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

                                    Form 10-Q


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

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002

                          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


                      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:

                17,463,329 shares outstanding as of May 14, 2002


                                     - 1 -

<PAGE>


                          Mission West Properties, Inc.

                                    FORM 10-Q
                      FOR THE QUARTER ENDED MARCH 31, 2002
<TABLE>
<CAPTION>


                                      INDEX

                                                                                                                     Page
                                                                                                                     ----
<S>          <C>                                                                                                    <C>
PART I        FINANCIAL INFORMATION

   Item 1.    Financial Statements (unaudited):

              Consolidated Balance Sheets as of March 31, 2002 (unaudited)
              and December 31, 2001...................................................................................3

              Consolidated Statements of Operations for the three
              months ended March 31, 2002 and 2001 (unaudited)........................................................4

              Consolidated Statements of Cash Flows for the
              three months ended March 31, 2002 and 2001 (unaudited)..................................................5

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

   Item 2.    Management's Discussion and Analysis of Financial
              Condition and Results of Operations.....................................................................9

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


PART II       OTHER INFORMATION

   Item 6.     Exhibits and Reports on Form 8-K......................................................................19

SIGNATURES...........................................................................................................19
</TABLE>


                                     - 2 -
<PAGE>


PART I - FINANCIAL INFORMATION
ITEM 1   CONSOLIDATED FINANCIAL STATEMENTS

                          MISSION WEST PROPERTIES, INC.
                           CONSOLIDATED BALANCE SHEETS
                (Dollars in thousands, except per share amounts)
                                    ---------
<TABLE>
<CAPTION>
                                                                                  March 31, 2002         December 31, 2001
                                                                               ----------------------  ----------------------
                                                                                    (Unaudited)
                                     ASSETS
<S>                                                                                  <C>                     <C>
Real estate assets, at cost
    Land                                                                              $231,412                $218,058
    Buildings                                                                          710,663                 692,485
                                                                               ----------------------  ----------------------
                                                                                       942,075                 910,543
    Less accumulated depreciation                                                      (52,988)                (49,608)
                                                                               ----------------------  ----------------------
       Net real estate assets                                                          889,087                 860,935
Cash and cash equivalents                                                                7,498                   5,310
Restricted cash                                                                          2,715                  15,435
Deferred rent                                                                           16,143                  16,923
Other assets                                                                            15,624                  11,652
                                                                               ----------------------  ----------------------
       Total assets                                                                   $931,067                $910,255
                                                                               ======================  ======================

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
    Line of credit (related parties)                                                  $ 85,089                $ 79,887
    Unsecured loan                                                                      20,000                       -
    Mortgage notes payable                                                             126,918                 127,416
    Mortgage notes payable (related parties)                                            11,300                  11,371
    Interest payable                                                                       342                     342
    Security deposits                                                                    7,600                   7,337
    Prepaid rental income                                                               13,940                  12,470
    Dividends/distributions payable                                                     24,872                  24,742
    Refundable option payment                                                                -                  18,836
    Accounts payable and accrued expenses                                                4,980                   4,367
                                                                               ----------------------  ----------------------
       Total liabilities                                                               295,041                 286,768

Commitments and contingencies (Note 8)

Minority interest                                                                      525,173                 515,063

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, 17,463,329 and 17,329,779 shares issued and
       outstanding at March 31, 2002 and December 31, 2001,
       respectively                                                                         17                      17
    Paid-in-capital                                                                    128,046                 126,626
    Accumulated deficit                                                                (17,210)                (18,219)
                                                                               ----------------------  ----------------------
       Total stockholders' equity                                                      110,853                 108,424
                                                                               ----------------------  ----------------------
       Total liabilities and stockholders' equity                                     $931,067                $910,255
                                                                               ======================  ======================
</TABLE>




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

                                     - 3 -
<PAGE>


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

                                                        Three months ended March 31,
                                                         2002                  2001
                                                 --------------------  --------------------
<S>                                                  <C>                   <C>
Revenues:
   Rental income from real estate                        $32,484               $29,679
   Tenant reimbursements                                   5,326                 3,488
   Other income, including interest                          497                   516
                                                 --------------------  --------------------
        Total revenues                                    38,307                33,683
                                                 --------------------  --------------------

Expenses:
   Operating expenses                                      2,275                 1,225
   Real estate taxes                                       3,057                 2,321
   Depreciation of real estate                             4,356                 4,102
   General and administrative                                434                   318
   Interest                                                2,270                 2,209
   Interest (related parties)                              1,010                 1,300
                                                 --------------------  --------------------
       Total expenses                                     13,402                11,475
                                                 --------------------  --------------------

Income before minority interest and
   discontinued operations                                24,905                22,208
Minority interest                                         20,769                18,507
                                                 --------------------  --------------------
   Income from continuing operations                       4,136                 3,701
                                                 --------------------  --------------------

Discontinued operations:
Gain from disposal of discontinued operations              6,103                 3,101
Gain from discontinued operations                            287                     -
                                                 --------------------  --------------------
   Net gain from discontinued operations                   6,390                 3,101
                                                 --------------------  --------------------

Net income to minority interest                          $26,094               $21,090
                                                 ====================  ====================
Net income to common stockholders                        $ 5,201               $ 4,219
                                                 ====================  ====================
Income per share from continuing operations:
   Basic                                                 $  0.24               $  0.22
                                                 ====================  ====================
   Diluted                                               $  0.23               $  0.21
                                                 ====================  ====================
Income per share from discontinued operations:
   Basic                                                       -                     -
                                                 ====================  ====================
   Diluted                                                     -                     -
                                                 ====================  ====================
Net income per share to common stockholders:
   Basic                                                 $  0.24               $  0.22
                                                 ====================  ====================
   Diluted                                               $  0.23               $  0.21
                                                 ====================  ====================
Weighted average number of shares of
   common stock outstanding (basic)                   17,404,568            17,037,201
                                                 ====================  ====================
Weighted average number of shares of
   common stock outstanding (diluted)                 17,853,809            17,242,821
                                                 ====================  ====================
</TABLE>



