SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C.  20549

                                FORM 10-Q


 x      Quarterly Report Pursuant to Section 13 or 15(d) of the
        Securities Exchange Act of 1934.
        For the quarterly period ended September 30, 2001.

        Transition Report pursuant to Section 13 or 15(d) of the
        Securities Exchange Act of 1934.
        For the transition period from _____________ to ____________.

Commission File Number 1-12222

                 BEDFORD PROPERTY INVESTORS, INC.
      (Exact name of Registrant as specified in its charter)


           MARYLAND                                    68-0306514
(state or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                    Identification No.)


270 Lafayette Circle, Lafayette, CA                       94549
(Address of principal executive offices)               (Zip Code)


                         (925) 283-8910
      (Registrant's telephone number, including area code)


Indicate by check mark whether 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 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 the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.

       Class                       Outstanding as of November 9, 2001
----------------------------------------------------------------------
Common Stock, $0.02 par value                   16,612,441


         BEDFORD PROPERTY INVESTORS, INC. AND SUBSIDIARIES

                                INDEX



PART I.  FINANCIAL INFORMATION                                   Page

ITEM 1.  FINANCIAL STATEMENTS

Statement                                                          1

Consolidated Balance Sheets as of September 30, 2001
and December 31, 2000 (Unaudited)                                  2

Consolidated Statements of Income for the three and
nine months ended September 30, 2001 and 2000 (Unaudited)          3

Consolidated Statements of Stockholders' Equity and
Comprehensive Income for the nine months ended
September 30, 2001 (Unaudited)                                     4

Consolidated Statements of Cash Flows for the nine
months ended September 30, 2001 and 2000 (Unaudited)               5

Notes to Consolidated Financial Statements                      6-15

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION                  16-21

ITEM 3.  QUALITATIVE AND QUANTITATIVE DISCLOSURES
ABOUT MARKET RISK                                              22-23

PART II.  OTHER INFORMATION

ITEMS 1 - 6                                                       24

SIGNATURES                                                        25








         BEDFORD PROPERTY INVESTORS, INC. AND SUBSIDIARIES


PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS



                               STATEMENT

The consolidated financial statements included herein have been
prepared by Bedford Property Investors, Inc. (the Company), without
audit, pursuant to the rules and regulations of the Securities and
Exchange Commission.  The information furnished reflects all
adjustments which are, in the opinion of management, necessary for a
fair presentation of its financial condition and results of operations
for the interim periods presented.  Such adjustments are of a normal
recurring nature.  These consolidated financial statements should be
read in conjunction with the notes to consolidated financial
statements appearing in the annual report to stockholders for the year
ended December 31, 2000.

When used in the discussion in this Form 10-Q, the words "believes,"
"expects," "intends," "anticipates" and similar expressions are
intended to identify forward-looking statements.  Such statements are
subject to certain risks and uncertainties which could cause actual
results to differ materially from those discussed, including, but not
limited to, those set forth in the section entitled "Potential Factors
Affecting Future Operating Results," below.  Readers are cautioned not
to place undue reliance on these forward-looking statements which
speak only as of the date hereof.  The Company undertakes no
obligation to publicly release the result of any revisions to these
forward-looking statements which may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.











          BEDFORD PROPERTY INVESTORS, INC. AND SUBSIDIARIES
                   CONSOLIDATED BALANCE SHEETS
           AS OF SEPTEMBER 30, 2001 AND DECEMBER 31, 2000
                          (Unaudited)
        (in thousands, except share and per share amounts)
<table>

                                    <c>               <c>
                                                      September 30, 2001       December 31, 2000
Assets:

Real estate investments:
  Industrial buildings                                      $306,346                  $305,857
  Office buildings                                           326,794                   310,882
  Operating properties held for sale                          16,325                     5,226
  Properties under development                                 2,827                    13,702
  Land held for development                                   11,698                    11,721
------------------------------------------------------------------------------------------------
                                                             663,990                   647,388

  Less accumulated depreciation                               46,503                    35,944
------------------------------------------------------------------------------------------------
                                                             617,487                   611,444
Cash and cash equivalents                                        966                     3,160
Other assets                                                  23,399                    19,562
------------------------------------------------------------------------------------------------
                                                            $641,852                  $634,166
================================================================================================

Liabilities and Stockholders' Equity:

Bank loan payable                                          $  96,323                 $  77,320
Mortgage loans payable                                       239,247                   224,205
Accounts payable and accrued expenses                         10,823                    15,665
Dividend and distributions payable                             8,020                     8,005
Other liabilities                                              8,930                     8,227
-----------------------------------------------------------------------------------------------
    Total liabilities                                        363,343                   333,422
-----------------------------------------------------------------------------------------------
Minority interest in consolidated partnership                  1,229                     1,229
-----------------------------------------------------------------------------------------------
Stockholders' equity:
 Common stock, par value $0.02 per share;
   authorized 50,000,000 shares; issued and
   outstanding 16,630,437 shares in 2001 and
   17,709,738 shares in 2000                                     332                       354
 Additional paid-in capital                                  294,428                   316,084
 Accumulated dividends in
    excess of net income                                     (17,106)                  (16,923)
Accumulated other comprehensive loss                            (374)                     -
------------------------------------------------------------------------------------------------

      Total stockholders' equity                             277,280                   299,515
------------------------------------------------------------------------------------------------

                                                            $641,852                  $634,166
================================================================================================
</table>
See accompanying notes to consolidated financial statements.



             BEDFORD PROPERTY INVESTORS, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF INCOME
   FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000

                                (Unaudited)
            (in thousands, except share and per share amounts)
<table>


                                    <c>              <c>         <c>             <c>
                                                Three Months                 Nine Months
                                            2001             2000         2001          2000
-----------------------------------------------------------------------------------------------
Property Operations:
     Rental income                       $ 25,211         $ 24,662     $ 74,634       $74,011
     Rental expenses:
        Operating expenses                  4,105            4,149       12,118        12,491
        Real estate taxes                   2,336            2,034        6,927         6,868
        Depreciation and amortization       3,918            3,537       11,682        10,060
-----------------------------------------------------------------------------------------------

Income from property operations            14,852           14,942       43,907        44,592

General and administrative expenses        (1,091)            (830)      (3,114)       (2,656)
Interest income                                57              203          160           310
Interest expense                           (5,686)          (6,626)     (17,373)      (18,975)
-----------------------------------------------------------------------------------------------

Income before gain on sales
     and minority interest                  8,132            7,689       23,580        23,271

Gain on sales of real estate
     investments, net                        -              20,200         -           35,427
Minority interest                             (38)             (35)        (108)         (101)
-----------------------------------------------------------------------------------------------

Net income                               $  8,094         $ 27,854     $ 23,472       $58,597
===============================================================================================

Earnings per share - basic               $   0.49         $   1.54     $   1.38       $  3.16
===============================================================================================

Weighted average number of
     shares - basic                    16,571,487       18,074,925   16,948,064    18,537,680
===============================================================================================

Earnings per share - diluted             $   0.48         $   1.52     $   1.36      $   3.12
===============================================================================================

Weighted average number of
     shares - diluted                  17,006,453       18,396,361   17,314,610    18,784,051
===============================================================================================
</table>
See accompanying notes to consolidated financial statements.









