EXHIBIT 10.30





                         PROMISSORY NOTE

Bedford (CA)
19806.311

$23,415,000                                         July 27, 2000


     FOR VALUE RECEIVED, the undersigned, BEDFORD PROPERTY INVESTORS,
INC., a Maryland corporation ("Maker"), hereby promises to pay to the
order of SECURITY LIFE OF DENVER INSURANCE COMPANY, a Colorado
corporation, or any subsequent holder hereof ("Payee"), at the office
of Payee, c/o ING Investment Management LLC, 5780 Powers Ferry Road,
NW, Suite 300, Atlanta, Georgia 30327-4349, or at such other place as
Payee may from time to time designate in writing, the principal sum of
TWENTY-THREE MILLION FOUR HUNDRED FIFTEEN THOUSAND AND NO/100 DOLLARS
($23,415,000) and interest thereon from and after the date of
disbursement hereunder at the interest rate determined in accordance
with this Note ("Note Rate"), both principal and interest to be paid
in lawful money of the United States of America, as follows:

          (i)  Interest only from and including the date of
     disbursement of the loan proceeds through and including the
     last day of the month, shall be paid on the first day of
     the month following the date hereof ("Amortization Date")
     or, at the option of Payee, on the date hereof; and

          (ii) Payments of principal and interest (the "Monthly
     Payments") shall be made in three hundred (300) successive
     monthly installments commencing on the first day of
     September, 2000, and continuing on the first day of each
     and every calendar month thereafter up to and including the
     first day of August, 2025 (the "Maturity Date").  Each of
     the Monthly Payments shall be based upon an amortization
     period of 25 years from and after the Amortization Date
     (the "Amortization Period") at the then applicable Note
     Rate, except that the final installment payable on the
     Maturity Date shall be in the full amount of outstanding
     principal of this Promissory Note ("Note"), interest and
     all other sums remaining unpaid hereunder.  The initial
     Monthly Payments due hereunder, commencing on the
     Amortization Date shall be in the amount of $181,031.10.

I.   Interest Rate Alternatives.

     The Note Rate shall be determined in accordance with the
following two options and shall be either the variable rate described
below (the "Variable Rate") or, if affirmatively elected in accordance
with the following terms, a fixed rate (the "Fixed Rate").  The
premium assessed for a prepayment and the options of Payee to call
this Note shall vary depending on whether the Variable Rate or the
Fixed Rate is applicable, as set forth herein.

     A.   Variable Rate.

          1.   Interest Rate.  The Note Rate shall be determined as
follows, unless the Fixed Rate Option (defined below) is exercised.
The initial Note Rate shall be 8.02%.  Commencing September 1, 2000,
and on the first day of every calendar month thereafter during the
term of this Note, upon a change in the LIBOR, as hereinafter defined
(hereinafter an "Interest Adjustment Date"), the Note Rate to be paid
by Maker hereunder shall be adjusted to a rate of interest (the
"Adjusted Rate") equal to one hundred forty (140) basis points plus
the applicable LIBOR on such Interest Adjustment Date, and the
principal balance of the Indebtedness evidenced hereby outstanding on
the Interest Adjustment Date shall be reamortized by Payee over the
remaining term of the Amortization Period at the Adjusted Rate to
determine the Monthly Payment of principal and interest necessary to
pay the remaining principal Indebtedness in full on the Maturity Date
in substantially equal installments (the "Adjusted Monthly Payment").
Commencing on the first day of each calendar month following each
Interest Adjustment Date and continuing on the first day of each month
through and including the next Interest Adjustment Date, Maker's
Monthly Payments due hereunder shall be in the amount of the then
applicable Adjusted Monthly Payment.  The "LIBOR," as referred to
herein, shall mean the 30-day London Interbank Offered Rate, as
reported in The Wall Street Journal, or if not available or no longer
published, as provided by the Federal Reserve Bank of New York.  In
the event the LIBOR ceases to be published or is otherwise
unascertainable, Payee shall select a comparable reference rate as the
next index for purposes of calculating the Adjusted Rate hereunder.
Notwithstanding anything else contained herein, the determination of
the adjustment in the Note Rate hereunder shall occur five (5) London
banking days prior to each Interest Adjustment Date.

          2.   Call Provisions.  Notwithstanding any provisions of
this Note to the contrary, the Payee reserves the right to declare the
entire amount of outstanding principal of this Note, interest and all
other sums remaining unpaid hereunder and under the Deed of Trust (as
hereinafter defined) to be due and payable on any of the following
dates (each referred to as a "Call Date"):

               (a)  the first day of September, 2005; or

               (b)  the first day of September, 2010; or

               (c)  the first day of September, 2015; or

               (d)  the first day of September, 2020.

The period of time from the date hereof until the first Call Date, and
thereafter the period of time between each Call Date or between the
last Call Date and the Maturity Date, is referred to herein as a "Call
Period".  Such right shall be exercised by Payee, in its sole and
absolute discretion, by giving written notice to Maker at least six
(6) months prior to the Call Date as to which Payee is electing, which
notice shall refer to this Note and state the Call Date elected by
Payee.  The exercise of such right by Payee shall not relieve Maker of
its obligation to make scheduled payments hereunder, or to pay any
other sums due and owing hereunder, between the date of such notice
and the elected Call Date.  The exercise of such right by Payee will
result in the original principal amount of this Note not having been
fully amortized by the payment of the monthly installments hereunder
prior to the exercised Call Date, and  Maker shall be obligated to
make a payment of the entire amount of outstanding principal of this
Note and interest and all other sums remaining unpaid hereunder and
under the Deed of Trust on the Call Date.

          3.   Prepayment.  Except as expressly stated in this Note,
there shall be no right to prepay the principal portion of the
Indebtedness.  Maker reserves, however, the privilege to prepay, in
full but not in part, the principal portion of the Indebtedness on any
installment payment date, upon sixty (60) days prior written notice to
the Payee and payment of a premium (the "Prepayment Premium") equal to
a percentage of the outstanding principal balance of this Note as of
the date of prepayment determined as follows:  two percent (2%) as of
the first day of any Call Period (to include the partial month from
the date hereof to the Amortization Date for the first Call Period)
and reducing thereafter by one fifty-eighth (1/58th) as of the first
day of each calendar month, such that the Prepayment Premium shall be
zero during the last two months of a Call Period, and then re-setting
to two (2%) percent as of the first day of the next Call Period.

     In the event of acceleration of the Note at any time and
subsequent involuntary or voluntary prepayment (even if during the
period in which no prepayment is permitted), the Prepayment Premium
shall be payable except (a) for a prepayment which results from
application of proceeds from insured damage, condemnation or other
taking of the Premises when no Event of Default (as hereinafter
defined) exists, and (b) as to any prepayment which is made within
sixty (60) days prior to the Maturity Date or a Call Date.  In the
event the Prepayment Premium were ever construed by a court having
jurisdiction thereof to be an interest payment, the Prepayment Premium
shall not exceed an amount equal to the excess, if any, of (i)
interest calculated at the highest rate permitted by applicable law,
as construed by courts having jurisdiction thereof, on the principal
balance of the Note from time to time outstanding from the date
thereof to the date of such payment, less (ii) interest theretofore
paid on the Note.  If Maker shall have paid any amount construed to be
in excess of the highest amount payable by law calculated as
aforesaid, as determined by a court of competent jurisdiction, such
excess shall promptly be refunded to Maker.

     B.  Fixed Rate.

          1.   Interest Rate.  Maker shall have the right,
exercisable during the period commencing on the date hereof and ending
August 31, 2003, to fix the Note Rate in accordance with the following
(the "Fixed Rate Option"):  Provided that no Event of Default, (as
hereinafter defined) exists, the Maker may, upon written notice (the
"Election Notice") to Payee stating Maker's election to change to a
fixed rate and electing a term of years not fewer than three nor more
than ten years (the "Fixed Term"), and payment of a conversion fee
equal to one-quarter of one percent (0.25%) of the outstanding
principal balance as of the Fixed Rate Adjustment Date (as defined
below), elect to fix the Note Rate at the highest of (i) one hundred
ninety (190) basis points plus the rate applicable to U.S. Treasury
obligations for a term corresponding to the Fixed Term, as of the
Determination Date (defined below), (ii) the Merrill Lynch index, U.S.
Corporates, BBB-A rated, 5-10 years with an inception date of December
31, 1972, as reported by Bloomberg whose ticker on Bloomberg is C6C0,
as of the Determination Date, and (iii) 6.75%.  The Note Rate shall be
adjusted to a fixed rate determined in accordance with the foregoing
("Fixed Rate") to be effective as of the first day of the second full
calendar month following Payee's receipt of Maker's Election Notice
("Fixed Rate Adjustment Date").  The Fixed Rate shall be established
by Payee within three (3) business days of Payee's receipt of Maker's
Election Notice ("Determination Date"), and Payee shall notify Maker
of the Fixed Rate so determined (the "Rate Notice").  Unless Maker
gives a written notice of objection to Payee within three (3) business
days after Payee has given Maker such Rate Notice, setting forth the
basis of the objection and the calculation as determined by Maker, the
Fixed Rate set forth in the Rate Notice shall be deemed to have been
concurred in by Maker.  If Maker objects to the Fixed Rate so
determined, the Variable Rate (and the Call Dates and Prepayment
Premium provisions applicable to the Variable Rate) shall continue
until Maker and Payee have agreed upon the Fixed Rate and the Fixed
Rate Adjustment Date shall be the first day of the second full
calendar month following the date of such agreement as to the Fixed
Rate.  The outstanding principal balance shall be reamortized as of
the Fixed Rate Adjustment Date over the then-remaining Amortization
Period and the Monthly Payments shall be adjusted, effective as of the
first day of the first calendar month immediately following the Fixed
Rate Adjustment Date, so that the outstanding principal balance as of
the Fixed Rate Adjustment Date shall bear interest at the Fixed Rate
and be repaid in full by equal monthly installments of principal and
interest by the Maturity Date ("Fixed Rate Installments").  The 0.25%
conversion fee shall be due and payable no later than the Fixed Rate
Adjustment Date.  Maker shall also pay all third party costs and
expenses incurred by Payee to document the conversion to the Fixed
Rate, including legal fees.  Failure to pay such conversion fee and
costs and expenses shall constitute an Event of Default hereunder, and
in no event shall the Fixed Rate be applicable unless the same have
been fully paid.  If Payee does not exercise a Fixed Call Option, the
Fixed Rate shall remain in effect through the Maturity Date.