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

                                     - 4 -
<PAGE>


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

                                                                                             Three months ended March 31,
                                                                                         -------------------------------------
                                                                                               2002               2001
                                                                                         ------------------ ------------------
<S>                                                                                     <C>                <C>
Cash flows from operating activities:
     Net income                                                                          $     5,201        $     4,219
     Adjustments to reconcile net income to net cash provided by
       operating activities:
            Minority interest                                                                 26,094             21,090
            Depreciation                                                                       4,402              4,102
            Gain on sales of real estate                                                      (6,103)            (3,101)
            Other                                                                                (18)               (95)
     Changes in assets and liabilities:
            Deferred rent                                                                        780             (2,089)
            Other assets                                                                      (3,972)            (3,674)
            Security deposits                                                                    263                294
            Prepaid rental income                                                              1,470              1,652
            Accounts payable and accrued expenses                                                471                (90)
                                                                                         ------------------ ------------------
     Net cash provided by operating activities                                                28,588             22,308
                                                                                         ------------------ ------------------

Cash flows from investing activities:
     Improvements to real estate assets                                                            -               (154)
     Refundable option payment                                                               (18,836)              (500)
     Real estate purchase                                                                    (31,311)                 -
     Proceeds from sales of real estate                                                       18,591             23,130
     Restricted cash                                                                          15,435                  -
     Restricted cash available                                                                (2,715)           (23,130)
                                                                                         ------------------ ------------------
     Net cash used in investing activities                                                   (18,836)              (654)
                                                                                         ------------------ ------------------

Cash flows from financing activities:
     Principal payments on mortgage notes payable                                               (498)              (495)
     Principal payments on mortgage notes payable (related parties)                              (71)               (66)
     Net payments under line of credit (related parties)                                      (2,298)            (6,737)
     Proceeds from unsecured loan                                                             20,000                  -
     Financing costs                                                                             (52)                 -
     Proceeds from stock options exercised                                                       151                148
     Minority interest distributions                                                         (20,637)           (15,908)
     Dividends paid                                                                           (4,159)            (3,236)
                                                                                         ------------------ ------------------
     Net cash used in financing activities                                                    (7,564)           (26,294)
                                                                                         ------------------ ------------------
     Net increase/(decrease) in cash and cash equivalents                                      2,188             (4,640)
Cash and cash equivalents, beginning                                                           5,310              4,691
                                                                                         ------------------ ------------------
Cash and cash equivalents, ending                                                        $     7,498        $        51
                                                                                         ================== ==================

Supplemental information:
     Cash paid for interest                                                              $      3,168       $     3,488
                                                                                         ================== ==================
Supplemental schedule of non-cash investing and financing activities:
     Debt incurred in connection with property acquisitions (related parties)            $      7,500       $    20,000
                                                                                         ================== ==================
     Assumption of other liabilities in connection with property acquisitions            $        398       $         -
                                                                                         ================== ==================
     Issuance of operating partnership units in connection with property acquisitions    $      6,152       $    13,281
                                                                                         ================== ==================

</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 share and per share data)
                                   (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.

     Minority  interest   represents  the  separate  private  ownership  of  the
     operating  partnerships  by the Berg Group  (defined  as Carl E. Berg,  his
     brother Clyde J. Berg, members of their respective immediate families,  and
     certain entities they control) and other non-affiliate interests. In total,
     these interests account for approximately 83% of the ownership interests in
     the real estate  operations  of the Company as of March 31, 2002.  Minority
     interest in earnings  has been  calculated  by taking the net income of the
     operating   partnerships  (on  a  stand-alone   basis)  multiplied  by  the
     respective minority interest ownership percentage.

     The financial  statements  have been prepared in accordance with accounting
     principles  generally  accepted  in the United  States of America  ("GAAP")
     applicable to interim  financial  information and pursuant to the rules and
     regulations of the Securities and Exchange Commission. Accordingly, certain
     information  and  footnote   disclosures  normally  included  in  financial
     statements  prepared in accordance with GAAP have been condensed or omitted
     pursuant  to  such  rules  and  regulations.  However,  in the  opinion  of
     management,   all   adjustments,   consisting  only  of  normal   recurring
     adjustments,  necessary for a fair  presentation  have been  included.  The
     Company presumes that users of the interim financial  information have read
     or have access to the audited financial statements for the preceding fiscal
     year and that the  adequacy  of  additional  disclosure  needed  for a fair
     presentation  may be determined in that context.  The results of operations
     for the three months ended March 31, 2002 are not necessarily indicative of
     the results to be expected for the entire year.

     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 9).

     The  Company  has  elected to be taxed as a real  estate  investment  trust
     ("REIT") under the Internal Revenue Code of 1986, as amended.  Accordingly,
     no  provision  has been made for income  taxes for the three  months  ended
     March 31, 2002.

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 284 acres of Silicon Valley
     land,  including land under development,  owned directly or under 50% joint
     venture entities,  by certain members of the Berg Group that are subject to
     the terms of the Berg land  holdings  option  agreement.  The owners of the
     future  R&D  property  developments  may obtain  cash or, at their  option,
     operating  partnership  interests  ("O.P.  Units")  valued  at the  average
     closing  price of shares of common  stock  over the  30-trading-day  period
     preceding  the  acquisition  date.  As of March 31,  2002,  the Company had
     completed  seventeen  acquisitions  under  the Berg  land  holdings  option
     agreement representing  approximately  1,699,000 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 $8.50 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.

                                     - 6 -
<PAGE>

     No  estimate  can be given at this time as to the total cost to the Company
     to acquire projects under the Berg land holdings option  agreement,  or the
     timing of the Company's  acquisition of any of such projects.  However, the
     Berg Group currently has four properties under  development with a total of
     approximately  476,000  rentable  square  feet of R&D  properties  that the
     Company  has the  right  to  acquire  under  this  agreement.  Of the  four
     properties,  three  are  joint  ventures  in  which  the Berg  Group  holds
     approximately a 50% interest.  The joint venture  properties  prospectively
     represent a total of  approximately  311,000  rentable  square feet.  As of
     March  31,  2002,  the  estimated   acquisition   price  to  the  operating
     partnerships  for these four projects would be approximately  $54,600.  The
     final acquisition price of these four properties could differ significantly
     from this estimate.  In addition to projects  currently under  development,
     the Company has the right to acquire future  developments by the Berg Group
     on up to 250  additional  acres of land  currently  controlled  by the Berg
     Group,  which could support  approximately  3.9 million  square feet of new
     developments. 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.