                BEDFORD PROPERTY INVESTORS, INC. AND SUBSIDIARIES
     CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001
                                   (Unaudited)
                   (in thousands, except per share amounts)

<table>

                               <c>       <c>        <c>            <c>            <c>
                                                       Accumulated    Accumulated      Total
                                            Additional  dividends        other         stock-
                                   Common     paid-in  in excess of   comprehensive   holders'
                                   stock      capital   net income        loss         equity
-----------------------------------------------------------------------------------------------
Balance, December 31, 2000         $ 354     $316,084    ($16,923)     $   -          $299,515

Issuance of common stock               3          990        -             -               993

Repurchase and retirement of
     common stock                    (25)     (23,928)       -             -           (23,953)

Amortization of deferred
     compensation                      -        1,282        -             -             1,282

Dividends to common stockholders
     ($1.38 per share)                 -         -        (23,655)         -           (23,655)
------------------------------------------------------------------------------------------------


Subtotal                             332      294,428     (40,578)         -           254,182
------------------------------------------------------------------------------------------------

Net income                             -         -         23,472          -            23,472

Other comprehensive loss               -         -           -          (374)             (374)
------------------------------------------------------------------------------------------------

Comprehensive income (loss)            -         -         23,472       (374)           23,098
------------------------------------------------------------------------------------------------

Balance, September 30, 2001        $ 332     $294,428    $(17,106)     $(374)         $277,280
================================================================================================
</table>
See accompanying notes to consolidated financial statements.

















<page>

                    BEDFORD PROPERTY INVESTORS, INC. AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
                                        (Unaudited)
                                      (in thousands)
<table>

                                                        <c>          <c>
                                                                 2001        2000
-----------------------------------------------------------------------------------------
Operating Activities:
  Net income                                                $   23,472   $   58,597
  Adjustments to reconcile net income to net cash
     provided by operating activities:
    Minority interest                                              108          101
    Depreciation and amortization                               13,535       11,484
    Stock compensation amortization                              1,282        1,217
    Allowance for doubtful accounts                                207         -
    Gain on sales of real estate investments, net                 -         (35,427)
    Change in other assets                                      (2,741)      (4,873)
    Change in accounts payable and
      accrued expenses                                          (4,067)         765
    Change in other liabilities                                    329         (960)
-------------------------------------------------------------------------------------

Net cash provided by operating activities                   $   32,125   $   30,904
-------------------------------------------------------------------------------------

Investing Activities:
  Deposit for future acquisitions                           $     -      $  (16,277)
  Investments in real estate                                   (18,918)     (23,011)
  Proceeds from sales of real estate investments, net             -         113,121
-------------------------------------------------------------------------------------

Net cash (used) provided by investing activities            $  (18,918)  $   73,833
-------------------------------------------------------------------------------------

Financing Activities:
  Proceeds from bank loan payable, net of loan costs        $   41,861   $   59,800
  Repayments of bank loan payable                              (25,345)    (116,856)
  Proceeds from mortgage loans payable, net of loan costs       17,749       30,221
  Repayments of mortgage loans payable                          (2,958)     (12,666)
  Issuance of common stock                                         993        1,633
  Payment of dividends and distributions                       (23,748)     (23,987)
  Repurchase and retirement of common stock                    (23,953)     (41,462)
-------------------------------------------------------------------------------------

Net cash (used) by financing activities                     $  (15,401)   $(103,317)
-------------------------------------------------------------------------------------

Net (decrease) increase in cash and cash equivalents        $   (2,194)   $  1,420
Cash and cash equivalents at beginning of period                 3,160       1,584
------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                  $      966    $  3,004
=====================================================================================

Supplemental disclosure of cash flow information:

Cash paid during the year for interest, net of
     amounts capitalized of $998 in 2001 and $1,691
     in 2000                                                $   15,829    $ 17,777
=====================================================================================
</table>

See accompanying notes to consolidated financial statements.

<page>

        BEDFORD PROPERTY INVESTORS, INC. AND SUBSIDIARIES
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
                        SEPTEMBER 30, 2001


Note 1.  The Company and Basis of Presentation

The Company

Bedford Property Investors, Inc. and subsidiaries (the Company) is a
Maryland real estate investment trust with investments primarily in
industrial and suburban office properties concentrated in the western
United States.  The Company's common stock trades under the symbol
"BED" on both the New York Stock Exchange and the Pacific Exchange.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been
prepared in accordance with the requirements of  Form 10-Q and,
therefore, do not include all information and footnotes necessary for
a presentation of financial condition, results of operations and cash
flows in conformity with accounting principles generally accepted in
the United States of America.  The unaudited interim consolidated
financial statements reflect all adjustments which are, in the opinion
of management, necessary for a fair presentation of results for the
interim periods presented in compliance with the instructions to Form
10-Q.  All such adjustments are of a normal, recurring nature.

Per Share Data

Per share data are based on the weighted average number of common
shares outstanding during the year.  Stock options issued under the
Company's stock option plans, non-vested restricted stock, and the
limited partnership units of Bedford Realty Partners, L.P. are
included in the calculation of diluted per share data if, upon
exercise or vestiture, they would have a dilutive effect.

Derivative Instruments and Hedging Activities

Effective January 1, 2001, the Company adopted Statement of Financial
Accounting Standards No. 133 (SFAS 133), "Accounting for Derivative
Instruments and Hedging Activities," as amended by FASB Statement No.
137, "Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No. 133," and
Statement No. 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities."  SFAS 133, as amended, establishes
accounting and reporting standards for derivative financial
instruments.  Specifically, SFAS 133 requires an entity to recognize
all derivatives as either assets or liabilities in the statement of
financial position and to measure those instruments at fair value.
Additionally, the fair value adjustments will affect either
stockholders' equity or net income depending on whether the derivative
instrument qualifies as a hedge for accounting purposes and, if so,
the nature of the hedging activity.  The adoption of SFAS 133 did not
have a material impact on the Company's financial statements.  See
Note 4.

The Company requires that hedging derivative instruments are effective
in reducing the interest rate risk exposure that they are designated
to hedge.  This effectiveness is essential for qualifying for hedge
accounting.  Instruments that meet the hedging criteria are formally
designated as hedges at the inception of the derivative contract.
When the terms of an underlying transaction are modified, or when the
underlying hedged item ceases to exist, all changes in the fair value
of the instrument are marked-to-market with changes in value included
in net income each period until the instrument matures.  Any
derivative instrument used for risk management that does not meet the
hedging criteria is marked-to-market with changes in value included in
net income for each period.