          2.   Call Provisions.  In the event Maker exercises the
Fixed Rate Option and satisfies the conditions set forth above, the
Maturity Date shall remain unchanged.  However, the Call Dates
provided above with respect to the Variable Rate shall be inoperative
and Payee shall have the following option:

     Payee shall have the option (the "Fixed Call Option")
exercisable in its sole and absolute discretion to declare the entire
amount of the then outstanding principal and all unpaid interest
thereon to be immediately due and payable on any one of the following
dates (the "Fixed Call Dates"): On the date which is the number of
years after the due date of the first installment of principal and
interest under the Fixed Rate (which would be the first day of the
first calendar month following the Fixed Rate Adjustment Date) equal
to the Fixed Term, and on every fifth (5th) anniversary of such date
thereafter.  Such Fixed Call Option shall be exercised by Payee by
giving written notice to Maker at least six (6) months prior to the
applicable Fixed Call Date.  The exercise of such right by Payee shall
not relieve Maker of its obligation to make scheduled payments
hereunder, or to pay any other sums due and owing hereunder, between
the date of such notice and the elected Fixed Call Date.  The exercise
of such right by Payee will result in the original principal amount of
this Note not having been fully amortized by the payment of the
monthly installments hereunder prior to the exercised Fixed Call Date,
and Maker shall be obligated to make a payment of the entire amount of
outstanding principal of this Note and interest and all other sums
remaining unpaid hereunder and under the Deed of Trust on the Fixed
Call Date.

          3.   Prepayment Premium.  In the event Maker exercises the
Fixed Rate Option, the Prepayment Premium set forth in the Variable
Rate provisions shall be inoperative and the following shall apply:

     Except as expressly stated in this Note, there shall be no right
to prepay the principal portion of the Indebtedness.  Maker reserves,
however, the privilege to prepay, in full but not in part, the
principal portion of the Indebtedness on any installment payment date,
upon sixty (60) days prior written notice to the Payee and payment of
a premium (the "Prepayment Premium") equal to the greater of:

               (a)  an amount (the "Treasury Obligation
          Amount") equal to the sum of (i) the present value of
          the scheduled monthly installments on this Note from
          the date of prepayment to the Maturity Date or, if
          earlier, the next applicable Fixed Call Date, and
          (ii) the present value of the amount of principal and
          interest due on the Maturity Date or, if earlier, the
          next applicable Fixed Call Date (assuming all
          scheduled monthly installments due prior thereto were
          made when due) minus (iii) the outstanding principal
          balance of this Note as of the date of prepayment.
          The present values described in clauses (i) and (ii)
          shall be computed on a monthly basis as of the date of
          prepayment, discounted at the yield of the U.S.
          Treasury obligation closest in maturity to the
          Maturity Date or, if earlier, the next applicable
          Fixed Call Date, as reported in The Wall Street
          Journal (or if not then published, any successor or
          similar publication of similar repute in the financial
          markets) or as available from the Federal Reserve Bank
          of New York, on the fifth (5th) day prior to the date
          of prepayment or, if such fifth day is not a business
          day, then the next preceding day which is a business
          day.  The Treasury Obligation Amount is intended to be
          that amount which, together with the amount prepaid,
          shall be sufficient to enable Payee to invest in a
          U.S. Treasury obligation for the remaining term of
          this Note to provide the same effective yield on the
          amount paid from the date of prepayment to the
          Maturity Date or, if earlier, the next applicable
          Fixed Call Date as would have been the yield on such
          amount under this Note if such amount had not been
          prepaid; or

               (b)  one percent (1.0%) of the outstanding
          principal balance of this Note as of the prepayment
          date.

     Except as provided in the next sentence, in no event shall the
amount prepaid be less than the total amount of the then outstanding
principal and accrued and unpaid interest thereon plus one percent
(1%) of the then outstanding principal.  In the event of acceleration
of the Note at any time and subsequent involuntary or voluntary
prepayment (even if during the period in which no prepayment is
permitted), the Prepayment Premium shall be payable except (aa) for a
prepayment which results from application of proceeds from insured
damage, condemnation or other taking of the Premises when no Event of
Default exists, and (bb) as to any prepayment which is made within
sixty (60) days prior to the Maturity Date or a Fixed Call Date.  In
the event the Prepayment Premium were ever construed by a court having
jurisdiction thereof to be an interest payment, the Prepayment Premium
shall not exceed an amount equal to the excess, if any, of (i)
interest calculated at the highest rate permitted by applicable law,
as construed by courts having jurisdiction thereof, on the principal
balance of the Note from time to time outstanding from the date
thereof to the date of such payment, less (ii) interest theretofore
paid on the Note.  If Maker shall have paid any amounts construed to
be in excess of the highest amount payable by law, calculated as
aforesaid, as determined by a court of competent jurisdiction, such
excess shall promptly be refunded to Maker.

II.  General Terms and Provisions.

     All payments on account of the Indebtedness shall be applied:
(i) first, to further advances, if any, made by the Payee as provided
in the Loan Documents (as hereinafter defined); (ii) next, to any Late
Charge (as hereinafter defined); (iii) next, to interest at the
Default Rate (as hereinafter defined), if applicable; (iv) next, to
the Prepayment Premium (as hereinafter defined), if applicable; (v)
next, to interest at the applicable Note Rate on the unpaid principal
balance of this Note unless interest at the Default Rate is
applicable; and (vi) last, to reduce the unpaid principal balance of
this Note.  Interest shall be calculated on the basis of a year
consisting of 360 days and with twelve thirty-day months, except that
interest due and payable for less than a full month shall be
calculated by multiplying the actual number of days elapsed in such
period by a daily interest rate based on a 360-day year.

     In the event any installment of principal or interest due
hereunder, or any escrow fund payment for real estate taxes,
assessments, other similar charges or insurance premiums due under the
Deed of Trust shall be more than fifteen (15) days overdue, Maker
shall pay to the holder hereof a late charge ("Late Charge") of four
cents ($.04) for each dollar so overdue or, if less, the maximum
amount permitted under applicable law, in order to defray part of the
cost of collection and of handling delinquent payments.


     The terms of this Note are expressly limited so that in no event
whatsoever shall the amount paid or agreed to be paid to the Payee
exceed the highest lawful rate of interest permissible under
applicable law.  If, from any circumstances whatsoever, fulfillment of
any provision hereof or any other documents securing the Indebtedness
at the time performance of such provision shall be due, shall involve
the payment of interest exceeding the highest rate of interest
permitted by law which a court of competent jurisdiction may deem
applicable hereto, then, ipso facto, the obligation to be fulfilled
shall be reduced to the highest lawful rate of interest permissible
under applicable law; and if for any reason whatsoever Payee shall
ever receive as interest an amount which would be deemed unlawful,
such interest shall be applied to the payment of the last maturing
installment or installments of the principal portion of the
Indebtedness (whether or not then due and payable) and not to the
payment of interest.

     Payment of this Note is secured by a Deed of Trust, Security
Agreement, Financing Statement and Fixture Filing (the "Deed of
Trust") dated on or about this same date by Maker, as Trustor for the
benefit of Payee, as Beneficiary, encumbering certain real estate and
other property interests situated in San Mateo, Napa, and Alameda
County, California and more particularly described in the Deed of
Trust (the "Premises").  This Note, the Deed of Trust, and all other
instruments now or hereafter evidencing, securing or guarantying the
loan evidenced hereby are sometimes collectively referred to as the
"Loan Documents".  The Deed of Trust contains  "due on sale or further
encumbrance" provisions which, together with all other terms of the
Deed of Trust, are incorporated herein by this reference.

     Payment of this Note is further secured by the "Other Security
Documents" as defined in the Cross-Collateralization Rider, which is
attached to the Deed of Trust as Exhibit B.

     NOTWITHSTANDING ANYTHING ELSE CONTAINED IN THIS NOTE, OR IN THE
OTHER LOAN DOCUMENTS, THIS NOTE MAY NOT BE PREPAID WITHOUT A
SIMULTANEOUS PREPAYMENT, IN FULL, OF THE OTHER NOTE, AS DEFINED IN THE
DEED OF TRUST (TOGETHER WITH ANY APPLICABLE PREPAYMENT PREMIUM
THEREON).

     In the event Payee applies any insurance proceeds or
condemnation proceeds to the reduction of the principal portion of the
Indebtedness in accordance with the terms of the Deed of Trust, and if
at such time no Event of Default exists hereunder and no event has
occurred which with the passage of time or the giving of notice would
be or become an Event of Default, then no Prepayment Premium shall be
due or payable as a result of such application.

     If the maturity of the Indebtedness is accelerated by Payee as a
consequence of the occurrence of an Event of Default, or in the event
the right to foreclose the Deed of Trust shall otherwise accrue to
Payee, the Maker agrees that an amount equal to the Prepayment Premium
(determined as if prepayment were made on the date of acceleration)
shall be added to the balance of unpaid principal and interest then
outstanding, and that the Indebtedness shall not be discharged except:
(i) by payment of such Prepayment Premium, together with the balance
of principal and interest and all other sums then outstanding, if the
Maker tenders payment of the Indebtedness prior to completion of a
non-judicial foreclosure sale (if applicable in California), judicial
order or judgment of foreclosure sale; or (ii) by inclusion of such
Prepayment Premium as a part of the Indebtedness in any such
completion of a non-judicial foreclosure sale (if applicable in
California), judicial order or judgment of foreclosure.  Maker has
separately signed this paragraph in accordance with Section 2954.10 of
the California Civil Code.

                              BEDFORD PROPERTY INVESTORS, INC., a
                              Maryland corporation

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


     It is hereby expressly agreed by Maker that time is of the
essence in the performance of this Note and that each of the following
occurrences shall constitute a default ("Event of Default") under this
Note:

          (i)  The failure of the Maker to:

               (a)  make any payment of principal or interest under
               this Note within ten (10) days after the same shall fall
               due, or

               (b) comply with any of the other terms of this Note
               within thirty (30) days after written notice of such
               failure has been given by Payee to Maker or within such
               longer period of time, not to exceed an additional thirty
               (30) days, or such longer period of time as agreed to by
               Payee, as may be reasonably necessary to cure such non-
               compliance if Maker is diligently and with continuity of
               effort pursuing such cure and the failure is susceptible
               of cure within such additional thirty-day period.

          (ii) The failure of Maker to make payment of any amount due
     the Payee under any Loan Document other than this Note, on the date
     the same shall fall due (including any applicable grace period).

          (iii) The occurrence of any breach, default, event of default
     or failure of performance (however denominated) under any Loan
     Document other than this Note, and the expiration of any applicable
     cure period without the same having been cured.

          (iv) The occurrence of an Event of Default under any of the
     "Other Note" or the "Other Security Documents" as such terms are
     defined in the Cross-Collateralization Rider, attached to the Deed
     of Trust as Exhibit B.

     From and after the date of the occurrence of any Event of Default and
continuing until such Event of Default is fully cured (if Maker is entitled
under this Note to cure such default) or until this Note is paid in full, the
Maker promises to pay interest on the principal balance of this Note then
outstanding at the rate (the "Default Rate") equal to the Note Rate plus five
percentage points per annum or, if less, the maximum rate permitted under
applicable law.  Interest at the Default Rate shall accrue on the amount of any
judgment rendered hereon or in connection with any foreclosure of the Deed of
Trust.  The Maker agrees that such additional interest which has accrued shall
be paid at the time of and as a condition precedent to the curing of such Event
of Default.  Notwithstanding anything herein to the contrary, during the
existence of any such Event of Default Payee may apply payments received on any
amounts due hereunder or under the terms of any of the Loan Documents as Payee
shall determine.

     Payee shall have the following rights, powers, privileges, options and
remedies whenever any Event of Default shall occur under this Note:

          (i)  To foreclose, or exercise any power of sale under, the
     Deed of Trust.