     PROPERTY DISPOSITION
     On March 6,  2002,  the  Company  completed  the  sale,  in a  tax-deferred
     exchange, of a 72,400 square foot R&D property located at 2001 Logic Drive,
     San Jose, California to Xilinx, Inc., which had exercised a purchase option
     in the same month.  The Company realized a gain of $6,103 on the total sale
     price of  approximately  $18,503.  At March 31, 2002, the proceeds from the
     sale of this  property were  classified  as  restricted  cash to be used in
     tax-deferred property exchanges.

     PROPERTY ACQUISITIONS
     Effective  January 1, 2002, the Company acquired an  approximately  125,000
     rentable square foot newly constructed R&D building located at 5345 Hellyer
     Avenue  in San Jose,  California  from the Berg  Group  under the Berg land
     holdings option  agreement.  The total  acquisition price for this property
     was $13,652.  The Company  acquired this property by borrowing $7,500 under
     the Berg Group line of credit and  issuing  502,805  O.P.  Units to various
     members of the Berg Group.

     Effective March 8, 2002, the Company acquired three R&D buildings  totaling
     approximately 206,500 rentable square foot located at 2610 and 2630 Orchard
     Parkway  and 55 West  Trimble  Road in San Jose,  California  from  Silicon
     Valley Properties, LLC in a tax-deferred exchange transaction involving the
     Company's  former R&D properties  located at 2001 Logic Drive and 5713-5729
     Fontanoso Way, San Jose,  California.  The total  acquisition price for the
     properties  acquired from Silicon Valley Properties,  LLC was approximately
     $31,250.

3.   Restricted Cash

     At March 31, 2002, restricted cash represents the remaining proceeds from a
     property sale and interest  income being held in a separate cash account at
     a trust  company in order to preserve  the  Company's  option of  receiving
     replacement property on a tax-deferred basis.

4.   Stock Transactions

     During the three  months ended March 31,  2002,  stock  options to purchase
     33,550  shares of common  stock were  exercised  at $4.50 per share.  Total
     proceeds to the Company were $151.  In January  2002, a limited  partner of
     one of the operating  partnerships exchanged 100,000 O.P. Units for 100,000
     shares of the  Company's  common stock under the terms of the December 1998
     exchange rights agreement among the Company and all limited partners of the
     operating partnerships.

5.   Net Income Per Share

     Basic  operating  net income per share is computed by dividing  net income,
     excluding gain on sale of real estate,  by the  weighted-average  number of
     common shares outstanding for the period.  Diluted operating net income per
     share is computed by dividing  net income,  excluding  gain on sale of real
     estate,  by  the  sum of  the  weighted-average  number  of  common  shares
     outstanding  for the  period  plus the  assumed  exercise  of all  dilutive
     securities.

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


                                                         Three Months Ended March 31,
                                                        -------------------------------
                                                             2002             2001
                                                        --------------    -------------
<S>                                                      <C>              <C>
     Weighted average shares outstanding (basic)          17,404,568       17,037,201
     Incremental shares from assumed option exercise         449,241          205,620
                                                        --------------    -------------
     Weighted average shares outstanding (diluted)        17,853,809       17,242,821
                                                        ==============    =============
</TABLE>

                                     - 7 -
<PAGE>


     The  outstanding  O.P. Units,  which are  exchangeable at the unit holder's
     option,  subject to  certain  conditions,  for shares of common  stock on a
     one-for-one  basis have been excluded from the diluted net income per share
     calculation,  as there  would  be no  effect  on the  amounts  because  the
     minority interests' share of income would also be added back to net income.
     The total number of O.P.  Units  outstanding at March 31, 2002 and 2001 was
     86,165,346 and 84,547,078, respectively.

6.   Related Party Transactions

     As of March 31, 2002, the Berg Group owned 78,133,436 O.P. Units.  Combined
     with shares of the Company's common stock owned by the Berg Group, the Berg
     Group's ownership as of March 31, 2002 represented approximately 75% of the
     equity interests of the Company, assuming conversion of the 86,165,346 O.P.
     Units outstanding into the Company's common stock.

     As of March 31, 2002,  debt in the amount of $85,089 was due the Berg Group
     under the line of credit  established  March 1,  2000.  The Berg Group $100
     million line of credit is currently  collateralized  by eleven  properties,
     bears interest at LIBOR plus 1.30%,  and matures in March 2003. The Company
     believes that the terms of the Berg Group line of credit are more favorable
     than those available from commercial lenders. As of March 31, 2002, debt in
     the  amount  of  $11,300  was due the  Berg  Group  under a  mortgage  note
     established  May 15,  2000 in  connection  with  the  acquisition  of a 50%
     interest in Hellyer  Avenue  Limited  Partnership,  the  obligor  under the
     mortgage note. The mortgage note bears interest at 7.65%,  and is due in 10
     years with principal payments amortized over 20 years.

     Carl E. Berg has a  substantial  financial  interest  in one  company  that
     leases space from the operating  partnerships.  This company occupies 5,862
     square  feet at $0.93 per square  foot per month.  This lease was in effect
     prior to the Company's  acquisition of its general partnership interests in
     July 1998. The lease expires in May 2003.

     The Company currently leases office space owned by Berg & Berg Enterprises,
     Inc.,  an affiliate of Carl E. Berg and Clyde J. Berg.  Rental  amounts and
     overhead reimbursements paid to Berg & Berg Enterprises,  Inc. were $23 for
     each of the three-month periods ended March 31, 2002 and 2001.

7.   Subsequent Events

     On April 11, 2002,  the Company paid dividends of $0.24 per share of common
     stock to all common  stockholders  of record as of March 29,  2002.  On the
     same date, the operating partnerships paid a distribution of $0.24 per O.P.
     Unit.

8.   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 seismic
     activity, although they do cover losses from fires after an earthquake.

9.   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.  Prior period
     statement of  operations  have been  reclassified  to reflect the income or
     loss related to  properties  that were sold and  presented as  discontinued
     operations during the three months ended March 31, 2002. Additionally,  all
     periods  presented will likely require further  reclassification  in future
     periods if additional property sales occur.

     As of March 31, 2002, there were no properties under contract to be sold or
     disposed of which would qualify as discontinued operations.