Reclassifications

Certain prior year accounts have been reclassified to conform to the
current year presentation.

Note 2. Real Estate Investments

As of September 30, 2001, the Company's real estate investments were
diversified by property type as follows (dollars in thousands):
<table>

                                       <c>               <c>          <c>
                                           Number of                      Percent of
                                           Properties           Cost      Total Cost
                                          --------------------------------------------

Industrial buildings                               59         $306,346         46%
Office buildings                                   29          326,794         49
Operating properties held for sale                  5           16,325          2
Properties under development                        1            2,827          1
Land held for development                          10           11,698          2
                                          --------------------------------------------

Total                                             104         $663,990        100%
                                          ============================================
</table>
















The following table sets forth the Company's real estate investments as of
September 30, 2001 (in thousands):
<table>

                            <c>        <c>        <c>              <c>              <c>
                                                                           Less
                                                      Development      Accumulated
                                   Land    Building   In-Progress      Depreciation       Total
                                ----------------------------------------------------------------
--
Industrial buildings
Northern California             $ 43,985   $109,988   $    -              $14,053       $139,920
Arizona                           20,218     56,857        -                5,697         71,378
Southern California               18,308     42,954        -                5,169         56,093
Greater Seattle Area               3,409     10,627        -                1,091         12,945
                                ----------------------------------------------------------------
--

Total industrial buildings        85,920    220,426        -               26,010        280,336
                                ----------------------------------------------------------------
--

Office buildings
Northern California                5,165     17,358        -                1,548         20,975
Arizona                           11,954     27,988        -                2,237         37,705
Southern California                9,361     22,005        -                2,231         29,135
Colorado                          13,935     88,474        -                4,466         97,943
Greater Seattle Area              16,811    100,799        -                7,747        109,863
Nevada                             2,102     10,842        -                1,131         11,813
                                ----------------------------------------------------------------
--
Total office buildings            59,328    267,466        -               19,360        307,434
                                ----------------------------------------------------------------
--

Operating properties held for sale
Northern California                1,831      9,262        -                  733         10,360
Colorado                           1,911      3,321        -                  400          4,832
                                ----------------------------------------------------------------
--

Total operating properties held
     for sale                      3,742     12,583        -                1,133         15,192
                                ----------------------------------------------------------------
--

Properties under development
Southern California                  890       -          1,937              -             2,827
                                ----------------------------------------------------------------

Total properties under
     development                     890       -          1,937              -             2,827
                                ----------------------------------------------------------------

Land held for development
Northern California                3,822       -             56              -             3,878
Arizona                              645       -           -                 -               645
Southern California                2,997       -            155              -             3,152
Colorado                           3,684       -            339              -             4,023
                                ----------------------------------------------------------------

Total land held for development   11,148       -            550              -            11,698
                                ----------------------------------------------------------------

Total as of September 30, 2001  $161,028   $500,475      $2,487           $46,503       $617,487
                                ================================================================

Total as of December 31, 2000   $160,997   $476,999      $9,392           $35,944       $611,444
                                ================================================================

</table>

<page>
Company personnel directly manage all but three of the Company's
properties from regional offices in Lafayette, California;  Tustin,
California; Phoenix, Arizona; Denver, Colorado; and Seattle,
Washington.  The Company has retained outside managers to assist in
some of the management functions for the following three properties:
U.S. Bank Centre in Reno, Nevada and Bryant Street Quad and Bryant
Street Annex in Denver, Colorado.  All financial record-keeping is
centralized at the Company's corporate office in Lafayette,
California.

Income from property operations for operating properties held for sale
as of September 30, 2001 was $1,499,000 and $1,262,000 for the nine
months ended September 30, 2001 and 2000, respectively.

Note 3.  Debt

Bank Loan Payable

In May 2001, the Company renewed its revolving credit facility with a
bank group led by Bank of America.  The facility, which matures on
June 1, 2004, consists of a $150 million secured line with an
accordion feature to expand the facility to $175 million, if needed.
Interest on the facility is at a floating rate equal to either the
lender's published reference rate or LIBOR plus a margin ranging from
1.35% to 1.55% depending on the Company's leverage level.  As of
September 30, 2001, the facility had an outstanding balance of
$96,323,000 and is secured by 32 properties and interest in such
properties, which collectively accounted for approximately 33% of the
Company's annualized base rent and approximately 34% of the Company's
total real estate assets as of September 30, 2001.

The credit facility contains various restrictive covenants including,
among other things, a covenant limiting quarterly dividends to 95% of
average Funds From Operations.  The Company was in compliance with the
covenants and requirements of its revolving credit facility during the
quarter ended September 30, 2001.

The daily weighted average amount owed to the bank was $93,934,000 and
$132,538,000 for the nine months ended September 30, 2001 and 2000,
respectively.  The weighted average annual interest rates in each of
these periods was  6.36% and 7.68%, respectively.  The effective
interest rate at September 30, 2001 was 5.68%.

Mortgage Loans Payable

In August 2001, the Company closed on $18 million of mortgage
financing from Washington Mutual Bank.  The loan has a 10-year term
and bears interest at a floating rate of a trailing 1-year treasury
rate plus 2.60%.  Proceeds from the loan were used to pay down a
portion of the outstanding balance of the $150 million line of credit.

Mortgage loans payable at September 30, 2001 consist of the following (in
thousands):
<table>

                                                                  <c>
  7.50% note due January 1, 2002                                      $ 14,113
  7.02% note due March 15, 2003                                         18,644
  Floating rate note due January 1, 2005, current rate of 6.21%(1)       4,503
  7.17% note due June 1, 2005                                           26,390
  Floating rate note due August 1, 2005, current rate of 5.55%(2)        7,348
  Floating rate note due August 1, 2005, current rate of 5.55%(2)       23,017
  8.90% note due July 31, 2006                                           8,193
  6.91% note due July 31, 2006                                          19,627
  7.95% note due December 1, 2006                                       21,623
  7.17% note due June 1, 2007                                           35,895
  7.17% note due June 1, 2009                                           41,925
  Floating rate note due August 1, 2011, current rate of 7.918%(3)      17,969
                                                                      --------
Total                                                                 $239,247
                                                                      ========
</table>

(1)  Current rate based on 3 month LIBOR plus 2.50% (adjusted
quarterly).
(2)  Current rate based on fixed rate on interest swap agreements.
See Note 4.
(3)  Current rate based on a 12-month average of U.S. Treasury
Security Yields plus 2.60% (adjusted semi-annually).












































<page>

The mortgage loans are collaterized by 50 properties and interest in such
properties, which collectively accounted for approximately  63% of the
Company's annualized base rents and approximately 56% of the Company's total
real estate assets as of September 30, 2001.  The Company was in compliance
with the covenants and requirements of its various mortgage financings during
the quarter ended September 30, 2001.