          (ii) To accelerate the maturity of the Indebtedness and
     declare the entire unpaid principal balance of, and any unpaid
     interest then accrued on, this Note, together with any Prepayment
     Premium, without demand or notice of any kind to the Maker or any
     other person, to be immediately due and payable.

          (iii) To exercise any and all rights, powers, privileges,
     options and remedies available at law or in equity and as provided
     in any of the Loan Documents.

     Upon the occurrence of an Event of Default, the Maker expressly agrees to
pay all costs of collection and enforcement of every kind, including without
limitation, all reasonable attorneys' fees and expenses, court costs, costs of
title evidence and insurance, inspection and appraisal costs and expenses of
every kind reasonably incurred by Payee in connection with the protection or
realization of any or all of the security for this Note, whether or not any
lawsuit is filed with respect thereto.  The occurrence of an Event of Default
under this Note shall constitute a default under each and all of the other Loan
Documents.

     The rights, powers, privileges, options and remedies of Payee, as
provided in this Note, in any of the Loan Documents, or otherwise available at
law or in equity shall be cumulative and concurrent, and may be pursued singly,
successively or together at the sole discretion of Payee, and may be exercised
as often as occasion therefor shall occur.  No delay or discontinuance in the
exercise of any right, power, privilege, option or remedy hereunder shall be
deemed a waiver of such right, power, privilege, option or remedy, nor shall
the exercise of any right, power, privilege, option or remedy be deemed an
election of remedies or a waiver of any other right, power, privilege, option
or remedy.  Without limiting the generality of the foregoing, the failure of
the Payee after the occurrence of any Event of Default to exercise Payee's
right to declare the Indebtedness remaining unmatured hereunder to be
immediately due and payable shall not constitute a waiver of such right in
connection with any future Event of Default.  Acceleration of maturity, once
elected by Payee, may be, in Payee's sole and absolute discretion rescinded by
Payee's written acknowledgment to that effect, but without limiting the
foregoing, the tender and acceptance of partial payment or partial performance
shall not, by itself, in any way affect or rescind such acceleration.

     Maker waives presentment for payment, demand, notice of nonpayment,
notice of dishonor, protest of any dishonor, notice of protest, notice of
intent to accelerate, notice of acceleration of maturity, and all other notices
in connection with the delivery, acceptance, performance, default or
enforcement of the payment of this Note, except as otherwise provided herein,
and agrees that if more than one the liability of each of them hereunder shall
be joint, several and unconditional without regard to the liability of any
other party and shall not be in any manner affected by any indulgence,
extension of time, renewal, waiver or modification granted or consented to by
Payee; and Maker consents to any and all extensions of time, renewals, waivers
or modifications that may be granted by Payee with respect to the payment or
other provisions of this Note, and to the release of any collateral given to
secure the payment hereof, or any part thereof, with or without substitution,
and agrees that additional makers or guarantors may become parties hereto
without notice to any of them or affecting any of their liability hereunder.

     Neither Payee nor Maker shall by any acts of omission or commission be
deemed to have waived any rights or remedies hereunder unless such waiver is in
writing and signed by Payee or Maker, and then only to the extent specifically
set forth therein; a waiver in respect of one event shall not be construed as
continuing or as a bar to the exercise or waiver of such right or remedy in
respect of a subsequent event.

     All notices, demands, requests, and other communications desired or
required to be given hereunder  ("Notices") shall be in writing and shall be
given by: (i) hand delivery to the address for Notices; (ii) delivery by
overnight courier service to the address for Notices; or (iii) sending the same
by United States mail, postage prepaid, certified mail, return receipt
requested, addressed to the address for Notices.

     All Notices shall be deemed given and effective upon the earliest to
occur of: (x) the hand delivery of such Notice to the address for Notices; (y)
one business day after the deposit of such Notice with an overnight courier
service by the time deadline for next day delivery addressed to the address for
Notices; or (z) three business days after depositing the Notice in the United
States mail, postage prepaid, as set forth in (iii) above.  All Notices shall
be addressed to the following addresses:

         Maker:     Bedford Property Investors, Inc.
                    270 Lafayette Circle
                    Lafayette, CA 94549
                    Attn:  Chief Financial Officer

         Payee:     Security Life of Denver Insurance Company
                    c/o ING Investment Management LLC
                    5780 Powers Ferry Road, NW, Suite 300
                    Atlanta, Georgia 30327-4349
                    Attention: Mortgage Loan Servicing Department

                              and

                    ING Investment Management LLC
                    5780 Powers Ferry Road, NW, Suite 300
                    Atlanta, Georgia  30327-4349
                    Attention:  Real Estate Law Department

With a copy to:     Nyemaster, Goode, Voigts, West,
                      Hansell & O'Brien, P.C.
                    700 Walnut, Suite 1600
                    Des Moines, Iowa 50309

or to such other persons or at such other place as any party hereto may by
Notice designate as a place for service of Notice.  Provided, that the "copy
to" Notice to be given as set forth above is a courtesy copy only; and a Notice
given to such person is not sufficient to effect giving a Notice to the
principal party, nor does a failure to give such a courtesy copy of a Notice
constitute a failure to give Notice to the principal party.

     This Note shall be governed by and construed in accordance with the laws
(excluding conflicts of laws rules) of California.

     Subject to the terms of the next succeeding paragraph and notwithstanding
anything to the contrary otherwise contained in this Note, but without in any
way releasing, impairing or otherwise affecting this Note or any of the other
Loan Documents (including without limitation any guaranties or indemnification
agreements) or the certain Environmental Indemnification Agreement to which
Maker is a party, or the validity hereof or thereof, or the lien of the Deed of
Trust, it is agreed that Payee's source of satisfaction of the Indebtedness and
Maker's other obligations hereunder and under the Loan Documents other than any
separate guaranty agreement or the Environmental Indemnification Agreement is
limited to (a) the Premises and proceeds thereof,  (b) rents, income, issues,
proceeds and profits arising out of the Premises, and (c) any separate guaranty
or indemnification agreements guarantying or indemnifying Payee with respect to
the payment of any amounts due hereunder and under the Loan Documents and/or
Maker's performance hereunder and under the Loan Documents; provided, however,
that nothing herein contained shall be deemed to be a release or impairment of
said Indebtedness or the security therefor intended by the Deed of Trust, or be
deemed to preclude Payee from foreclosing the Deed of Trust or from enforcing
any of Payee's rights or remedies in law or in equity thereunder, or in any way
or manner affecting Payee's rights and privileges under any of the Loan
Documents or any separate guaranty or indemnification agreements guarantying
Maker's payment and/or performance hereunder and/or under the Loan Documents.

PROVIDED, HOWEVER, NOTWITHSTANDING ANYTHING IN THIS NOTE TO THE CONTRARY, MAKER
SHALL PAY, AND THERE SHALL AT NO TIME BE ANY LIMITATION ON MAKER'S PERSONAL
LIABILITY FOR THE PAYMENT TO PAYEE OF:

          (i)  rents, security deposits, or other income, issues,
     profits, and revenues derived from the Premises after the occurrence
     of an Event of Default to the extent applied to anything other than
     (a) normal and necessary operating expenses of the Premises or (b)
     the Indebtedness evidenced by the Note.  It is understood that any
     rents collected more than one month in advance as of the time of the
     Event of Default shall be considered to have been collected after
     the Event of Default;

          (ii) any loss, cost or damages arising out of or in connection
     with fraud or material misrepresentations to Payee by Maker (or by
     any of its general partners, officers, shareholders, members, or
     their agents, if applicable);

          (iii) any loss, cost or damages arising out of or in
     connection with Maker's use or misapplication of (a) any proceeds
     paid under any insurance policies by reason of damage, loss or
     destruction to any portion of the Premises, or (b) proceeds or
     awards resulting from the condemnation or other taking in lieu of
     condemnation of any portion of the Premises, for purposes other than
     those set forth in the Deed of Trust;

          (iv) any loss, cost or damages arising out of or in connection
     with any waste of the Premises or any portion thereof and all
     reasonable costs incurred by Payee in order to protect the Premises;

          (v)  any taxes, assessments and insurance premiums for which
     Maker is liable under the Note, the Deed of Trust or any of the
     other Loan Documents and which are paid by Payee, other than out of
     Maker's contributions to escrow accounts maintained for that purpose
     (but not the proportionate amount of any such taxes, assessments and
     insurance premiums which accrue following the date of foreclosure
     [plus any applicable redemption period] or acceptance of a deed-in-
     lieu of foreclosure);

          (vi) any loss, cost or damages arising out of or in connection
     with any construction lien, mechanic's lien, materialman's lien or
     similar lien against the Premises arising out of acts or omissions
     of Maker;

          (vii) any loss, cost or damages arising out of or incurred in
     order to cause the Improvements to comply with the accessibility
     provisions of The Americans with Disabilities Act and each of the
     regulations promulgated thereunder, as the same may be amended from
     time to time which are required by any governmental authority;

          (viii) the total Indebtedness in the event that (a) Payee is
     prevented from acquiring title to the Premises after any Event of
     Default because of failure of Maker's title under federal, state or
     local laws, less any recovery received by Payee from any title
     insurance policy it holds in connection with the Premises or (b)
     Maker or any guarantor of any of Maker's obligations hereunder
     voluntarily files a petition in bankruptcy or commences a case or
     insolvency proceeding under any provision or chapter of the Federal
     Bankruptcy Code;

          (ix) any loss, cost, damages, expense and liability,
     including, but not limited to, reasonable attorneys' fees and costs,
     resulting from any act of Maker or its general partners,
     shareholders, beneficiaries, or members, as the case may be, to
     obstruct, delay or impede Payee from exercising any of its rights or
     remedies under the Loan Documents;

          (x)  the total Indebtedness in the event that (a) Maker makes
     an unpermitted transfer of an interest in the Maker or in the
     Premises without the prior written approval of Payee, or (b) Maker
     makes an unpermitted encumbrance on the Premises or on an interest
     in Maker without the prior written approval of Payee;

          (xi) all costs and fees, including without limitation
     reasonable attorney fees and costs, incurred by Payee in the
     enforcement of subparagraphs (i) through (x) above.

With the exception of those items of liability specifically set forth in items
(i) through (xi) above, the lien of any judgment against Maker in any
proceeding instituted on, under or in connection with this Note shall not
extend to any property now or hereafter owned by Maker other than the interest
of the Maker in the Premises and the other security for the payment of this
Note.

     This Note, together with the other Loan Documents and the certain
Environmental Indemnification Agreement executed by Maker, constitute the
entire agreement between the parties hereto pertaining to the subject matters
hereof and thereof and supersede all negotiations, preliminary agreements and
all prior or contemporaneous discussions and understandings of the parties
hereto in connection with the subject matters hereof and thereof.

     THE PARTIES HERETO, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO
CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY
IN ANY LITIGATION BASED ON OR ARISING OUT OF THIS AGREEMENT OR INSTRUMENT, OR
ANY RELATED INSTRUMENT OR AGREEMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS, WHETHER ORAL OR WRITTEN,
OR ACTION OF ANY PARTY HERETO.  NO PARTY SHALL SEEK TO CONSOLIDATE BY
COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN
WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED.  THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY
RESPECT OR RELINQUISHED BY ANY PARTY HERETO EXCEPT BY A WRITTEN INSTRUMENT
EXECUTED BY ALL PARTIES.