     In March 2002,  the Company sold one  property  for a gain of $6,103.  Gain
     from  operation for this property was  approximately  $287 and $430 for the
     three  months  ended  March  31,  2002 and  2001,  respectively.  Condensed
     operations  for the  three  months  ended  March  31,  2002 and 2001 are as
     follows:

                                     - 8 -

<PAGE>

<TABLE>
<CAPTION>


                                            Three Months Ended March 31,
                                        --------------------------------------
                                             2002                 2001
                                        ---------------    -------------------
                                               (Dollars in thousands)
<S>                                         <C>                  <C>
         Rental income from real estate      $333                 $500
         Tenant reimbursements                293                   23
                                        ---------------    -------------------
               Total revenues                 626                  523

         Real estate taxes                    293                   23
         Depreciation                          46                   70
                                        ---------------    -------------------
              Total expenses                  339                   93
                                        ---------------    -------------------
                   Net income                $287                 $430
                                        ===============    ===================
</TABLE>


                                     - 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, 2001.  The
results for the three months ended March 31, 2002 are not necessarily indicative
of the results to be expected  for the entire  fiscal year ending  December  31,
2002. The following discussion includes  forward-looking  statements,  including
but not limited to,  statements with respect to the Company's  future  financial
performance,  operating results, plans and objectives. Actual results may differ
materially from those currently anticipated depending upon a variety of factors,
including  those  described  below  under  the   sub-heading,   "Forward-Looking
Information."

OVERVIEW

Mission West Properties,  Inc. (the "Company")  acquires,  markets,  leases, and
manages  R&D and office  properties,  primarily  located in the  Silicon  Valley
portion of the San Francisco  Bay Area. As of March 31, 2002,  the Company owned
and managed 100 properties  totaling  approximately  7.0 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. The four
tenants  who  lease the most  square  footage  from the  Company  are  Microsoft
Corporation,  JDS Uniphase  Corporation,  Amdahl  Corporation  (a  subsidiary of
Fujitsu Limited),  and Apple Computer,  Inc. For federal income tax purposes the
Company has operated as a self-managed,  self-administered  and fully integrated
real estate investment trust ("REIT") since fiscal 1999.

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

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

-    capitalizing   on   opportunistic   acquisitions   from  third  parties  of
     high-quality  R&D 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.


                                     - 10 -

<PAGE>


RESULTS OF OPERATIONS

COMPARISON  OF THE THREE  MONTHS  ENDED MARCH 31, 2002 TO THE THREE MONTHS ENDED
MARCH 31, 2001.

As of March 31, 2002,  the  Company,  through its  controlling  interests in the
operating partnerships,  owned 100 properties totaling approximately 7.0 million
square feet compared to 90 properties totaling  approximately 6.2 million square
feet owned by the Company as of March 31, 2001.  This  represents a net increase
of  approximately  13% in total rentable square footage from one year ago. Since
March 31, 2001 the Company has acquired the properties listed below and disposed
of 77,700  rentable  square feet at 5713-5729  Fontanoso Way and 72,400 rentable
square feet at 2001 Logic Drive in San Jose, California.
<TABLE>
<CAPTION>

                                                                     Rentable Square
 Date of Acquisition                     Address                          Footage
---------------------     --------------------------------------    ---------------------
<S>                      <C>                                              <C>
       04/01              245 Caspian Drive (1)(3)                          59,400
       05/01              855 Branham Lane East (1)                         67,912
       06/01              5550 Hellyer Avenue                               78,794
       07/01              5906-65 Silver Creek Valley Rd. I (2)            247,500
       08/01              5750 Hellyer Avenue                               73,312
       10/01              5905-65 Silver Creek Valley Rd. II                98,500
       01/02              5345 Hellyer Avenue                              125,000
       03/02              2630 Orchard Parkway (4)                          60,633
       03/02              2610 Orchard Parkway (4)                          54,093
       03/02              55 West Trimble (4)                               91,722
                                                                    ---------------------
                                                                           956,866
                                                                    =====================
</TABLE>

(1)  Acquired in a  tax-deferred  exchange from the sale of R&D property at 4949
     Hellyer Avenue, San Jose, California.
(2)  Three buildings were acquired at this location.
(3)  The lessee at this location will terminate its lease  effective May 2002 in
     a negotiated  settlement  with us. The building has not been  completed for
     occupancy, which was at the option of the lessee.
(4)  Acquired in a  tax-deferred  exchange  from the sale of R&D  properties  at
     5713-5729 Fontanoso Way and 2001 Logic Drive, San Jose, California.


The  following  tables  reflect the increase in the Company's  rental  revenues,
excluding  rental revenues from  discontinued  operations,  for the three months
ended March 31, 2002 over rental  revenues  for the  comparable  three months in
2001:
<TABLE>
<CAPTION>

                            Three Months Ended March 31,
                          ---------------------------------
                                                                                      % Change by         % of Total Net
                              2002               2001              $ Change          Property Group           Change
                          --------------     --------------     ----------------     ---------------     -----------------
                                         (Dollars in thousands)

<S>                         <C>                <C>                <C>                   <C>                   <C>
   Same Property (1)         $25,910            $28,243            ($ 2,333)              (8.3%)               (7.9%)
   2001 Acquisitions (2)       5,534              1,436               4,098              285.4%                13.8%
   2002 Acquisitions           1,040                  -               1,040              100.0%                 3.5%
                          --------------     --------------     ----------------                         -----------------
                             $32,484            $29,679             $ 2,805                9.4%                 9.4%
                          ==============     ==============     ================                         =================
</TABLE>


(1)  "Same  Property"  is  defined  as  properties  owned as of July 1, 1998 and
     acquired in 1998, 1999 and 2000 and still owned as of March 31, 2002.
(2)  The figures for "2001 Acquisitions" in year 2001 for some properties do not
     reflect a full three months of rent due to the timing of the acquisition of
     the properties during 2001.

RENTAL REVENUE FROM CONTINUING OPERATIONS
For the quarter ended March 31, 2002, rental revenues  increased by $2.8 million
from $29.7  million for the three months  ended March 31, 2001 to $32.5  million
for the  same  period  of  2002,  which  included  a  decrease  of $1.4  million
straight-line rent adjustment.  Of the $2.8 million increase in rental revenues,
($2.3)  million  resulted from the Company's  "Same  Property"  portfolio,  $4.1
million resulted from properties acquired in 2001 and $1.0 million resulted from
properties  acquired in 2002.  Approximately $0.3 million in rental revenues was
generated  from a  discontinued  operation  for the three months ended March 31,
2002. The decline in rental  revenues from the "same  property"  portfolio was a
result  from  adverse  market  conditions  and  loss  of  seven  tenants  due to
bankruptcy  or cease of  operations.  The net  increase in rental  revenues  was
primarily attributable to new acquisitions.

