    $6,245    $6,350    $206,436    $231,958  $257,319
   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  $0.8 million,  $20.0
million, and $80.0 million, or 0.2%, 6.0% and 24.0%, respectively,  of the total
$332.7 million of outstanding debt as of September 30, 2003. 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 September 30, 2003.

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 September 30, 2003, a 1%
increase or decrease in interest  rates on our $100.7  million of floating  rate
debt would  decrease or increase,  respectively,  nine months  earnings and cash
flows by approximately  $0.76 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.

ITEM 4
CONTROLS AND PROCEDURES

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

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

                                     - 21 -
<PAGE>




ITEM 6
EXHIBITS AND REPORTS ON FORM 8-K

         a.       Exhibits

                  31.1   Section 1350 Certificate of CEO
                  31.2   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

                  The Company filed a Current Report on Form 8-K on July 14,
                  2003, regarding its results of operations and financial
                  condition for the second quarter of 2003.

                                     - 22 -
<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:   November 11, 2003            By:    /s/ Carl E. Berg
                                        ------------------------------------
                                        Carl E. Berg
                                        Chief Executive Officer


Date:   November 11, 2003            By:    /s/ Wayne N. Pham
                                        ------------------------------------
                                        Wayne N. Pham
                                        Vice President of Finance and Controller
                                        (Principal Accounting Officer and Duly
                                        Authorized Officer)

                                     - 23 -

<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 September 30, 2003;

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 the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  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

November 11, 2003



<PAGE>


Exhibit 31.2


                             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 September 30, 2003;

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 the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  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

November 11, 2003



<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 September 30,
2003 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
November 11, 2003


======================================================
Wayne N. Pham
Vice President of Finance and Controller
November 11, 2003

     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.