     Maker acknowledges receipt of a copy of this instrument at the time it
was signed.

     IN WITNESS WHEREOF, the Maker has executed and delivered this Promissory
Note as of the date first above written.

                              BEDFORD PROPERTY INVESTORS, INC., a Maryland
                              corporation


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





STATE OF CALIFORNIA      )
                         )SS.
COUNTY OF _______________)

     On ___________________, 2000, before me, __________________ personally
appeared Hanh Kihara, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that she executed the same in her authorized
capacity, and that by her signature on the instrument the person, or the entity
upon behalf of which person acted, executed the instrument.

     Witness my hand and official seal.

                                   ____________________________
                                   Notary

                                   (Seal)







                         Instrument Prepared By, And
                         When Recorded Return To:
                         Nyemaster, Goode, Voigts, West,
                          Hansell & O'Brien, P.C.
                         700 Walnut, Suite 1600
                         Des Moines, Iowa 50309
                         Attention: Bradford L. Austin


Bedford (CA)
19806.311

           DEED OF TRUST, SECURITY AGREEMENT, FINANCING
                   STATEMENT AND FIXTURE FILING

     THIS DEED OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT AND
FIXTURE FILING ("Deed of Trust") is made as of July 27, 2000, by
BEDFORD PROPERTY INVESTORS, INC., a Maryland corporation ("Trustor"),
with the mailing address of 270 Lafayette Circle, Lafayette,
California 94549, to FIRST AMERICAN TITLE INSURANCE COMPANY, with the
address of c/o First American Title Guaranty Company, its agent, 1850
Mount Diablo Boulevard, Walnut Creek, California 94596, Attn:  Pamela
Nicolini, as Trustee ("Trustee") for the benefit of SECURITY LIFE OF
DENVER INSURANCE COMPANY, a Colorado corporation ("Beneficiary") with
the mailing address of c/o ING Investment Management LLC, 5780 Powers
Ferry Road, NW, Suite 300, Atlanta, Georgia  30327-4349.

                       W I T N E S S E T H:

     WHEREAS, Trustor has executed and delivered to Beneficiary a
Promissory Note dated on or about this same date in the principal
amount of TWENTY-THREE MILLION FOUR HUNDRED FIFTEEN THOUSAND AND
NO/100 DOLLARS ($23,415,000), (which Promissory Note, together with
all notes issued and accepted in substitution or exchange therefor,
and as any of the foregoing may from time to time be modified,
extended, renewed, consolidated, restated or replaced, is hereinafter
sometimes referred to as the "Note"), which Note provides, among other
things, for final payment of principal and interest under the Note, if
not sooner paid or payable as provided therein, to be due on or before
the first day of August, 2025, the Note by this reference thereto
being incorporated herein; and

     WHEREAS, Beneficiary is desirous of securing the prompt payment
of the Note together with interest, charges and prepayment fees, if
any, thereon in accordance with the terms of the Note, and any
additional indebtedness accruing to Beneficiary on account of any
future payments, advances or expenditures made by Beneficiary pursuant
to the Note or this Deed of Trust and any additional sums with
interest thereon which may be loaned to Trustor by Beneficiary or
advanced under the Loan Documents (as hereinafter defined) (all
hereinafter sometimes collectively referred to as the "Indebtedness").

     WHEREAS, Trustor is desirous of further securing the prompt
payment of the "Other Note," as such term is defined in the Cross-
Collateralization Rider attached hereto as Exhibit B.

     NOW, THEREFORE, TRUSTOR, TO SECURE PAYMENT of the Note, the Other
Note, and the performance of the covenants and agreements herein
contained to be performed by Trustor, for good and valuable
consideration in hand paid, the receipt and adequacy whereof are
hereby acknowledged, and intending to be legally bound, hereby agrees
and covenants as follows:

     1.   Granting Clauses.  Trustor hereby irrevocably and absolutely
does by these presents GRANT AND CONVEY, WARRANT, SET OVER, TRANSFER,
ASSIGN, BARGAIN AND SELL to Trustee, and its successors in trust, for
the benefit of Beneficiary, its successors and assigns, with all
powers of sale (if any) and all statutory rights under the laws of
California, and grants to Trustee, for the benefit of Beneficiary, a
security interest in, all of Trustor's present and hereafter acquired
estate, right, title and interest in, to and under the following
(collectively referred to herein as the "Premises"):

     (a)  That certain real property situated in San Mateo, Napa, and
Alameda Counties, California, and more particularly described in
Exhibit "A" attached hereto and incorporated herein by this reference
(the "Land"), together with all buildings, structures and improvements
now or hereafter erected on the Land, together with all fixtures and
items that are to become fixtures thereto (collectively, the
"Improvements");

     (b)  All and singular the easements, rights-of-way, licenses,
permits, rights of use or occupancy, privileges, tenements,
appendages, hereditaments and appurtenances and other rights and
privileges attached or belonging to the Land or Improvements or in
anyway pertaining thereto, whether now or in the future;

     (c)  The land lying within any street, alley, avenue, roadway or
right-of-way open or proposed or hereafter vacated in front of or
adjoining the Land; and all right, title and interest, if any, of
Trustor in and to any strips and gores adjoining the Land;

     (d)  All machinery, apparatus, equipment, goods, systems,
building materials, carpeting, furnishings, fixtures and property of
every kind and nature whatsoever, now or hereafter located in or upon
or affixed to the Land or Improvements, or any part thereof, or used
or usable in connection with any construction on or any present or
future operation of the Land or Improvements, now owned or hereafter
acquired by Trustor, including, but without limitation of the
generality of the foregoing: all heating, lighting, refrigerating,
ventilating, air-conditioning, air-cooling, fire extinguishing,
plumbing, cleaning, telephone, communications and power equipment,
systems and apparatus; and all elevators, switchboards, motors, pumps,
screens, awnings, floor coverings, cabinets, partitions, conduits,
ducts and compressors; and all cranes and craneways, oil storage,
sprinkler/fire protection and water service equipment; and also
including any of such property stored on the Land or Improvements or
in warehouses and intended to be used in connection with or
incorporated into the Land or Improvements or for the pursuit of any
other activity in which Trustor may be engaged on the Land or
Improvements, and including without limitation all tools, musical
instruments and systems, audio or video equipment, cabinets, awnings,
window shades, venetian blinds, drapes and drapery rods and brackets,
screens, carpeting and other window and floor coverings, decorative
fixtures, plants, cleaning apparatus, and cleaning equipment,
refrigeration equipment, cables, computers and computer equipment,
software, books, supplies, kitchen equipment, appliances, tractors,
lawn mowers, ground sweepers and tools, swimming pools, whirlpools,
recreational or play equipment together with all substitutions,
accessions, repairs, additions and replacements to any of the
foregoing; it being understood and agreed that all such machinery,
equipment, apparatus, goods, systems, fixtures, and property are a
part of the Improvements and are declared to be a portion of the
security for the Indebtedness (whether in single units or centrally
controlled, and whether physically attached to said real estate or
not), excluding, however, personal property owned by tenants of the
Land or Improvements; and

     (e)  Any and all awards, payments or insurance proceeds,
including interest thereon, and the right to receive the same, which
may be paid or payable with respect to the Land or Improvements or
other properties described above as a result of: (1) the exercise of
the right of eminent domain or action in lieu thereof; or (2) the
alteration of the grade of any street; or (3) any fire, casualty,
accident, damage or other injury to or decrease in the value of the
Land or Improvements or other properties described above, to the
extent of all amounts which may be secured by this Deed of Trust at
the date of receipt of any such award or payment by Trustor or
Beneficiary, and of the reasonable counsel fees, costs and
disbursements incurred by Trustor or Beneficiary in connection with
the collection of such award or payment.  Trustor agrees to execute
and deliver, from time to time, such further instruments as may be
requested by Beneficiary to confirm such assignment to Beneficiary of
any such award or payment.

     The parties intend the definition of Premises to be broadly
construed and in the case of doubt as to whether a particular item is
to be included in the definition of Premises, the doubt should be
resolved in favor of inclusion.

     TO HAVE AND TO HOLD the Premises with all rights, privileges and
appurtenances thereunto belonging, unto Beneficiary, its successors
and assigns, forever, for the uses and purposes herein expressed.

     THIS DEED OF TRUST IS GIVEN TO SECURE PAYMENT OF THE FOLLOWING
(all of which shall be included in the term "Indebtedness", as
initially defined above):  Payment of the Note; payment of such
additional sums with interest thereon which may hereafter be loaned to
Trustor by Beneficiary pursuant to the Note, the Other Note, or the
Deed of Trust or otherwise advanced under the Loan Documents (the
"Loan"), including without limitation advances made by Beneficiary to
protect the Premises or the lien of this Deed of Trust or to pay
taxes, assessments, insurance premiums, and all other amounts that
Trustor has agreed to pay pursuant to the provisions hereof or that
Beneficiary has incurred by reason of the occurrence of an Event of
Default (as hereinafter defined), including without limitation,
advances made to enable the completion of the Improvements or any
restoration thereof, even though the aggregate amount outstanding at
any time may exceed the original principal balance stated herein and
in the Note; and the due, prompt and complete performance of each and
every covenant, condition and agreement contained in this Deed of
Trust, the Note, and every other agreement, document and instrument to
which reference is expressly made in this Deed of Trust or which at
any time evidences or secures the Indebtedness evidenced by the Note
(this Deed of Trust, the Note and all such other agreements, documents
and instruments, but excluding the certain Environmental
Indemnification Agreement executed by Trustor, are hereinafter
sometimes collectively referred to as the "Loan Documents"), and
payment of the Other Note and other obligations related thereto, as
set forth in the Cross-Collateralization Rider attached hereto as
Exhibit B.  Trustor hereby warrants that Trustor has good and
marketable title to the Premises, is lawfully seized and possessed of
the Premises and every part thereof, and has the right to convey same;
that Trustor will forever warrant and defend the title to the Premises
unto Beneficiary against the claims of all persons whomsoever; and
that the Premises are unencumbered except as set forth on
Beneficiary's title insurance policy dated on or about even date
herewith regarding the Premises.

     Trustor will pay all amounts payable under the Note and all
amounts payable under other agreements which comprise the Indebtedness
in accordance with the terms of the Note and such other agreements.
The provisions of the Note and the other agreements which comprise the
Indebtedness are hereby incorporated by reference into this Deed of
Trust as is fully set forth herein.

TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR HEREBY
COVENANTS AND AGREES AS FOLLOWS:

     2.   Maintenance, Repair and Restoration of Improvements, Payment
of Prior Liens, etc.  Trustor shall: (a) promptly repair, restore or
rebuild any Improvements now or hereafter on the Premises which may
become damaged or be destroyed, such Improvements to be of at least
equal value and substantially the same character as prior to such
damage or destruction; (b) keep the Premises in good condition and
repair, without waste, and free from mechanics' liens or other liens
or claims for lien (except the lien of current general taxes duly
levied and assessed but not yet due and payable); (c) immediately pay
when due or within any applicable grace period any indebtedness which
may be secured by a lien or charge on the Premises (no such lien,
except for current general taxes duly levied and assessed but not yet
payable, to be permitted hereunder), and upon request exhibit
satisfactory evidence to Beneficiary of the discharge of such lien;
(d) complete within a reasonable time any Improvements now or at any
time in process of erection upon the Land; (e) comply in all material
respects with all requirements of law (including, without limitation,
pollution control and environmental protection laws and laws relating
to the accommodation of persons with disabilities), ordinance or other
governmental regulation in effect from time to time affecting the
Premises and the use thereof, and covenants, easements and
restrictions of record with respect to the Premises and the use
thereof; (f) make no material alterations in the Premises; (g) suffer
or permit no material change in the general nature of the use of the
Premises, without Beneficiary's written consent; (h) initiate or
acquiesce in no zoning reclassification or variance with respect to
the Premises without Beneficiary's written consent; and (i) pay each
item of Indebtedness when due according to the terms hereof or of the
Note.

     3.   Payment of Taxes.  Trustor shall pay thirty (30) days before
any delinquency or any penalty or interest attaches all general taxes,
special taxes, special assessments, water charges, sewer service
charges, and all other charges against the Premises of any nature
whatsoever when due, and shall, upon written request, furnish to
Beneficiary duplicate receipts therefor.

     3A.  Contest of Impositions.

     Notwithstanding anything contained herein to the contrary,
Trustor shall not be required to pay or discharge any taxes,
assessments or other charges of the nature referred to in Paragraphs 2
and 3 so long as the Trustor shall in good faith contest the same or
the validity thereof by appropriate legal proceedings which shall
operate to prevent the collection of the levy, lien or imposition so
contested and the sale of the Premises, or any part thereof, to
satisfy any obligation arising therefrom, provided that the Trustor
shall give such security as may be demanded by Beneficiary to insure
such payments and prevent any sale or forfeiture of the Premises by
reason of such nonpayment, failure of performance or contest by
Trustor.  Any such contest shall be prosecuted with due diligence and
the Trustor shall promptly after final determination thereof pay the
amount of any levy, lien or imposition so determined, together with
all interest and penalties, which may be payable in connection
therewith.  Notwithstanding the provisions of this Paragraph, Trustor
shall (and if Trustor shall fail so to do, Beneficiary may but shall
not be required to) pay any such levy, lien or imposition
notwithstanding such contest if in the reasonable opinion of the
Beneficiary, the Premises shall be in jeopardy or in danger of being
forfeited or foreclosed.

     4.   Tax Deposits.  Upon written request of Beneficiary, Trustor
covenants and agrees to deposit with such depositary as the
Beneficiary from time to time may in writing appoint, and in the
absence of such appointment, then at the office of Beneficiary,
c/o ING Investment Management LLC, 5780 Powers Ferry Road, NW, Suite
300, Atlanta, Georgia  30327-4349, Attention: Mortgage Loan Servicing
Department, commencing on the date of disbursement of the loan secured
hereby and on the first day of each month following the month in which
said disbursement occurred until the Indebtedness is fully paid, a sum
equal to one-twelfth (1/12th) of the last total annual taxes and
assessments for the last ascertainable year (if the current year's
taxes and assessments are not yet ascertainable) (general and special)
on the Premises (unless said taxes are based upon assessments which
exclude the Improvements or any part thereof now constructed or to be
constructed, in which event the amount of such deposits shall be based
upon the Beneficiary's reasonable estimate as to the amount of taxes
and assessments to be levied and assessed).  Such deposits are to be
held without any allowance of interest (unless local law requires
otherwise) and are to be used for the payment of taxes and assessments
(general and special) on the Premises next due and payable when they
become due.  Upon demand by such depositary, Trustor shall deliver and
pay over to such depositary from time to time such additional sums or
such additional security as are necessary to make up any deficiency in
the amount necessary to enable such depositary to fully pay any of the
items hereinabove mentioned as they become payable. If the funds so
deposited exceed the amount required to pay such items hereinabove
mentioned for any year, the excess shall be applied on a subsequent
deposit or deposits (or refunded to Trustor if in last year of loan).
Said deposits need not be kept separate and apart from any other funds
of Beneficiary or such depositary.

     Trustor may deliver a letter of credit to Beneficiary in lieu of
escrow deposits, which letter of credit shall be drawn on an
institution and contain such terms as are satisfactory to Beneficiary
in its sole discretion.

     If any such taxes or assessments (general or special) shall be
levied, charged, assessed or imposed upon or for the Premises, or any
portion thereof, and if such taxes or assessments shall also be a
levy, charge, assessment or imposition upon or for any other property
not covered by the lien of this Deed of Trust, then the computation of
any amount to be deposited under this Paragraph 4 shall be based upon
the entire amount of such taxes or assessments, and Trustor shall not
have the right to apportion the amount of any such taxes or
assessments for the purposes of such computation.

     5.   Beneficiary's Interest In and Use of Deposits.  Upon the
occurrence of an Event of Default, Beneficiary may at its option,
without being required to do so, apply any monies at the time on
deposit pursuant to Paragraphs 4 and 7 hereof, on any of Trustor's
obligations herein or in the Note or any of the Loan Documents
contained, in such order and manner as the Beneficiary may elect.
When the Indebtedness has been fully paid, any remaining deposits
shall be paid to Trustor or to the then owner or owners of the
Premises.  A security interest within the meaning of the California
Uniform Commercial Code ("UCC") is hereby granted to the Beneficiary
in and to any monies at any time on deposit pursuant to Paragraphs 4
and 7 hereof and such monies and all of Trustor's right, title and
interest therein are hereby assigned to Beneficiary, all as additional
security for the Indebtedness and shall in the absence of the
occurrence of an Event of Default be applied by the depositary for the
purposes for which made hereunder and shall not be subject to the
direction or control of Trustor; provided, however, that neither
Beneficiary nor said depositary shall be liable for any failure to
apply to the payment of taxes and assessments and insurance premiums
any amount so deposited.  Neither Beneficiary nor any depositary
hereunder shall be liable for any act or omission taken in good faith
or pursuant to the instruction of any party but only for its willful
misconduct.

     6.   Insurance.

     (a)  Until the Indebtedness is fully paid, the Improvements and
all fixtures, equipment and property therein contained or installed
shall be kept unceasingly insured against loss and damage by such
hazards, casualties and contingencies in such amounts and for such
periods as may from time to time be required by Beneficiary.  All
insurance shall be written in policies and by insurance companies
approved by Beneficiary which approval shall not be unreasonably
withheld so long as a Best Class rating of at least A XII is
maintained and the policy otherwise conforms to the terms hereof.  All
policies of insurance and renewals thereof shall contain standard
noncontributory mortgagee loss payable clauses to Beneficiary and
shall provide for at least thirty (30) days prior written notice of
cancellation to Beneficiary as well as a waiver of subrogation
endorsement, all as required by Beneficiary, in form and content
acceptable to Beneficiary.  All policies (or duplicate originals
thereof) shall, with all premiums fully paid, be delivered to
Beneficiary as issued at least thirty (30) days before the expiration
of existing policies and shall be held by Beneficiary until all sums
hereby secured are fully paid.  Upon request by Beneficiary, Trustor
shall furnish Beneficiary evidence of the replacement cost of the
Improvements.  Beneficiary shall not by reason of accepting,
rejecting, approving or obtaining insurance incur any liability for
payment of losses.

     (b)  Without in any way limiting the generality of the foregoing,
Trustor covenants and agrees to maintain insurance coverage on the
Premises which shall include:  (i) all risk coverage property
insurance (insuring against special causes of loss) for an amount
equal to one hundred percent (100%) of the full replacement cost of
the Improvements, written on a replacement cost basis and with a
replacement cost endorsement (without depreciation), with no co-
insurance (or with an agreed amount endorsement deleting to the co-
insurance clause), and containing a mortgagee clause in Beneficiary's
favor; and if at any time a dispute arises with respect to replacement
cost, Trustor agrees to provide at Trustor's expense, an insurance
appraisal prepared by an insurance appraiser approved by Beneficiary,
establishing the full replacement cost in a manner satisfactory to the
insurance carrier; (ii) rent loss insurance insuring against loss
arising out of the perils insured against in the policy or policies
referred to in clause (i) above, in an amount equal to not less than
gross revenue from the Premises for twelve (12) months from the
operation and rental of all Improvements now or hereafter forming part
of the Premises, based upon one hundred percent (100%) occupancy of
such Improvements, less any allocable charges and expenses which do
not continue during the period of restoration and naming Beneficiary
in a standard mortgagee loss payable clause thereunder;(iii)
commercial general liability insurance with a broad form coverage
endorsement for an amount as required from time to time by the
Beneficiary but not less than an aggregate amount of Three Million and
No/100 Dollars ($3,000,000.00) with a single occurrence limit of not
less than Three Million and No/100 Dollars ($3,000,000.00) for claims
arising from any one (1) accident or occurrence in or upon the
Premises and naming Beneficiary as an additional insured thereunder;
(iv) flood insurance whenever in Beneficiary's judgment such
protection is necessary and is available and in such case in an amount
acceptable to Beneficiary and naming Beneficiary as the loss payee
thereunder; (v) insurance covering pressure vessels, pressure piping
and machinery, if any, and all major components of any centralized
heating or air-conditioning systems located in the Improvements, in an
amount satisfactory to Beneficiary, such policies also to insure
against physical damage to such buildings and improvements arising out
of peril covered thereunder;(vi) earthquake insurance; and (vii) such
other insurance that may be reasonably required from time to time by
Beneficiary.  The earthquake coverage shall be in the amount of
$20,000,000 in total, with a deductible of $100,000 for any of the
Premises located outside California, and the greater of 10% of the
loss or $200,000 for any of the Premises in California constructed
prior to 1975, and the greater of 6% of the loss or $100,000 for any
of the Premises in California constructed during or after 1975.

     (c)  Trustor shall not take out separate insurance concurrent in
form or contributing in the event of loss with that required to be
maintained hereunder.

     (d)  In accordance with California Civil Code Section 2955.5,
nothing contained in this Deed of Trust or the other Loan Documents
shall be interpreted to require Trustor to provide hazard insurance
coverage against damage to the improvements on the Premises in an
amount exceeding the replacement value of such improvements.

     7.   Insurance Premium Deposits.  It is further covenanted and
agreed that for the purpose of providing funds with which to pay the
premiums as the same become due on the policies of insurance as herein
covenanted to be furnished by the Trustor, Trustor shall deposit with
Beneficiary or the depositary referred to in Paragraph 4 hereof on the
date of disbursement of the proceeds of the loan secured hereby and on
the first day of each month following the month in which said
disbursement occurred, an amount equal to the annual premiums that
will next become due and payable on such policies less any amount then
on deposit with the Beneficiary or such depositary, divided by the
number of months to elapse thirty (30) days prior to the date when
such premiums become delinquent.  No interest shall be allowed to
Trustor on account of any deposit or deposits made hereunder and said
deposits need not be kept separate and apart from any other funds of
Beneficiary or such depositary.  Trustor may deliver a letter of
credit to Beneficiary in lieu of escrow deposits, which letter of
credit shall be drawn on an institution and contain such terms as are
satisfactory to Beneficiary in the sole discretion.