OTHER INCOME FROM CONTINUING OPERATIONS
Other income, including interest, was approximately $0.5 million for each of the
three-month periods ended March 31, 2002 and 2001.

                                     - 11 -
<PAGE>

EXPENSES FROM CONTINUING OPERATIONS
Tenant  reimbursements from continuing  operations increased by $1.8 million, or
51%, from $3.5 million for the three months ended March 31, 2001 to $5.3 million
for the three months ended March 31,  2002.  Operating  expenses and real estate
taxes from continuing  operations,  on a combined basis,  also increased by $1.8
million,  or 51%,  from $3.5  million to $5.3 million for the three months ended
March 31, 2001 and 2002, respectively.  Both tenant reimbursements and operating
expenses  combined  with real estate taxes from a  discontinued  operation  were
approximately  $0.3  million  each for the  quarter  ended March 31,  2002.  The
increases in all  categories  resulted  primarily from the increase in the total
rentable square footage since March 31, 2001.

Depreciation  expense from continuing  operations increased by $0.3 million from
$4.1 million to $4.4 million for the three months ended March 31, 2001 and 2002,
respectively.   Depreciation   expense  from  a   discontinued   operation   was
approximately  $46,000 for the quarter  ended March 31,  2002.  The increase was
attributable to the acquisition of twelve R&D properties since March 31, 2001.

Interest expense increased by $0.06 million, or 2.7%, from $2.21 million for the
three  months  ended March 31, 2001 to $2.27  million for the three months ended
March 31, 2002 from additional debt that the Company  incurred under a new $20.0
million  unsecured  loan obtained  from Citicorp  during the first quarter 2002.
Interest expense (related  parties)  decreased by $0.29 million,  or 22.3%, from
$1.30 million for the three months ended March 31, 2001 to $1.01 million for the
three months ended March 31, 2002 due to lower  interest rates and repayments on
the Berg Group line of credit. As a result,  overall interest expense (including
amounts to related  parties) for the quarter  ended March 31, 2002  decreased by
$0.23 million  compared to the first quarter a year ago. The twelve R&D property
acquisitions  increased total debt  outstanding,  including  amounts due related
parties,  by $36.02 million, or 17.4%, from $207.29 million as of March 31, 2001
to $243.31 million as of March 31, 2002.  Management expects interest expense to
increase as new debt is incurred in connection  with property  acquisitions,  as
the Company draws on the Berg Group line of credit,  and as it seeks alternative
sources of credit.

MINORITY INTEREST AND NET INCOME
The minority  interest portion of income  increased by $4.99 million,  or 23.6%,
from $21.10  million for the three months ended March 31, 2001 to $26.09 million
for the three months ended March 31, 2002. Net income to shareholders  increased
by $0.98 million,  or 23.2%, from $4.22 million for the three months ended March
31,  2001 to $5.20  million  for the same  period  in  2002.  Minority  interest
represents  the  ownership  interest  of all limited  partners in the  operating
partnerships  taken as a whole, which was approximately 83% as of March 31, 2002
and 2001.

RECENT RENTAL MARKET DEVELOPMENTS

All of the  Company's  properties  are located in the Northern  California  area
known as Silicon  Valley,  which  generally  consists of portions of Santa Clara
County,  Southwestern Alameda County,  Southeastern San Mateo County and Eastern
Santa Cruz  County.  The Silicon  Valley  economy and business  activity  slowed
markedly in 2001 and in the first three months of 2002 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  14.8% in late 2001 to 17.3% at the end of the first quarter 2002.
Total  vacant  R&D  square  footage  in  Silicon  Valley at the end of the first
quarter of 2002  amounted to 26.1  million  square  feet,  of which 44%, or 11.5
million  square  feet,   accounted  for  sublease  spaces.  Total  negative  net
absorption in 2001 amounted to approximately  (15.6) million square feet. During
the first three  months of 2002,  there was total  negative  net  absorption  of
approximately (3.5) million square feet. The impact of this decline has not been
uniform throughout the area, however. The Silicon Valley R&D property market has
been characterized by a substantial number of submarkets,  with rent and vacancy
rates varying considerably by submarket and location within each submarket.  The
Company's average occupancy rate for the three-month period ended March 31, 2002
was 95% with  approximately  476,000  rentable square feet expiring in 2002. Key
tenants could seek the protection of the bankruptcy  laws, which could result in
the rejection and  termination of their leases,  thereby  causing a reduction in
our  rental  income.  For  example,  during  the last six  months,  six  tenants
accounting for approximately  458,000 net rentable square feet of R&D properties
have either filed  petitions  under  Chapter 11 of the  Bankruptcy  Code or have
discontinued  operations.  Under the bankruptcy laws, tenants may have the right
to reject  their  leases  with us and our claim for rent will be  limited to the
greater of one year's  rent or 15% of the total  amount of rent under the leases
upon default, but not to exceed three years of rent on the remaining term of the
lease  following the earlier of the petition filing date or the date on which we
gained repossession of the property,  as well as any rent that was unpaid on the
earlier of those dates.  These  properties  may take anywhere from six to twelve
months or longer to re-lease.  The Company anticipates its vacancy rate to range
between 12-15% by the end of 2002 and renewal rental rates to be the same as or,
perhaps,  lower than current rents. 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.

                                     - 12 -

<PAGE>


CHANGES IN FINANCIAL CONDITION

The most  significant  changes in the Company's  financial  condition during the
three  months  ended March 31, 2002  resulted  from  property  acquisitions  and
exchanges.  In addition,  debt increased from new acquisitions and stockholders'
equity  increased  from the  exercise of stock  options and the exchange of O.P.
Units for common stock.