The following table presents scheduled principal payments on mortgage loans
as of September 30, 2001 (in thousands):
<table>

                                                           <c>
      Twelve month period ending September 30, 2002            $   18,499
      Twelve month period ending September 30, 2003                22,547
      Twelve month period ending September 30, 2004                 4,599
      Twelve month period ending September 30, 2005                60,735
      Twelve month period ending September 30, 2006                27,898
           Thereafter                                             104,969
                                                                 --------
                                                               $  239,247
                                                                 ========
</table>

Note 4.  Derivative Instruments and Hedging Activities

In the normal course of business, the Company is exposed to the effect
of interest rate changes.  The Company limits these risks by following
established risk management policies and procedures including the use
of derivatives.  For interest rate exposures, interest rate swaps are
used primarily to hedge the cash flow risk of variable rate borrowing
obligations.

The Company does not use derivatives for trading or speculative
purposes.  Further, the Company has a policy of only entering into
contracts with major financial institutions.  When viewed in
conjunction with the underlying and offsetting exposure that the
derivatives are designed to hedge, the Company has not sustained a
material loss from those instruments, nor does it anticipate any
material adverse effect on its net income or financial position in the
future from the use of derivatives.

Interest rate swaps that convert variable payments to fixed payments
are cash flow hedges.  Hedging relationships that are fully effective
have no effect on net income or FFO.  The unrealized gains and losses
in the fair value of these interest rate swaps are reported on the
balance sheet, as a component of other assets or other liabilities as
appropriate, with a corresponding adjustment to accumulated other
comprehensive income (loss).

On June 18, 2001, the Company entered into interest swap agreements
with United California Bank.  The swap agreements allow the Company to
hedge its exposure to variable interest rates on two mortgages with
remaining principal balances totaling $30,365,000 by effectively
paying a fixed rate of interest over the term of the swap agreement.
Interest rate pay differentials that arise under these swap agreements
are recognized in interest expense over the term of the contracts.
These interest rate swap agreements were considered to be fully
effective in hedging the variable rate risk associated with the two
mortgages.

The following summarizes the notional value and fair value of the
Company's interest swap contracts.  The notional value at September
30, 2001 provides an indication of the extent of the Company's
involvement in these contracts but does not represent exposure to
credit, interest rate or market risks.
<page>
<table>

                   <c>           <c>                <c>                <c>
                                                                                Approximate
    Notional           Fixed          Contract            Cumulative            Liability at
     Amount            Rate           Maturity          Cash Paid, Net    September 30, 2001 (1)
   ---------------------------------------------------------------------------------------------
  $23,017,078          5.55%         July 1, 2002           $25,334               $283,345
    7,347,967          5.55%         July 1, 2002             8,088                 90,455
   ---------------------------------------------------------------------------------------------
  $30,365,045                                               $33,422               $373,800

================================================================================================
</table>

To determine the fair values of derivative instruments in accordance
with SFAS 133, the Company uses the discounted cash flow method, which
requires the use of assumptions about market conditions and risks
existing at the balance sheet date.  Considerable judgment is required
in interpreting market data to develop estimates of market value.
Accordingly, estimated fair value is a general approximation of value,
and such value may or may not actually be realized.

At September 30, 2001, $373,800 is included in other liabilities and
accumulated other comprehensive loss, a stockholders' equity account,
reflecting the estimated market value of the swap contract obligations
at that date.



















(1) Represents the approximate amount which the Company would have
paid as of September 30, 2001 if the swap contracts were terminated.





<page>
Note 5.  Segment Disclosure

The Company has five reportable segments organized by the region in
which they operate: Northern California (Northern California and
Nevada), Southwest (Arizona and greater Austin, Texas), Southern
California, Northwest (greater Portland, Oregon and greater Seattle,
Washington) and Colorado.  During the year ended December 31, 2000,
the Midwest portfolio (greater Kansas City, Kansas/Missouri, and
greater Dallas, Texas) was sold; therefore, the Midwest segment is not
reported for the nine months ended September 30, 2001.

The accounting policies of the segments are the same as those
described in the summary of significant accounting policies.  The
Company evaluates performance based upon income from real estate from
the combined properties in each segment.
<table>

                             <c>            <c>           <c>             <c>            <c>          <c>       <c>
                                                For the nine months ended September 30, 2001 (in thousands, except percentages)
                                   ---------------------------------------------------------------------------------------------

                                   Northern                   Southern                                    Corporate
                                  California    Southwest     California     Northwest       Colorado      & Other  Consolidated
                                ------------------------------------------------------------------------------------------------
Rental income                     $ 26,396      $ 12,598       $ 10,619      $ 13,903        $ 11,118      $   -       $ 74,634
Operating expenses and real
   estate taxes                      5,531         3,540          2,004         4,018           3,952          -         19,045
Depreciation and
   amortization                      3,598         2,248          1,446         2,726           1,664          -         11,682
                                ------------------------------------------------------------------------------------------------

Income from property
    operations                      17,267         6,810          7,169         7,159           5,502          -         43,907

Percent of income from
    property operations                39%           16%            16%           16%             13%            0%        100%

General and administrative
    expenses                          -             -              -             -               -           (3,114)     (3,114)
Interest income (1)                    20           -              -                9            -              131         160
Interest expense                      -             -              -             -               -          (17,373)    (17,373)
                                ------------------------------------------------------------------------------------------------

Income (loss) before
    minority interest              17,287          6,810          7,169         7,168           5,502       (20,356)     23,580

Minority interest                    -              -              -             -               -             (108)       (108)
                                ------------------------------------------------------------------------------------------------

Net income (loss)               $  17,287     $    6,810     $    7,169    $  7,168        $    5,502      $(20,464)  $  23,472
                                ================================================================================================

Real estate investments         $ 204,411     $  117,662     $   98,608    $131,645        $  111,664      $   -      $ 663,990
                                ================================================================================================

Additions of real
    estate investments          $   3,670     $      657     $    2,407    $    796        $    9,072      $   -      $  16,602
                                ================================================================================================

Total assets                    $ 219,187     $  110,534     $  108,628    $116,175        $   80,747      $  6,581   $641,852
                                ================================================================================================
</table>

(1)  The interest income in the Northern California and
Northwest segments represents interest earned from
tenant notes receivable.