     8.   Adjustment of Losses with Insurer and Application of
Proceeds of Insurance.

     (a)  In case of loss or damage by fire or other casualty, Trustor
shall immediately give Beneficiary and the insurance companies that
have insured against such risks written notice of such occurrence.

     (b)  In case of loss or damage by fire or other casualty, Trustor
shall, if no Event of Default then exists hereunder, have the
reasonable right to settle, compromise or adjust any claim under, and
receive, for the purpose of rebuilding and restoration, the proceeds
arising from, any and all losses payable under insurance policies to
the extent the amount thereof does not exceed One Hundred Thousand and
No/100 Dollars ($100,000), and all claims for losses in excess of said
amount shall be settled, compromised or adjusted only with the mutual
agreement of Trustor and Beneficiary and the proceeds paid as
hereinafter provided.  In the event insurance proceeds in excess of
One Hundred Thousand and No/100 Dollars ($100,000) are payable or if
an Event of Default exists hereunder, then in either of such events,
Beneficiary is authorized to collect and receipt for any insurance
proceeds.  Insurance proceeds collected by Beneficiary as aforesaid,
after deducting therefrom any expenses incurred in the collection
thereof, shall, if requested by Trustor in writing within thirty (30)
days after the proceeds of insurance covering such damage or
destruction become available, be made available to Trustor for the
purpose of paying the cost of rebuilding or restoring of the
Improvements if (i) the Premises, in Beneficiary's reasonable
discretion is capable of being restored to that condition which
existed immediately prior to the damage or loss, (ii) the insurance
proceeds, together with all other funds which are to be provided by
Trustor, are sufficient to restore the Premises, (iii) Beneficiary
determines that income from the Premises shall not be materially
affected following the completion of the restoration or rebuilding;
and (iv) no Event of Default then exists hereunder or under any other
Loan Document, and no circumstance or condition exists that would
constitute an Event of Default upon the giving of notice or the
passage of time, or both. In the event that Beneficiary makes said
proceeds available to Trustor to pay the cost of rebuilding or
restoring of the Improvements, such proceeds shall be made available
in the manner and under the conditions that the Beneficiary may
reasonably require to assure proper application of such proceeds.  In
the event such insurance proceeds are made available by the
Beneficiary, the Trustor shall pay all costs incurred by Beneficiary
in connection with the application of such insurance proceeds
(including but not limited to reasonable costs incurred by
Beneficiary, and a title company or agent approved by Beneficiary in
overseeing the disbursement of such insurance proceeds).  The
Improvements shall be restored or rebuilt so as to be of at least
equal value and substantially the same character as prior to such
damage or destruction.  If the projected cost of rebuilding, repairing
or restoring of the Improvements exceeds the sum of One Hundred
Thousand and No/100 Dollars ($100,000), then insurance proceeds shall
not be made available to Trustor unless and until Beneficiary has
approved plans and specifications for the proposed rebuilding and
restoration, which approval shall not be unreasonably withheld.  If
the proceeds are to be made available by Beneficiary to Trustor to pay
the cost of said rebuilding or restoration, any surplus which may
remain out of said insurance proceeds after payment of the costs of
rebuilding or restoring the Premises shall, at the option of the
Beneficiary, be applied on account of the Indebtedness or be paid to
any party entitled thereto under such conditions as Beneficiary may
reasonably require.  No interest shall be allowed to Trustor on any
proceeds of insurance held by Beneficiary.

     (c)  In the event proceeds of insurance are not made available to
Trustor for the purpose of paying the cost of the rebuilding or
restoring of the Improvements, Beneficiary, after deducting the costs
of any collection, adjustment and compromise, shall apply such
insurance proceeds in accordance with terms of the Note upon the
Indebtedness, provided that any amount so applied by Beneficiary in
reduction of the outstanding principal balance of the Note shall be
credited to installments of principal in the inverse order of their
maturity but no such application shall delay or postpone any
installment payment of principal and interest under the Note.

     9.   Stamp Tax.  If, by the laws of the United States of America,
or of any state having jurisdiction over Trustor, any tax is due or
becomes due in respect of the issuance of the Note hereby secured and
this Deed of Trust, Trustor covenants and agrees to pay such tax in
the manner required by any such law.  Trustor further covenants to
reimburse Beneficiary for any sums which Beneficiary reasonably
expends by reason of the imposition of any tax on the issuance of the
Note secured hereby and this Deed of Trust.

     10.  Observance of Lease Assignment.

     (a)  Trustor, as landlord, has assigned to Beneficiary, by that
certain Assignment of Rents and Leases dated on or about this same
date (the "Assignment of Rents"), all of Trustor's right, title and
interest as landlord in and to all leases or other rights of use and
or occupancy of any part of the Premises, both present and future
(hereinafter collectively referred to as the "Leases") and all of the
rents, issues, profits, royalties, revenues and proceeds arising in
connection with the ownership, use or operation of the Premises,
including without limitation rents, issues and profits from the Leases
or guaranties thereof (hereinafter collectively referred to as the
"Rents").+


     (b)  All Leases entered into after the date hereof shall be bona
fide arms-length transactions with a third party,

     (c)  Trustor will not, without Beneficiary's prior written
consent:  (i) execute an assignment or pledge of any Rents and/or any
Leases other than the Assignment of Rents; or (ii) accept any
prepayment of any installment of any Rents more than thirty (30) days
before the due date of such installment, and in any event no more than
thirty (30) days in advance of the then current month.

     (d)  Trustor at its sole cost and expense will:  (i) at all times
promptly and faithfully abide by, discharge and perform in all
material respects all of the covenants, conditions and agreements
contained in all Leases, on the part of the landlord thereunder to be
kept and performed; (ii) enforce or secure the performance of all of
the covenants, conditions and agreements of the Leases on the part of
the lessees to be kept and performed; (iii) appear in and defend any
action or proceeding arising under, growing out of or in any manner
connected with the Leases or the obligations, duties or liabilities of
landlord or of the lessees thereunder; (iv) upon written request of
Beneficiary, transfer and assign to Beneficiary, any Lease or Leases
heretofore or hereafter entered into, and make, execute and deliver to
Beneficiary upon demand, any and all instruments required to
effectuate said assignment; (v) furnish Beneficiary, within ten (10)
days after a request by Beneficiary so to do, a written statement
containing the names of all lessees, terms of all Leases, including
the spaces occupied and the rentals payable thereunder; and (vi)
exercise within five (5) days of any demand therefor by Beneficiary
any right to request from the lessee under any Lease a certificate
with respect to the status thereof.

     (e)  Nothing in this Deed of Trust or in any other documents
relating to the loan secured hereby shall be construed to obligate
Beneficiary, expressly or by implication, to perform any of the
covenants of Trustor as landlord under any of the Leases assigned to
Beneficiary or to pay any sum of money or damages therein provided to
be paid by the landlord, each and all of which covenants and payments
Trustor agrees to perform and pay.

     (f)  Trustor will not permit any Lease or any part thereof to
become subordinate to any lien other than the lien hereof.

     (g)  Beneficiary shall have the option to declare this Deed of
Trust in default because of a default of landlord in any Lease of the
Premises unless such default is cured by Trustor pursuant to the terms
of the Lease or unless such default would not permit the tenant to
terminate the Lease.  It is covenanted and agreed that an Event of
Default under the Assignment of Rents shall constitute an Event of
Default hereunder on account of which the whole of the Indebtedness
shall at once, at the option of the Beneficiary, become immediately
due and payable without notice to the Trustor.

     (h)  Trustor shall not, and shall not permit any tenant to,
conduct any on-site dry cleaning operations on the Premises.

     (i)  In the event of the enforcement by Beneficiary of the
remedies provided for by law or by this Deed of Trust, the lessee
under each Lease of the Premises shall, at the option of Beneficiary,
attorn to any person succeeding to the interest of Trustor as a result
of such enforcement and shall recognize such successor in interest as
landlord under such Lease without change in the terms or other
provisions thereof; provided, however, that said successor in interest
shall not be bound by any payment of rent or additional rent for more
than one month in advance or any amendment or modification to any
Lease made without the consent of Beneficiary or said successor in
interest (unless such consent was not required under the terms
hereof).  Each lessee, upon request by said successor in interest,
shall execute and deliver an instrument or instruments confirming such
attornment.

     11.  Effect of Extension of Time.  If the payment of the
Indebtedness, or any part thereof, is extended or varied, or if any
part of any security for the payment of the Indebtedness is released,
or if any person or entity liable for the payment of the Indebtedness
is released, or if Beneficiary takes other or additional security for
the payment of the Indebtedness, or if Beneficiary waives or fails to
exercise any right granted herein, or in the Note secured hereby, or
in any other instrument given to secure the payment hereof, then all
persons now or at any time hereafter liable for the payment of the
Indebtedness, or any part thereof, or interested in the Premises shall
be held to assent to such extension, variation, release, waiver,
failure to exercise or the taking of additional security, and their
liability and the lien and all provisions hereof shall continue in
full force, the right of recourse against all such persons being
expressly reserved by Beneficiary, notwithstanding such extension,
variation, release, waiver, failure to exercise, or the taking of
additional security.

     12.  Effect of Changes in Laws Regarding Taxation.  In the event
of the enactment after this date of any law of the state in which the
Premises are located deducting from the value of the Premises for the
purpose of taxation any lien thereon, or imposing upon the Beneficiary
the payment of the whole or any part of the taxes or assessments or
charges or liens herein required to be paid by Trustor, or changing in
any way the laws relating to the taxation of mortgages or debts
secured by mortgages or Beneficiary's interest in the Premises, or the
manner of collection of taxes, so as to affect this Deed of Trust or
the debt secured hereby or the holders thereof, then, and in any such
event, Trustor, upon demand by Beneficiary, shall pay such taxes or
assessments, or reimburse Beneficiary therefor if Beneficiary pays
such taxes and submits proof of payment to Trustor; provided, however,
that if in the opinion of counsel for Beneficiary:  (a) it might be
unlawful to require Trustor to make such payment, or (b) the making of
such payment might result in the imposition of interest beyond the
maximum amount permitted by law; then and in such event, Beneficiary
may elect, by notice in writing given to Trustor, to declare all of
the Indebtedness to be and become due and payable sixty (60) days from
the giving of such notice, without the applicable Prepayment Premium
(as defined in the Note).

     13.  Beneficiary's Performance of Defaulted Acts.  Upon the
occurrence of an Event of Default herein, Beneficiary may, but need
not, and whether electing to declare the whole of the Indebtedness due
and payable or not, and without waiver of any other remedy, make any
payment or perform any act herein required of Trustor in any form and
manner deemed expedient, and may, but need not, make full or partial
payments of principal or interest on prior encumbrances, if any, and
purchase, discharge, compromise or settle any tax lien or other prior
lien or title or claim thereof, or redeem from any tax sale or
forfeiture affecting the Premises or contest any tax or assessment or
cure any default of Trustor as landlord in any Lease.  All monies paid
for any of the purposes herein authorized and all expenses paid or
incurred in connection therewith, including reasonable attorneys'
fees, and any other monies advanced by Beneficiary in regard to any
tax referred to in Paragraphs 9 and 12 hereof or to protect the
Premises or the lien hereof, shall be additional Indebtedness and
shall become immediately due and payable without notice and with
interest thereon at the Default Rate of interest set forth in the
Note.  Inaction of Beneficiary shall never be considered as a waiver
of any right accruing to it on account of any Event of Default on the
part of Trustor.