At March 31, 2002, real estate assets increased by  approximately  $31.5 million
from December 31, 2001 because of new acquisitions  and one disposition.  During
the first three months of 2002,  the Company  acquired one  additional  property
representing  approximately 125,000 rentable square feet of R&D property located
in Silicon Valley. This property was acquired from the Berg Group under the Berg
land  holdings  option  agreement.  The  aggregate  acquisition  price  for this
property was approximately $13.7 million.  The Company financed this acquisition
by  borrowing  $7.5  million  under the Berg Group  line of credit  and  issuing
502,805 O.P.  Units.  In March 2002,  the Company  acquired three R&D properties
representing  approximately 206,500 rentable square feet for approximately $31.3
million  as  replacement  properties  in a  tax-deferred  exchange  in which the
Company  disposed of former R&D  properties at 5713-5729  Fontanoso Way and 2001
Logic Drive in San Jose,  California.  Pending the  purchase of the  replacement
properties,  the proceeds for the Fontanoso Way and Logic Drive  properties were
classified as restricted cash of which  approximately  $2.7 million  remained in
restricted  cash at March 31, 2002. No debt or O.P.  Units were issued for these
acquisitions.  The  Company  also  realized  a  gain  of  $6.1  million  on  the
transaction.

At March 31, 2002, total  liabilities  increased by  approximately  $8.3 million
from  December  31, 2001 due to mainly  debt  incurred  in  connection  with R&D
property acquisitions.

At March 31, 2002, total  stockholders'  equity increased by approximately  $2.4
million from  December 31, 2001 from  reduction of  accumulated  deficit,  stock
option  exercises and the exchange of O.P. Units for the Company's common stock.
During the three months ended March 31, 2002,  stock options to purchase  33,550
shares of common stock were exercised at $4.50 per share.  Total proceeds to the
Company were  approximately  $0.15 million.  One limited partner of an operating
partnership  exchanged  100,000 O.P.  Units for 100,000  shares of the Company's
common  stock  under the  exchange  rights  agreement  among the Company and the
limited partners in the operating  partnerships,  which  represented  additional
paid in capital of approximately $1.3 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 Funds From Operations ("FFO") and/or the Berg
Group line of credit and other credit  facilities that may be established by the
Company  with third party  financial  institutions.  The Company  expects  these
sources  of  liquidity  to  be  adequate  to  meet  projected  distributions  to
stockholders and other presently anticipated liquidity requirements in 2002. The
Company expects to meet its long-term liquidity  requirements for the funding of
property  development,  property  acquisitions and other material  non-recurring
capital  improvements  through long-term secured and unsecured  indebtedness and
the issuance of additional equity securities by the Company. The Company has the
ability to meet  short-term  obligations or other  liquidity  needs based on the
line of credit (related  parties).  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.

The Company is continually  evaluating  alternative sources of credit to replace
the Berg Group $100 million  line of credit,  which  expires in March 2003.  The
Company  believes  that the  terms of the Berg  Group  line of  credit  are more
favorable  than those  available  from  institutional  lenders.  There can be no
assurance  that the Berg Group will continue to rollover and extend this line of
credit, as it has been doing since 1999, or the Company will be able to obtain a
line of credit with terms  similar to the Berg Group line of credit.  Thus,  the
Company's cost of borrowing could increase substantially after 2002.

On March 1,  2002,  the  Company  obtained  a $20  million  unsecured  loan from
Citicorp USA, Inc. with an interest rate based on LIBOR. The loan, which matures
on March 1, 2003,  bears a fixed LIBOR  interest rate of 4.09% for the first six
months and LIBOR plus 2.0%  thereafter.  The Company  paid a loan fee of $50,000
and expects to use the loan for acquiring new R&D properties.

At March 31,  2002,  the  Company  had  total  indebtedness  of $243.3  million,
including  $126.9 million of fixed rate mortgage  debt,  $11.3 million under the
Berg Group mortgage note (related  parties),  $85.1 million under the Berg Group
line of credit (related parties), and $20.0 million under the Citicorp loan.

As of March 31, 2002,  the Company's Debt to Total Market  Capitalization  ratio
was  approximately   15.1%,   based  upon  a  Total  Market   Capitalization  of
approximately  $1.6  billion.  The Company  computed  this ratio by dividing the
Company's  total debt  outstanding by the sum of this debt plus the market value
of common stock  (based upon the closing  price of $13.10 per share on March 28,
2002) on a fully diluted  basis,  taking into account the conversion of all O.P.
Units into common stock.

On April 11, 2002, the Company paid dividends of $0.24 per share of common stock
to all common stockholders of record as of March 29, 2002. On the same date, the
operating partnerships paid a distribution of $0.24 per O.P. Unit.

                                     - 13 -
<PAGE>


MORTGAGE DEBT

The following  table sets forth  information  regarding  debt  outstanding as of
March 31, 2002:
<TABLE>
<CAPTION>

                                                                                                                Maturity   Interest
               Debt Description                     Collateral Properties                       Balance           Date       Rate
--------------------------------------------- ------------------------------------------- -------------------- ---------- ----------
                                                                                         (Dollars in thousands)
<S>                                           <C>                                               <C>             <C>        <C>
Line of Credit:
Berg Group (related parties)                   2033-2043 Samaritan Drive, San Jose, CA           $ 85,089         3/03        (1)
                                               2133 Samaritan Drive, San Jose, CA         --------------------
                                               2233-2243 Samaritan Drive, San Jose, CA
                                               1310-1450 McCandless Drive, Milpitas, CA
                                               1315-1375 McCandless Drive, Milpitas, CA
                                               1650-1690 McCandless Drive, Milpitas, CA
                                               1795-1845 McCandless Drive, Milpitas, CA
                                               5325 Hellyer Avenue, San Jose, CA
                                               5345 Hellyer Avenue, San Jose, CA
                                               2610 N. First Street, San Jose, CA
                                               75 E. Trimble Road, San Jose, CA
Unsecured Loan:
Citicorp USA, Inc.                             Not Available                                       20,000         3/03        (2)
                                                                                          --------------------


Mortgage Notes Payable (related parties):      5300 & 5350 Hellyer Avenue, San Jose, CA            11,300         6/10      7.650%
                                                                                          --------------------
Mortgage Notes Payable:
Prudential Capital Group                       20400 Mariani Avenue, Cupertino, CA                  1,555         4/09      8.750%
New York Life Insurance Company                10440 Bubb Road, Cupertino, CA                         338         9/09      9.625%
Home Savings & Loan Association                10460 Bubb Road, Cupertino, CA                         347        12/06      9.500%
Prudential Insurance Company of America (3)    10300 Bubb Road, Cupertino, CA                     124,678        10/08      6.560%
                                               10500 N. DeAnza Blvd, 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 Blvd, 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
                                                                                          --------------------
Mortgage Notes Payable Subtotal                                                                   126,918
                                                                                          --------------------

TOTAL                                                                                            $243,307
                                                                                          ====================
</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
     2003. The interest rate at March 31, 2002 was 3.632%.
(2)  The unsecured  loan from Citicorp USA, Inc.  carries a fixed LIBOR interest
     rate equal to 4.09% for the first six months and LIBOR plus 2.0% thereafter
     and is payable in full in March 2003.
(3)  John Kontrabecki, one of the limited partners, has guaranteed approximately
     $12.0 million of this debt.