<table>


                   <c>         <c>           <c>            <c>           <c>        <c>         <c>          <c>
                                         For the nine months ended September 30, 2000 (in thousands, except percentages)
                      ---------------------------------------------------------------------------------------------------------

                       Northern                  Southern                                            Corporate
                       California  Southwest     California     Northwest     Midwest    Colorado    & Other      Consolidated

Rental income          $ 24,944     $ 14,264      $ 10,247       $ 14,330    $   3,615    $ 6,611    $    -        $  74,011
Operating expenses
   and real
   estate taxes           5,332        4,082         1,985          4,363        1,198      2,399         -           19,359
Depreciation and
    amortization          3,587        1,844         1,413          2,445          (86)       857         -           10,060
                      ---------------------------------------------------------------------------------------------------------

Income from
    property
    operations           16,025        8,338         6,849          7,522        2,503      3,355         -           44,592

Percent of income
    from property
    operations              36%          19%           15%            16%           6%         8%          0%           100%

General and
    administrative
    expenses               -            -             -              -             -         -         (2,656)        (2,656)
Interest income(1)           20            1          -                 1            1       -            287            310
Interest expense           -            -             -              -             -         -        (18,975)       (18,975)
                      ---------------------------------------------------------------------------------------------------------

Income before gain
    (loss) on sales
    and minority
    interest             16,045        8,339         6,849          7,523         2,504     3,355     (21,344)        23,271

Gain (loss) on sales
    of real
    estate
    investments, net     26,019         (493)           (6)         5,558         4,349      -           -            35,427
Minority interest          -            -             -              -             -         -           (101)          (101)
                      ---------------------------------------------------------------------------------------------------------

Net income             $ 42,064     $  7,846      $  6,843       $ 13,081    $    6,853   $ 3,355    $(21,445)     $  58,597
                      =========================================================================================================

Real estate
    investments        $196,385     $126,371      $ 92,664       $129,400    $    5,205   $74,625    $   -         $ 624,650

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

Additions
    (dispositions)
    of real estate
    investments        $ (8,872)    $ (7,141)     $ (1,794)      $(20,981)   $  (25,088)  $ 8,793    $   -         $ (55,083)
                      =========================================================================================================

Total assets           $209,415     $118,146      $103,668       $117,145    $   11,453   $65,668    $  3,833      $ 629,328
                      =========================================================================================================
</table>


(1)  The interest income in the Northern California, Southwest,
 Northwest, and Midwest segments represents interest
earned from tenant notes receivable.


<page>
Note 6.  Earnings per Share

Following is a reconciliation of earnings per share:
(in thousands, except share and per share amounts)
<table>

                                                <c>                    <c>                  <c>                <c>

                                                                 Three Months Ended                     Nine Months Ended
                                                                    September 30,                          September 30,

                                                          2001                   2000                 2001              2000
Basic:

Net income                                         $        8,094          $     27,854         $      23,472     $       58,597
                                                   =============================================================================
Weighted average number of shares - basic              16,571,487            18,074,925            16,948,064         18,537,680
                                                   =============================================================================
Earnings per share - basic                         $         0.49          $       1.54         $        1.38     $         3.16
                                                   =============================================================================
Diluted:

Net income                                         $        8,094          $     27,854         $      23,472     $       58,597
Add: minority interest                                         38                    35                   108                101
                                                   -----------------------------------------------------------------------------
Net income for diluted earnings per share          $        8,132          $     27,889         $      23,580     $       58,698
                                                   =============================================================================
Weighted average number of shares - basic              16,571,487            18,074,925            16,948,064         18,537,680
Weighted average shares of dilutive stock
     options using average period stock price
     under the treasury stock method                       96,796                79,174                61,375             49,488
Weighted average shares issuable upon the
     conversion of operating partnership units             77,992                77,992                77,992             77,992
Weighted average shares of non-vested
     restricted stock using average period
     stock price under the treasury stock method          260,178               164,270               227,179            118,891
                                                   -----------------------------------------------------------------------------
Weighted average number of shares - diluted            17,006,453            18,396,361            17,314,610         18,784,051
                                                   =============================================================================
Earnings per share - diluted                       $         0.48          $       1.52         $        1.36     $         3.12
                                                   =============================================================================
</table>



Note 7.  Related Party Transactions

The Company's activities relating to the development and acquisition
of new properties and debt and equity financings have been performed
by Bedford Acquisitions, Inc. (BAI) pursuant to a written contract
dated
January 1, 1995, as amended.  The contract provides that BAI is
obligated to provide services to the Company with respect to the
Company's acquisition and financing activities, and that BAI is
responsible for the payment of its expenses incurred in connection
therewith.  The contract provides that BAI is to be paid a fee in an
amount equal to the lesser of (i) 1 1/2% of the gross amount of the
aggregate purchase price of the property for acquisitions and
dispositions, up to 1 1/2% of any loans arranged by BAI, plus 7% of
development project costs, or (ii) an amount equal to (a) the
aggregate amount of approved expenses funded by BAI through the time
of such acquisition, disposition, loan or development minus (b) the
aggregate amount of fees previously paid to BAI pursuant to such
arrangement.  In no event will the aggregate amount of fees paid to
BAI exceed the aggregate amount of costs funded by BAI.  The agreement
with BAI has a term of one year and expires on December 31, 2001.  The
agreement is to be automatically extended for an additional term of
one year unless either party gives notice of its intent to terminate
the agreement by October 31, 2001.

For the nine months ended September 30, 2001 and 2000, the Company
paid BAI $2,339,000 and $2,104,000, respectively, for activities
performed pursuant to the foregoing arrangements.  The Company
believes that the fees charged under the foregoing arrangements have
been and continue to be comparable to those charged by other sponsors
of real estate investment entities or other third party service
providers.  Such fees have been and continue to be charged only for
completed transactions and development services provided.  Such fees
are properly accounted for as costs of acquired assets or originated
debt to which they relate, or as selling costs with respect to
dispositions.

Note 8.  Commitments and Contingencies

As of September 30, 2001, the Company has contractual construction
commitments relating to its properties under development of
approximately $20 million of which $17 million has been paid.

From time to time, the Company is subject to legal claims in the
ordinary course of business.  The Company currently is not aware of
any such legal proceedings or claims that it believes will have,
individually or in the aggregate, a material adverse effect on its
business, prospects, financial condition or operating results.

Note 9.  Subsequent Events

Under the terms of the amended contract with Bedford Acquisitions,
Inc., the agreement described in Note 7 has been automatically
extended for an additional term of one year.

In October 2001, the Company sold three industrial properties at a net
sales price totaling $15,050,000, which resulted in an aggregate net
gain of approximately $4,872,000.  The properties were located in
Denver, Colorado and Tempe, Arizona.  Proceeds from the sales were
used to pay down a portion of the outstanding balance on the Company's
$150 million line of credit.

In November 2001, the Company sold an office property in Tucson,
Arizona for a net sale price of $5,100,000, which resulted in a gain
of approximately $1,055,000.  Proceeds from the sale were used to pay
down a portion of the outstanding balance on the Company's $150
million line of credit.



<page>
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION

Results of Operations

The Company's operations consist of developing, owning and operating
industrial and suburban office properties located primarily in the
western United States.