     14.  Beneficiary's Reliance on Tax Bills, Etc.  Beneficiary in
making any payment hereby authorized: (a) relating to taxes and
assessments, may do so according to any bill, statement or estimate
procured from the appropriate public office without inquiry into the
accuracy of such bill, statement or estimate or into the validity of
any tax, assessment, sale, forfeiture, tax lien or title or claim
thereof; or (b) relating to insurance premiums, may do so according to
any bill or statement procured from the appropriate company without
inquiry into the accuracy of such bill or statement; or (c) for the
purchase, discharge, compromise or settlement of any other prior lien,
may do so only with inquiry as to the validity or amount of any claim
for lien which may be asserted.

     15.  Acceleration of Indebtedness in Event of Default. It is
expressly agreed by Trustor that time is of the essence hereof and
that the whole of the Indebtedness shall become immediately due and
payable without notice to Trustor at the option of the Beneficiary
upon the occurrence of one or more of the following events
(hereinbefore and hereinafter collectively referred to as "Events of
Default" and individually referred to as an "Event of Default"),
together with a prepayment premium in the amount, if any, required to
be paid pursuant to the terms of the Note in the event of a
prepayment:

     (a)  nonpayment of any monetary sum due hereunder within ten (10)
days after the same shall become due; or

     (b)  default shall be made in the due observance or performance
of the terms and conditions of Paragraph 6 hereof (Insurance) or
Paragraph 30 hereof (Due on Sale or Further Encumbrance); or

     (c)  default shall be made in the due observance or performance
of any of the other covenants, agreements or conditions hereinbefore
or hereinafter contained, required to be kept or performed or observed
by the Trustor which does not relate to the nonpayment of any monetary
sum, and such default is not cured within thirty (30) days following
written notice thereof by Beneficiary to Trustor or within such longer
period of time, not exceeding an additional thirty (30) days, as may
be reasonably necessary to cure such non-compliance if Trustor is
diligently and with continuity of effort pursuing such cure and the
failure is susceptible of cure within an additional period of thirty
(30) days, unless Beneficiary approves a longer period of time; or

     (d) the entry of a decree or order for relief by a court having
jurisdiction in respect of Trustor, a general partner of Trustor if
Trustor is a partnership, the beneficiary or beneficiaries of Trustor
if Trustor is a trust, a managing member of Trustor if Trustor is a
limited liability company, or any guarantor of the Note secured hereby
(any of the foregoing parties being referred to herein as a "Key
Party"), in any involuntary case under the federal bankruptcy laws now
or hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law, or for the appointment of
a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
other similar official) for any Key Party or any substantial part of
the property of any such Key Party, or for the winding up or
liquidation of the affairs of any Key Party and the continuance of any
such decree or order unstayed and in effect for a period of sixty (60)
consecutive days; or

     (e)  the commencement by any Key Party, of a voluntary case under
federal bankruptcy laws, as now constituted or hereafter amended, or
any other applicable federal or state bankruptcy, insolvency or any
other similar laws or the consent by any such Key Party to the
appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official)
of any Key Party, or of any substantial part of the property of any
such person or entity, or the making by any such Key Party of an
assignment for the benefit of creditors or the failure of any such Key
Party generally to pay the debts of any such Key Party as such debts
become due, or the taking of action by any such Key Party in
furtherance of any of the foregoing, unless such case, receiver,
assignment, or action is dismissed or rescinded within sixty (60)
days; or

     (f)  the death of any guarantor of the Note secured hereby,
unless a substitute guarantor or guarantors having a net worth or an
aggregate net worth, as the case may be, equal to or greater than the
net worth of the decedent upon the date hereof shall become liable by
assumption under the guaranty within thirty (30) days of the death of
such guarantor; or

     (g)  any warranty, representation, certification, financial
statement, or other information furnished or to be furnished to
Beneficiary by or on behalf of Trustor or any guarantor of the Note to
induce Beneficiary to loan the money evidenced by the Note proves to
have been inaccurate or false in any material respect when made; or

     (h)  any breach, default, event of default or failure of
performance (however denominated) under the Note, any of the other
Loan Documents, the Other Note, or the Other Security Documents and
the expiration of any applicable cure period without the same having
been cured; or

     (i)  Trustor shall be, in any material respect, in default of, or
in violation of, beyond any applicable grace or cure period, any
conditions, covenants or restrictions which benefit or burden the
Premises.

     If, while any insurance proceeds or condemnation awards are being
held by Beneficiary to reimburse Trustor for the cost of rebuilding or
restoration of buildings or improvements on the Premises, Beneficiary
shall accelerate the Indebtedness, then and in such event, the
Beneficiary shall be entitled to apply all such insurance proceeds and
condemnation awards then held by it in reduction of the Indebtedness
and any excess held by it over the amount of Indebtedness then due
hereunder shall be returned to Trustor or any other party entitled
thereto without interest.

     16A. Acceleration of Indebtedness; Remedies.  When the
Indebtedness hereby secured shall become due, whether by acceleration
or otherwise, Beneficiary may:

     (a)  Either in person or by agent, with or without bringing any
action or proceeding, or by a receiver appointed by a court and
without regarding to the adequacy of its security, enter upon and take
possession of the Premises, or any part thereof, in its own name or in
the name of Trustee, and do any acts which it deems necessary or
desirable to preserve the value, marketability or rentability of the
Premises, or part thereof or interest therein, increase the income
therefrom or protect the security hereof and, with or without taking
possession of the Premises, sue for or otherwise collect the rents,
issues and profits thereof, including those past due and unpaid, and
apply the same, less costs and expenses of operation and collection,
including reasonable attorneys' fees, upon any indebtedness secured
hereby, all in such order as Beneficiary may determine.  The entering
upon and taking possession of the Premises, the collection of such
rents, issues and profits, and the application thereof as aforesaid
shall not cure or waive any default or notice of default hereunder or
invalidate any act done in response to such default or pursuant to
such notice of default and, notwithstanding the continuance in
possession of the Premises or the collection, receipt and application
of rents, issues or profits, Trustee or Beneficiary shall be entitled
to exercise every right provided for in any of the Loan Documents or
by law upon occurrence of any Event of Default, including the right to
exercise the power of sale;

     (b)  Commence an action to foreclose this Deed of Trust as a
mortgage, appoint a receiver, or specifically enforce any of the
covenants hereof;

     (c)  Conduct a nonjudicial foreclosure sale;

     (d)  Exercise any or all of the rights and remedies available to
a secured party under the California Uniform Commercial Code,
including, but not limited to:

          (i) Either personally or by means of a court appointed
     receiver, take possession of all or any of the Collateral
     and exclude therefrom Trustor and all others claiming under
     Trustor, and thereafter hold, store, use, operate, manage,
     maintain and control, make repairs, replacements,
     alterations, additions and improvements to and exercise all
     rights and powers of Trustor in respect to the Collateral or
     any part thereof.  In the event Beneficiary demands or
     attempts to take possession of the Collateral in the
     exercise of any rights under any of the Loan Documents,
     Trustor promises and agrees to promptly turn over and
     deliver complete possession thereof to Beneficiary;

          (ii)  Without notice to or demand upon Trustor, make
     such payments and do such acts as Beneficiary may deem
     necessary to protect its security interest in the
     Collateral, including, without limitation, paying,
     purchasing, contesting or compromising any encumbrance,
     charge or lien which is prior or superior to the security
     interest granted hereunder, and, in exercising any such
     powers or authority, to pay all expenses incurred in
     connection therewith;

          (iii) Require Trustor to assemble the Collateral or
     any portion thereof, at a place designated by Beneficiary
     and reasonably convenient to both parties, and Trustor shall
     promptly deliver such Collateral to Beneficiary, or an agent
     or representative designated by it.  In the event that any
     of the Collateral is moved by Trustor, Beneficiary, and its
     agents and representatives, shall have the right to enter
     upon any or all of Trustor's premises and property to
     exercise Beneficiary's rights hereunder; or

          (iv)  Sell, lease or otherwise dispose of the
     Collateral at public sale, with or without having the
     Collateral at the place of sale, and upon such terms and in
     such manner as Beneficiary may determine.  Beneficiary may
     be a purchaser at any such sale.  Unless the Collateral is
     perishable or threatens to decline speedily in value or is
     of a type customarily sold on a recognized market,
     Beneficiary shall give Trustor at least ten (10) calendar
     days' prior written notice of the time and place of any
     public sale of the Collateral or other intended disposition
     thereof.  Such notice may be sent to Trustor at the address
     set forth at the beginning of this Deed of Trust; and

     (e)  Deliver to Trustee a written declaration of default and
demand for sale, and a written notice of default and election to cause
Trustor's interest in the Premises to be sold, which notice Trustee or
Beneficiary shall cause to be duly filed for record in the Official
Records of the county in which the Premises is located.

     16B. Foreclosure By Power Of Sale.  Should Beneficiary elect to
foreclose by exercise of the power of sale contained in this Deed of
Trust, Beneficiary shall notify Trustee and shall deposit with Trustee
this Deed of Trust and the Note and such receipts and evidence of
expenditures made and secured hereby as Trustee may require.

     (a)  Upon receipt of such notice from Beneficiary, Trustee shall
cause to be recorded, published and delivered to Trustor such notice
of default and election to sell as may then be required by law and by
this Deed of Trust.  Trustee shall, after lapse of such time as may
then be required by law and after recordation of such notice of
default and after notice of sale has been given as may then be
required by law, sell the Premises at the time and place of sale fixed
by it in such notice of sale, either as a whole, or in separate lots
or parcels or items as Beneficiary shall deem expedient, and in such
order as it may determine, at public auction to the highest bidder for
cash in lawful money of the United States payable at the time of sale.
Trustee shall deliver to such purchaser or purchasers thereof its good
and sufficient deed or deeds conveying the property so sold, but
without any covenant or warranty, express or implied.  The recitals in
such deed of any matters of fact shall be conclusive proof of the
truthfulness thereof.  Any person, including, without limitation,
Trustor, Trustee or Beneficiary, may purchase at such sale and Trustor
hereby covenants to warrant and defend the title of such purchaser or
purchasers.

     (b)  After deducting all costs, fees and expenses of Trustee and
of this trust, including costs of evidence of title in connection with
sale, Trustee shall apply the proceeds of sale to payment of: all sums
expended under the terms hereof, not then repaid, with accrued
interest at the Note Rate; all other sums then secured hereby; and the
remainder, if any, to the person or persons legally entitled thereto.

     (c)  Trustee may postpone sale of all or any portion of the
Premises by public announcement at such time and place of sale, and
from time to time thereafter may postpone such sale by public
announcement at the time fixed by the preceding postponement or
subsequently noticed sale, and without further notice make such sale
at the time fixed by the last postponement, or may, in its discretion,
give a new notice of sale.