                                     - 14 -

<PAGE>


CURRENT PROPERTIES SUBJECT TO OUR ACQUISITION AGREEMENT WITH THE BERG GROUP

The following  table presents  certain  projected  information at March 31, 2002
concerning  projects  for  which  the  Company,  through  its  interests  in the
operating  partnerships,  has the right to acquire  under the Berg land holdings
option agreement.
<TABLE>
<CAPTION>

                                                Approximate
                                Number of      Rentable Area           Anticipated             Total Estimated
Property                        Buildings      (Square Feet)         Acquisition Date       Acquisition Value (1)
------------------------------ ------------ -------------------- ------------------------- -------------------------
<S>                                <C>        <C>                    <C>                           <C>
BERG LAND HOLDINGS OPTION
UNDER DEVELOPMENT                                                                            (dollars in thousands)
Morgan Hill (JV I) (2)              2            160,000              4th Q 2002/Q1 2003            17,500
Morgan Hill (JV II) (2)             1            151,242              4th Q 2002/Q1 2003            16,200
Piercy & Hellyer                    1            165,000              3rd Q 2002                    20,900
                                    -            -------                                            ------
               Subtotal             4            476,242                                            54,600

AVAILABLE LAND
Piercy & Hellyer                                 490,000
Morgan Hill (2)                                  368,025
King Ranch                                       207,000
Fremont & Cushing                                387,000
Evergreen                                      2,480,000
                                               ---------
              Subtotal                         3,932,025


TOTAL                               4          4,408,267                                            $54,600
                                    =          =========                                            =======
</TABLE>


(1)  The estimated  acquisition  value  represents  the estimated cash price for
     acquiring  the projects  under the terms of the Berg land  holdings  option
     agreement,  which may differ from the actual acquisition cost as determined
     under GAAP, if O.P. Units or any other securities based on the market value
     of our common stock are issued in the transaction.
(2)  The Company  expects to own an approximate  50% interest in the partnership
     through one of its  operating  partnerships.  The property will be operated
     and  managed by the other  partner in the  entity.  The  rentable  area and
     estimated  acquisition value shown above reflect both the Company's and the
     other partner's combined interest in these properties.


Pursuant to the Berg land holdings option agreement  between the Company and the
Berg  Group,  the  Company  currently  has the option to acquire any future R&D,
office and industrial  property developed by the Berg Group on land it currently
owns or has under option, or acquires for these purposes in the future, directly
or indirectly by certain members of the Berg Group.

The time required to complete the leasing of developments varies from project to
project.  The acquisition dates and acquisition costs set forth in the table are
only estimates by management. Generally, the Company will not acquire any of the
above  projects  until  they are fully  completed  and  leased.  There can be no
assurance that the  acquisition  date and final cost to the Company as indicated
above  would be  realized.  No  estimate  can be  given  at this  time as to the
Company's  total cost to acquire  projects  under the Berg land holdings  option
agreement,  nor can we be certain of the period in which we will  acquire any of
the projects.

Although the Company expects to acquire the new properties available to it under
the terms of the Berg land holdings option agreement, subsequent to the approval
by the  independent  directors  committee,  there can be no  assurance  that the
Company  actually will  consummate any intended  transactions,  including all of
those discussed above. Furthermore, the Company has not yet determined the means
by which it would  acquire and pay for any such  properties or the impact of any
of the acquisitions on its business, results of operations, financial condition,
FFO or available cash for distribution.

Leasing  activity for new  build-to-suit  and vacated R&D  properties has slowed
considerably  during  the  past  year  and  the  first  three  months  of  2002.
Consequently,  the Company  believes  that the projected  acquisition  dates for
other development properties subject to the Berg land holdings option agreement,
with the  exception  of the  project at Piercy  and  Hellyer  for  approximately
165,000  rentable square feet, may be delayed for the foreseeable  future.  Such
delays  could  reduce  future  growth in  revenues,  operating  income and Funds
Available for Distribution ("FAD").

                                     - 15 -

<PAGE>


HISTORICAL CASH FLOWS

Net cash provided by operating  activities  for the three months ended March 31,
2002 was $28.6 million  compared to $22.3 million for the same period in 2001, a
28%  increase.  The  change  was a direct  result of  increased  rent from newly
acquired properties.

Net cash used in investing  activities was approximately  $18.8 million and $0.7
million for the three months ended March 31, 2002 and 2001, respectively. Of the
$18.8 million net cash used in investing activities, $18.5 million were returned
to Xilinx, Inc. relating to the purchase option agreement between Xilinx and the
Company, and $0.3 million were applied to Xilinx's monthly rent.

Net cash used in  financing  activities  was $7.6  million for the three  months
ended March 31, 2002  compared to $26.3  million for the same period in 2001,  a
71% decrease.  Of the $7.6 million net cash used in financing  activities,  $2.9
million were used to pay outstanding  debt, $20.6 million for minority  interest
distributions, $4.2 million for dividend payments, net of $20.1 million received
from the Citicorp  unsecured  loan and the proceeds of exercised  stock options.
During the three  months  ended March 31,  2002,  the Company  made  payments on
outstanding debt and distributions to holders of its common stock and O.P. Units
by utilizing cash generated from operating activities.