Variances in revenues, expenses, net income and cash flows for the
nine months ended September 30, 2001 when compared with the same
period in 2000 were due primarily to the acquisition, development, and
sale of operating properties during the following periods:

<table>

                     <c>                      <c>          <c>                     <c>
                          Activities from January 1, 2000      Activities from October 1, 2000
                                to September 30, 2000               to September 30, 2001
                               Number of          Square             Number of         Square
                         Operating Properties      Feet        Operating Properties    Feet
                        ----------------------------------------------------------------------
          Acquisitions
             Office                -                -                   1             165,191
                        ----------------------------------------------------------------------
                                   -                -                   1             165,191
                        ======================================================================

          Development
             Industrial            5             283,243                3             134,653
             Office                5             271,437                4             184,689
                        ----------------------------------------------------------------------
                                  10             554,680                7             319,342
                        ======================================================================

          Sales
             Industrial           14             848,521                1              68,580
             Office                3             211,356                2             102,848
                        ----------------------------------------------------------------------
                                  17           1,059,877                3             171,428
                        ======================================================================
</table>


Three Months Ended September 30, 2001 Compared with Three Months Ended
September 30, 2000

Income from Property Operations
Income from property operations (defined as rental income less rental
expenses) decreased $90,000 or less than 1% in 2001 compared with
2000.  This is due to increases in operating expenses and real estate
taxes of $258,000 and depreciation and amortization of $381,000,
offset by an increase in rental income of $549,000.

The increases in rental income and rental expenses (which include
operating expenses, real estate taxes, and depreciation and
amortization) are primarily attributable to development activities
during 2000 and 2001, as well as the acquisition and sales of
properties during the year 2000.  Development and acquisitions
activities increased rental income and rental expenses in 2001 by
$1,778,000 and $1,188,000, respectively, as compared to 2000.  These
increases were offset by the sale of fifteen industrial properties and
five office properties in 2000 which resulted in a reduction in rental
income and rental expenses in 2001 of $2,494,000 and $992,000,
respectively, as compared to 2000.  The remaining increase in rental
income of $1,265,000 is due to an increase in rental rates and expense
recovery income.  The remaining increase in rental expenses of
$443,000 is primarily due to an increase in real estate taxes and
electricity costs.

Expenses
Interest expense, which includes amortization of loan fees, decreased
$940,000 or 14% in 2001 compared with 2000.  The decrease is
attributable to lower interest rates on the Company's variable rate
debt and a lower weighted average outstanding debt balance in 2001 as
compared to the same period in 2000.

The amortization of loan fees was $471,000 and $432,000 in 2001 and
2000, respectively.  General and administrative expense increased
$261,000 or 31% in 2001 compared with 2000, primarily as a result of
increased compensation and legal costs.

Gain (loss) on sales of real estate investments, net
During the third quarter 2000, the Company sold three office
properties, ten industrial properties, and a .99 acre parcel of land
for net sale prices totaling $74,617,000, which resulted in an
aggregate net gain of approximately $20,200,000.  The properties were
located in Mountain View, California; Bellevue, Washington; Overland
Park and Lenexa, Kansas; Kansas City, Missouri; and Austin, Texas.
The sale of the property in Mountain View, California was completed as
part of a tax-deferred exchange under Section 1031 of the Internal
Revenue Code in which the Company acquired a property located in
Englewood, Colorado.

Dividends
Common stock dividends to stockholders and distributions to Operating
Partnership (OP) Unitholders declared for the third quarter of 2001
and 2000 were $0.48 and $0.45 per share or OP Unit, respectively.
Consistent with the Company's policy, dividends and distributions were
paid in the quarter after the quarter in which they were declared.

Nine Months Ended September 30, 2001 Compared with Nine Months Ended
September 30, 2000

Income from Property Operations
Income from property operations (defined as rental income less rental
expenses) decreased $685,000 or 2% in 2001 compared with 2000.  This
is due to a decrease in operating expenses and real estate taxes of
$314,000, and an increase in depreciation and amortization of
$1,622,000, offset by an increase in rental income of $623,000.

The increases in rental income and rental expenses (which include
operating expenses, real estate taxes, and depreciation and
amortization) are primarily attributable to development activities in
2000 and 2001, as well as the acquisition and sales of properties
during the year 2000.  Development and acquisitions activities
increased rental income and rental expenses in 2001 by $5,832,000 and
$3,777,000, respectively, as compared to 2000.  These increases were
offset by the sale of fifteen industrial properties and five office
properties in 2000 which resulted in a reduction in rental income and
rental expenses in 2001 of $9,014,000 and $3,012,000, respectively, as
compared to 2000.  The remaining increase in rental income of
$3,805,000 is due to an increase in rental rates and expense recovery
income.  The balance of the increase in rental expenses of $543,000 is
mainly due to increased utility costs.

Expenses
Interest expense, which includes amortization of loan fees, decreased
$1,602,000 or 8% in 2001 compared with 2000.  The decrease is
attributable to lower interest rates on the Company's variable rate
debt and a lower weighted average outstanding debt balance in 2001 as
compared to the same period in 2000.

The amortization of loan fees was $1,603,000 and $1,210,000 in the
first nine months of 2001 and 2000, respectively.  General and
administrative expense increased $458,000 or 17% in 2001 compared with
2000, primarily as a result of increased compensation costs.

Gain (loss) on sales of real estate investments, net
In the first quarter 2000, the Company sold an industrial property in
San Jose, California and two industrial properties in Beaverton,
Oregon for net sale prices totaling $36,339,000, which resulted in an
aggregate gain of approximately $15,234,000.

In the second quarter 2000, the Company sold an industrial property in
San Diego, California for a net sale price of $2,165,000, which
resulted in a loss of approximately $6,000.

During the third quarter 2000, the Company sold three office
properties, ten industrial properties, and a .99 acre parcel of land
for net sale prices totaling $74,617,000, which resulted in an
aggregate net gain of approximately $20,200,000.  The properties were
located in Mountain View, California; Bellevue, Washington; Overland
Park and Lenexa, Kansas; Kansas City, Missouri; and Austin, Texas.
The sale of the property in Mountain View, California was completed as
part of a tax-deferred exchange under Section 1031 of the Internal
Revenue Code in which the Company acquired a property located in
Englewood, Colorado.

Dividends
Common stock dividends to stockholders and distributions to Operating
Partnership (OP) Unitholders declared per share or OP unit were $0.45
for the first and second quarters of 2001, and $0.48 for the third
quarter of 2001.  Common stock dividends to stockholders and
distributions to OP Unitholders declared per share or OP unit were
$0.42 for the first and second quarters of 2000, and $0.45 for the
third quarter of 2000.  Consistent with the Company's policy,
dividends and distributions were paid in the quarter after the quarter
in which they were declared.

Liquidity and Capital Resources
In May 2001, the Company renewed its revolving credit facility with a
bank group led by Bank of America.  The facility, which matures on
June 1, 2004, consists of a $150 million secured line with an
accordion feature to expand the facility to $175 million, if needed.
Interest on the facility is at a floating rate equal to either the
lender's published "reference rate" or LIBOR plus a margin ranging
from 1.35% to 1.55% depending on the Company's leverage level.  As of
September 30, 2001, the facility had an outstanding balance of
$96,323,000 and an effective interest rate of 5.68%.

The Company was in compliance with the covenants and requirements of
its various debt financings during the quarter ended September 30,
2001.  The Company anticipates that the cash flow generated by its
real estate investments and funds available under the above credit
facility will be sufficient to meet its short-term liquidity
requirements.

As of September 30, 2001, the Company has contractual construction
commitments relating to its properties under development of
approximately $20 million of which $17 million has been paid.

During the nine months ended September 30, 2001, the Company's
operating activities provided cash flow of $32,125,000.  Investing
activities utilized cash of $18,918,000 for real estate investments
and development.  Financing activities utilized net cash flow of
$15,401,000 consisting of the net proceeds from bank borrowings and
mortgage loans of $59,610,000 and net proceeds from the issuance of
common stock of $993,000, offset by repayment of bank borrowings and
mortgage loans of $28,303,000, payment of dividends and distributions
of $23,748,000, and the repurchase of 1,231,818 shares of common stock
for $23,953,000.

The Company expects to fund the cost of acquisitions, capital
expenditures, costs associated with lease renewals and reletting of
space, repayment of indebtedness, share repurchases, and development
of properties from (i) cash flow from operations, (ii) borrowings
under the credit facility and, if available, other indebtedness (which
may include indebtedness assumed in acquisitions), and (iii) the sale
of certain real estate investments.

The ability to obtain mortgage loans on income producing property is
dependent upon the ability to attract and retain tenants and the
economics of the various markets in which the properties are located,
as well as the willingness of mortgage-lending institutions to make
loans secured by real property.  The ability to sell real estate
investments is partially dependent upon the ability of purchasers to
obtain financing at reasonable commercial rates.

Potential Factors Affecting Future Operating Results

Many factors affect the Company's actual financial performance and may
cause the Company's future results to be markedly outside of the
Company's current expectations.  These factors include the following:






Interest Rate Fluctuations

At the present time, borrowings under the Company's credit facility,
the $4.6 million mortgage loan from Union Bank, the $30.89 million
mortgage loans from Security Life of Denver Insurance Company, and the
$18 million mortgage loan from Washington Mutual bear interest at
floating rates.  The floating interest rate on the $30.89 million
mortgage loans has been fixed for a period of 1 year with interest
swap agreements which expire on July 1,
2002.  The Company recognizes that its results from operations may be
negatively impacted by future increases in interest rates and
substantial additional borrowings to finance property acquisitions,
development projects and share repurchases.

Lease Renewals

While the Company historically has been successful in renewing and
reletting space, the Company is subject to the risk that certain
leases expiring in 2001 and beyond may not be renewed, or the terms of
renewal may be less favorable to the Company than current lease terms.
The Company expects to incur costs in making improvements or repairs
to its portfolio of properties required by new or renewing tenants and
expects to incur expenses associated with brokerage commissions
payable in connection with the reletting of space.

Inflation

Most of the leases require the tenants to pay their share of operating
expenses, including common area maintenance, real estate taxes and
insurance, thereby reducing the Company's exposure to increases in
costs and operating expenses resulting from inflation.  Inflation,
including escalations in electricity costs in California and
neighboring states, however, could result in an increase in the
Company's borrowings and other operating expenses.

Government Regulations

The Company's properties are subject to various federal, state and
local regulatory requirements such as local building codes and other
similar regulations.  The Company believes its properties are
currently in substantial compliance with all applicable regulatory
requirements, although expenditures at its properties may be required
to comply with changes in these laws.  No material expenditures are
contemplated at this time in order to comply with any such laws or
regulations.

Under various federal, state and local laws, ordinances and
regulations, an owner or operator of real estate is liable for  the
costs of removal or remediation of certain hazardous or toxic
substances released on, above, under, or in such property.  Such laws
often impose such liability without regard to whether the owner knew
of, or was responsible for, the presence of such hazardous or toxic
substances.  The costs of such removal or remediation could be
substantial.

Additionally, the presence of such substances or the failure to
properly remediate such substances may adversely affect the owner's
ability to borrow using such real estate as collateral.

The Company believes that it is in compliance in all material respects
with all federal, state and local laws regarding hazardous or toxic
substances, and the Company has not been notified by any governmental
authority of any non-compliance or other claim in connection with any
of its present or former properties.  Accordingly, the Company does
not currently anticipate that compliance with federal, state and local
environmental protection regulations will have any material adverse
impact on the financial position, results of operations or liquidity
of the Company.  There can be no assurance, however, that future
discoveries or events at the Company's properties, or changes to
current environmental regulations, will not result in such a material
adverse impact.



Recent Accounting Pronouncements

In July 2001, The Financial Accounting Standards Board ("FASB") issued
SFAS No. 141, "Business Combinations," which requires that the
purchase method of accounting be used for all business combinations
initiated after June 30, 2001.  The Company will adopt SFAS No. 141
effective January 1, 2002.  The Company has determined that the
adoption of SFAS No. 141 will not have a material impact on the
Company's financial statements.

In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other
Intangible Assets," which addresses financial accounting and reporting
for acquired goodwill and other intangible assets and supersedes APB
Opinion No. 17, "Intangible Assets."  The Company will adopt SFAS No.
142 effective January 1, 2002.  The Company has determined that the
adoption of SFAS No. 142 will not have a material impact on the
Company's financial statements.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment of Disposal of Long-Lived Assets."  SFAS No. 144 supercedes
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of."  SFAS No. 144 applies to all
long-lived assets (including discontinued operations) and consequently
amends APB Opinion No. 30, "Reporting the Results of Operations,
Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and
Transactions."  SFAS No. 144 develops one accounting model for long-
lived assets that are to be disposed of by sale.  It requires that
long-lived assets that are to be disposed of by sale be measured at
the lower of book value or fair value less cost to sell.  The Company
will adopt SFAS No. 144 effective January 1, 2002.  The Company has
determined that the adoption of SFAS No. 144 will not have a material
impact on the Company's financial statements.

Financial Performance

Management considers Funds From Operations (FFO) to be one measure of
the performance of an equity REIT.  FFO during the three and nine
months ended September 30, 2001 was $12,050,000 and $35,262,000,
respectively.  During the same periods in 2000, FFO was $11,226,000
and $33,331,000, respectively.  FFO is used by financial analysts in
evaluating REITs and can be one measure of a REIT's ability to make
cash distributions.  Presentation of this information provides the
reader with an additional measure to compare the performance of REITs.
FFO is generally defined by the National Association of Real Estate
Investment Trusts as net income (loss) (computed in accordance with
accounting principles generally accepted in the United States of
America), excluding extraordinary items such as gains (losses) from
debt restructurings and sales of property, plus depreciation and
amortization, and after adjustments for unconsolidated partnerships
and joint ventures.  FFO was computed by the Company in accordance
with this definition.  FFO does not represent cash generated by
operating activities in accordance with generally accepted accounting
principles; it is not necessarily indicative of cash available to fund
cash needs and should not be considered as an alternative to net
income (loss) as an indicator of the Company's operating performance
or as an alternative to cash flow as a measure of liquidity.
Further, FFO as disclosed by other REITs may not be comparable to the
Company's presentation.