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, 2001, the recurring
tenant  improvement costs and leasing  commissions  incurred with respect to new
leases and lease  renewals of the  properties  that were owned or  controlled by
members of the Berg Group  prior to July 1, 1998  averaged  approximately  $1.75
million annually.  The Company expects that the average annual cost of recurring
tenant improvements and leasing commissions,  related to the properties, will be
approximately  $1.3 million  during 2002.  The Company  believes it will recover
substantially  all of these sums from the  tenants  under new or renewed  leases
through  increases in rental  rates.  The Company  expects to meet its long-term
liquidity  requirements  for  the  funding  of  property  development,  property
acquisitions  and other  material  non-recurring  capital  improvements  through
long-term  secured and  unsecured  indebtedness  and the issuance of  additional
equity securities by the Company.

FUNDS FROM OPERATIONS

As  defined  by the  National  Association  of  Real  Estate  Investment  Trusts
("NAREIT"),  FFO represents net income (loss) before  minority  interest of unit
holders  (computed in accordance  with GAAP),  excluding  gains (or losses) from
debt restructuring and sales of property,  plus real estate related depreciation
and  amortization  (excluding  amortization  of  deferred  financing  costs  and
depreciation of non-real estate assets) and after adjustments for unconsolidated
partnerships and joint ventures. Management considers FFO an appropriate measure
of performance  of an equity REIT because,  along with cash flows from operating
activities, financing activities and investing activities, it provides investors
with an  understanding  of the Company's  ability to incur and service debt, and
make  capital  expenditures.  With the  recent  emphasis  on the  disclosure  of
operating  earnings per share, we will still continue to use FFO as a measure of
the Company's  performance.  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.

The minority  interest in earnings for unrelated parties are deducted from total
minority interest in earnings in calculating FFO.

Furthermore, FFO is not comparable to similarly entitled items reported by other
REITs that do not define them  exactly as the Company  defines  FFO. FFO for the
three months ended March 31, 2002 and 2001 are summarized in the tables below:
<TABLE>
<CAPTION>

                                  Three Months Ended March 31,
                            -----------------------------------------
                                  2002                   2001
                            ------------------     ------------------
                                     (Dollars in thousands)
<S>                             <C>                    <C>
Net income                       $ 5,201                $ 4,219
Add:
    Minority interest (1)         25,933                 20,916
    Depreciation                   4,402                  4,102
Less:
    Gain on sale of assets         6,103                  3,101
                            ------------------     ------------------
FFO                              $29,433                $26,136
                            ==================     ==================
</TABLE>


(1)  The  minority  interest  for  unrelated  parties  was  deducted  from total
     minority interest in calculating FFO. Distribution Policy

                                     - 16 -
<PAGE>

DISTRIBUTION POLICY

The Company intends to pay  distributions  to stockholders and O.P. unit holders
based upon total Funds Available for Distribution  ("FAD"),  which is calculated
as FFO less adjustment for  straight-line  rent included in net income,  leasing
commissions paid and capital expenditures made during the respective period. The
calculations  of FAD for the three  months  ended March 31, 2002 and 2001 are as
follows:

<TABLE>
<CAPTION>


                                  Three Months Ended March 31,
                            ------------------------------------------
                                   2002                   2001
                            -------------------    -------------------
                                     (Dollars in thousands)
<S>                             <C>                    <C>
FFO                              $29,433                $26,136
Less:
    Straight-line rents             (780)                 2,089
    Leasing commissions              140                    163
    Capital expenditures               -                    154
                            -------------------    -------------------
FAD                              $30,073                $23,730
                            ===================    ===================
</TABLE>



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 effects of new  property  acquisitions,  including  acquisitions  under
     existing agreements with the Berg Group;

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

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

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


                                     - 17 -

<PAGE>


IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

The  Company  does  not  believe  recently  issued  accounting   standards  will
materially impact the Company's financial statements.


FORWARD-LOOKING INFORMATION

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

-    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, and

-    general accounting principles, policies and guidelines applicable to REITs.

In addition, the actual timing of development,  construction, and leasing on the
projects  that the Company  believes it may acquire in the future under the Berg
land holdings option agreement is unknown presently,  and reliance should not be
placed on the estimates  concerning  these projects set forth under the caption,
"Current  Properties Subject to Our Acquisition  Agreement with the Berg Group,"
above.  These risks and  uncertainties,  together with the other risks described
from time to time in the Company's  reports and other  documents  filed with the
Securities  and  Exchange   Commission,   should  be  considered  in  evaluating
forward-looking  statements  and  undue  reliance  should  not be placed on such
statements.

                                     - 18 -

<PAGE>


ITEM 3
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not generally hold market risk sensitive instruments for trading purposes.
We use fixed and variable rate debt to finance our  operations.  Our exposure to
market risk for changes in interest  rates relates  primarily to our current and
future debt  obligations.  We are  vulnerable  to  significant  fluctuations  of
interest  rates on our floating  rate debt,  and pricing on our future debt.  We
manage our market risk by  monitoring  interest  rates where we try to recognize
the  unpredictability  of the financial  markets and seek to reduce  potentially
adverse effect on the results of our operations.  This takes frequent evaluation
of available  lending rates and examination of  opportunities to reduce interest
expense  through  new  sources  of  debt  financing.   By  attempting  to  match
anticipated  cash  inflow  from our  operating  and  financing  activities  with
anticipated  cash outflow to fund debt payments,  distributions  to shareholders
and O.P. Unit holders,  capital  expenditures  and other cash  requirements,  we
expect to  minimize  the  effects  on our  future  earnings  and cash flow where
interest rate risk is most  sensitive.  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 primary market risk we face is the risk of interest rate  fluctuations.  The
Berg Group line of credit,  which is tied to a LIBOR based  interest  rate,  was
approximately  $85.1 million, or 35%, of the total $243.3 million of outstanding
debt as of March 31,  2002.  As a  result,  we pay lower  rates of  interest  in
periods of decreasing  interest rates and higher rates of interest in periods of
increasing  interest  rates.  At March 31, 2002, we had no interest rate caps or
interest rate swap contracts.

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

PART II - OTHER INFORMATION

ITEM 6
EXHIBITS AND REPORTS ON FORM 8-K

         a.       Exhibits

                  None

         b.       Reports on Form 8-K

                  None






================================================================================
SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereto duly authorized.


                                     MISSION WEST PROPERTIES, INC.
                                     (Registrant)


Date:   May 14, 2002                 By:    /s/ Wayne N. Pham
                                        ----------------------------------------
                                        Wayne N. Pham
                                        Vice President of Finance and Controller
                                        (Principal Accounting Officer and Duly
                                        Authorized Officer)



                                     - 19 -