<page>
<table>


                                         <c>          <c>             <c>        <c>
                                              Three Months Ended          Nine Months Ended
                                                 September 30,               September 30,
                                              2001          2000           2001         2000
                                         ------------------------------------------------------
Funds From Operations
    (in thousands, except share amounts):


          Net income                         $ 8,094      $27,854         $23,472     $58,597
          Add:
            Depreciation and amortization      3,918        3,537          11,682      10,060
            Minority interest                     38           35             108         101
            (Gain) loss on sales of real
              estate investments, net           -         (20,200)           -        (35,427)
                                         ------------------------------------------------------

          Funds From Operations              $12,050      $11,226         $35,262     $33,331
                                         ======================================================
          Weighted average number of
             shares - diluted             17,006,453   18,396,361      17,314,610  18,784,051
                                         ======================================================
</table>


ITEM 3.  QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to interest rate changes primarily as a result
of its line of credit and long-term debt used to maintain liquidity
and fund capital expenditures and expansion of the Company's real
estate investment portfolio and operations.  The Company's interest
rate risk management objective is to limit the impact of interest rate
changes on earnings and cash flows and to lower its overall borrowing
costs.  To achieve its objectives, the Company balances its borrowings
between fixed and variable rate debt.  While the Company has entered
into interest swap agreements to minimize its exposure to interest
rate fluctuations, the Company does not enter into derivative or
interest rate transactions for speculative purposes.

The Company's interest rate risk is monitored using a variety of
techniques.  The table below presents the principal amounts, weighted
average annual interest rates, fair values and other terms required by
year of expected maturity to evaluate the expected cash flows and
sensitivity to interest rate changes (dollars in thousands):

<table>

                   <c>       <c>        <c>     <c>     <c>    <c>        <c>       <c>
                                       Twelve Month Period Ending September 30,
                                                                                         Fair
                         2002      2003     2004    2005    2006   Thereafter  Total     Value
                        -----------------------------------------------------------------------
Variable rate LIBOR
   debt                $   591   $  1,225  $97,625 $32,936 $   530  $15,691   $148,598 $148,598
Average interest rate    7.09%      6.08%    5.69%   5.18%   7.92%    7.92%      5.83%    5.83%

Fixed rate debt        $17,908   $ 21,322  $ 3,297 $27,799 $27,368  $89,278   $186,972 $190,558
Average interest rate    7.40%      7.07%    7.35%   7.19%   7.47%    7.34%      7.31%    7.00%
</table>

As the table incorporates only those exposures that existed as of
September 30, 2001, it does not consider those exposures or positions
which could arise after that date.  Moreover, because firm commitments
are not presented in the table above, the information presented
therein has limited predictive value.  As a result, the Company's
ultimate realized gain or loss with respect to interest rate
fluctuations will depend on the exposures that arise during the
period, the Company's hedging strategies at that time, and interest
rates.

On June 18, 2001, the Company entered into interest swap agreements
with United California Bank.  The swap agreements allow the Company to
hedge its exposure to variable interest rates on two mortgages with
remaining principal balances totaling $30,365,000 by effectively
paying a fixed rate of interest over the term of the swap agreement.
Interest rate pay differentials that arise under these swap agreements
are recognized in interest expense over the term of the contracts.
These interest rate swap agreements were considered to be fully
effective in hedging the variable rate risk associated with the two
mortgages.

The following summarizes the notional value and fair value of the
Company's interest swap contracts.  The notional value at September
30, 2001 provides an indication of the extent of the Company's
involvement in these contracts but does not represent exposure to
credit, interest rate or market risks.





<table>

 <c>               <c>           <c>            <c>                <c>
     Notional          Fixed          Contract       Cumulative       Approximate Liability
     Amount(1)         Rate           Maturity      Cash Paid, Net    at September 30, 2001 (2)
   ---------------------------------------------------------------------------------------------
     $23,017,078       5.55%        July 1, 2002        $25,334               $283,345
       7,347,967       5.55%        July 1, 2002          8,088                 90,455
   ---------------------------------------------------------------------------------------------
     $30,365,045                                        $33,422               $373,800
   =============================================================================================
 </table>





(1)  The notional amount is included in the table of qualitative and
quantitative disclosure about market risk as variable rate LIBOR debt
and fixed rate debt, as applicable.

(2)  Represents the approximate amount which the Company would have
paid as of September 30, 2001 if the swap contracts were terminated.


To determine the fair values of derivative instruments in accordance
with SFAS 133, the Company uses the discounted cash flow method, which
requires the use of assumptions about market conditions and risks
existing at the balance sheet date.  Considerable judgment is required
in interpreting market data to develop estimates of market value.
Accordingly, estimated fair value is a general approximation of value,
and such value may or may not actually be realized.

At September 30, 2001, $373,800 is included in other liabilities and
accumulated other comprehensive loss, a stockholders' equity account,
reflecting the estimated market value of the swap contracts at that
date.




PART II.  OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS

    None

Item 2.  CHANGES IN SECURITIES

    None

Item 3.  DEFAULTS UPON SENIOR SECURITIES

    None

Item 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

    None

Item 5.  OTHER INFORMATION

    None

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

A.  Exhibits
      Exhibit No. Exhibit

          3.1(a)  Articles of Incorporation of Bedford Property
                  Investors, Inc. is incorporated herein by reference
                  to Exhibit 4.2 of the Company's Registration
                  Statement on Form S-2 (File No. 333-00921) filed on
                  February 14, 1996.

          3.1(b)  Charter of the Company, as amended, is incorporated
                 herein by reference to Exhibit 4.2 of the Company's
                 Amendment No. 1 to its Registration Statement on Form
                 S-2 (File No. 333-00921) filed on March 29, 1996.

          3.1(c)  Articles of Amendment of Charter of Bedford Property
                  Investors, Inc. is incorporated herein by reference
                  to Exhibit 3.1 to the Company's Form 10-Q for the
                  quarter ended June 30, 1997.

          3.2     Amended and Restated Bylaws of the Company is
                  incorporated herein by reference to Exhibit 3.2 to
                  the Company's Form 10-K for the year ended December
                  31, 2000.


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 of the undersigned, hereunto duly authorized.

Dated:  November 13, 2001

           BEDFORD PROPERTY INVESTORS, INC.
           (Registrant)


    By:     /s/ HANH KIHARA
            Hanh Kihara
            Senior Vice President and
            Chief Financial Officer


    By:     /s/ KRISTA K. ROWLAND
            Krista K. Rowland
            Vice President and Controller