     (d)  The power of sale under this Deed of Trust shall not be
exhausted by any one or more sales (or attempts to sell) as to all or
any portion of the Premises remaining unsold, but shall continue
unimpaired until all of the Premises has been sold by exercise of the
power of sale herein contained and all indebtedness and obligations of
Trustor to Beneficiary under the Note, this Deed of Trust, and the
other Loan Documents have been paid in full.

     (e)  Trustor waives any rights it has to direct the order of sale
of any property at a foreclosure sale.

     16C. Appointment of Receiver.  If an Event of Default described
in Paragraph 15 of this Deed of Trust shall have occurred and be
continuing, Beneficiary, as a matter of right, and without regard to
the adequacy of the security of the then value of the Premises or the
interest of Trustor therein, shall have the right to apply upon ex
parte application to any court having jurisdiction to appoint a
receiver or receivers of the Premises and Trustor hereby irrevocably
consents to such appointment.  Any such receiver or receivers shall
have all the usual powers and duties of receivers in like or similar
cases and all the powers and duties of Beneficiary in case of entry as
provided in Paragraph 16A hereof and shall continue as such and
exercise all such powers until the date of confirmation of sale of the
Premises unless such receivership is sooner terminated.

     17.  Remedies Not Exclusive.  Trustee and Beneficiary, and each
of them, shall be entitled to enforce payment and performance of any
indebtedness or obligations secured hereby and to exercise all rights
and powers under this Deed of Trust or under any Loan Document or
other agreement or any laws now or hereafter in force, notwithstanding
some or all of such indebtedness and obligations secured hereby may
now or hereafter be otherwise secured, whether by mortgage, deed of
trust, pledge, lien, assignment or otherwise.  Neither the acceptance
of this Deed of Trust nor its enforcement, whether by court action or
pursuant to the power of sale or other powers herein contained, shall
prejudice or in any manner affect Trustee's or Beneficiary's right to
realize upon or enforce any other security now or hereafter held by
Trustee or Beneficiary, it being agreed that Trustee and Beneficiary,
and each of them, shall be entitled to enforce this Deed of Trust and
any other security now or hereafter held by Beneficiary or Trustee in
such order and manner as they or either of them may in their
reasonable discretion determine.  No remedy herein conferred upon or
reserved to Trustee or Beneficiary is intended to be exclusive of any
other remedy herein or by laws provided or permitted, but each shall
be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by
statute.  Every power or remedy given by any of the Loan Documents to
Trustee or Beneficiary, or to which either of them may be otherwise
entitled, may be exercised, concurrently or independently, from time
to time and as often as may be deemed expedient by Trustee or
Beneficiary, and either of them may pursue inconsistent remedies.
Trustor waives any and all rights of setoff it may have against
Beneficiary and Trustor specifically waives any rights of setoff it
may have as set forth in California Code of Civil Procedure 431.70.

     18.  Application of Proceeds.  Subject to the provisions of the
Cross-Collateralization Rider attached hereto as Exhibit B, the
proceeds of any sale made either under the power of sale hereby given
or under a judgment, order or decree made in any action to foreclose
or to enforce this Deed of Trust, shall be applied:

     (a)  first to the payment of (i) all costs and expenses of such
sale, including reasonable attorneys' fees, environmental site
assessors fees and costs, appraisers' fees and costs of procuring
title searches, title insurance policies and similar items and (ii)
all charges, expenses and advances incurred or made by Beneficiary in
order to protect the lien or estate created by this Deed of Trust or
the security afforded hereby including any expenses of entering,
taking possession of and operating the Premises;

     (b)  then to the payment of any other Indebtedness in such order
as Beneficiary may determine until the same have been paid in full;
and

     (c)  any balance thereof shall be paid to Trustor, or to
whosoever shall be legally entitled thereto, or as a court of
competent jurisdiction may direct.

     19.  Beneficiary's Right of Inspection.  Beneficiary shall, upon
reasonable notice to Trustor, have the right to inspect the Premises
at all reasonable times and access thereto shall be permitted for that
purpose.

     20.  Condemnation.  The Beneficiary may, at its option, in its
own name (a) appear or proceed in any condemnation proceeding, and (b)
make any compromise or settlement thereof, provided that so long as
the Trustor promptly prosecutes any compromise or settlement thereof,
the Trustor shall control any compromise or settlement proceeding with
the result thereof being subject to the Beneficiary's approval.  The
Trustor shall give the Beneficiary immediate notice of the initiation
of any condemnation proceeding, and a copy of every pleading, notice
and other items served in any condemnation proceeding.  Trustor hereby
assigns, transfers and sets over unto the Beneficiary the entire
proceeds of any award or any claim for damages for any of the Premises
taken or damaged under the power of eminent domain or by condemnation.
Beneficiary may elect to apply the proceeds of the award upon or in
reduction of the Indebtedness, whether due or not, or make said
proceeds available for restoration or rebuilding of the Premises.  In
the event that Beneficiary elects, in Beneficiary's sole and absolute
discretion, to make said proceeds available to reimburse Trustor for
the cost of the rebuilding or restoration of the Improvements, such
proceeds shall be made available in the manner and under the
conditions that Beneficiary may require.  In any event, the
Improvements shall be restored or rebuilt in accordance with plans and
specifications to be submitted to and approved by Beneficiary prior to
commencement of any building or restoration.  If the proceeds are made
available by Beneficiary to reimburse Trustor for the cost of said
rebuilding or restoration, any surplus which may remain out of said
award after payment of such cost of rebuilding or restoration shall at
the option of Beneficiary be applied on account of the Indebtedness or
be paid to any party entitled thereto.  No interest shall be allowed
to Trustor on the proceeds of any award held by the Beneficiary.

     21.  Release Upon Payment and Discharge of Trustor's Obligations.
Beneficiary shall release this Deed of Trust and the lien thereof by
proper instrument upon payment and discharge of all Indebtedness
including any prepayment premium provided for herein or in the Note
secured hereby.

     22.  Giving of Notice.  (a) All notices, demands, requests, and
other communications desired or required to be given hereunder
("Notices"), shall be in writing and shall be given by: (i) hand
delivery to the address for Notices; (ii) delivery by overnight
courier service to the address for Notices; or (iii) sending the same
by United States mail, postage prepaid, certified mail, return receipt
requested, addressed to the address for Notices.

     (b)  All Notices shall be deemed given and effective upon the
earlier to occur of: (i) the hand delivery of such Notice to the
address for Notices; (ii) one business day after the deposit of such
Notice with an overnight courier service by the time deadline for next
day delivery addressed to the address for Notices; or (iii) three
business days after depositing the Notice in the United States mail,
postage prepaid, as set forth in (a)(iii) above.  All Notices shall be
addressed to the following addresses:



       Trustor:     Bedford Property Investors, Inc.
                    270 Lafayette Circle
                    Lafayette, CA 94549
                    Attn:  Chief Financial Officer

  Beneficiary:      Security Life of Denver Insurance Company
                    c/o ING Investment Management LLC
                    5780 Powers Ferry Road, NW, Suite 300
                    Atlanta, Georgia, 30327-4349
                    Attention: Mortgage Loan Servicing Department

                              and

                    ING Investment Management LLC
                    5780 Powers Ferry Road, NW, Suite 300
                    Atlanta, Georgia, 30327-4349
                    Attention:  Real Estate Law Department

With a copy to:     Nyemaster, Goode, Voigts, West,
                    Hansell & O'Brien, P.C.
                    700 Walnut, Suite 1600
                    Des Moines, Iowa 50309

or to such other persons or at such other place as any party hereto
may by Notice designate as a place for service of Notice.  Provided,
that the "copy to" Notice to be given as set forth above is a courtesy
copy only; and a Notice given to such person is not sufficient to
effect giving a Notice to the principal party, nor does a failure to
give such a courtesy copy of a Notice constitute a failure to give
Notice to the principal party.

     23.  Waiver of Defense.  No action for the enforcement of the
lien or of any provision hereof shall be subject to any defense which
would not be good and available to the party interposing same in an
action at law or in equity upon the Note hereby secured.

     24.  Waiver of Statutory Rights.  Trustor shall not, and will
not, apply for or avail itself of any homestead, appraisement,
valuation, stay, extension or exemption laws, or any so-called
"Moratorium Laws", now existing or hereafter enacted, in order to
prevent or hinder the enforcement or foreclosure of this Deed of
Trust, but to the extent lawfully allowed hereby waives the benefit of
such laws.  Trustor, for itself and all who may claim through or under
it, waives any and all right to have the property and estates
comprising the Premises marshaled upon any foreclosure of the lien
hereof and agrees that any court having jurisdiction to foreclose such
lien may order the Premises sold as an entirety.  To the extent
permitted by law, Trustor does hereby expressly waive any and all
rights of redemption from sale under any order or decree of
foreclosure of this Deed of Trust on behalf of Trustor, the trust
estate and all persons beneficially interested therein and each and
every person, acquiring any interest in or title to the Premises
subsequent to the date of this Deed of Trust.  Trustor waives any set
off rights it may have against Beneficiary, including, but not limited
to, rights set forth in California Code of Civil Procedure Section
431.70.

     25.  Furnishing of Financial Statements to Beneficiary.  (a)
Trustor covenants and agrees that it will keep and maintain books and
records of account, or cause books and records of account to be kept
and maintained in which full, true and correct entries shall be made
of all dealings and transactions relative to the Premises and Trustor,
which books and records of account shall, at reasonable times during
business hours and on reasonable notice, be open to inspection by
Beneficiary and Beneficiary's accountants and other duly authorized
representatives.  Such books of record and account shall be kept and
maintained as follows:

          (i)  An annual operating statement on each property
     comprising the Premises shall be kept and maintained in
     accordance with a cash basis of accounting consistently
     applied; and

          (ii) All other financial information, including
     balance sheets, income statements and cash flow statements,
     shall be kept and maintained in accordance with generally
     accepted accounting principles consistently applied.

     (b)  Trustor covenants and agrees to furnish, or cause to be
furnished to Beneficiary, annually, within ninety (90) days following
the end of each fiscal year of Trustor a copy of a report of the
operations of the Premises, including a balance sheet and supporting
schedules and containing a detailed statement of income and expenses
and a current rent roll of the Premises.  Trustor shall simultaneously
deliver to Beneficiary a financial statement of Trustor, and each of
its general partners if Trustor is a partnership, prepared in
accordance with the accounting requirements set forth above, certified
by Trustor, or an officer, manager or a general partner of any
corporate, limited liability company or partnership Trustor.  Each
report or statement shall be certified as correct by the appropriate
party.

     (c)  If Trustor omits to deliver as required any report or
statement required by this Paragraph 25, and said omission is not
cured by Trustor within thirty (30) days after written notice of such
omission has been given by Beneficiary to Trustor, Beneficiary may
elect, in addition to exercising any remedy for an Event of Default as
provided for in this Deed of Trust, to make an audit of all books and
records of Trustor including its bank accounts which in any way
pertain to the Premises and to prepare the statement or statements
which Trustor failed to procure and deliver.  Such audit shall be made
and such statement or statements shall be prepared by an independent
certified public accountant to be selected by Beneficiary. Trustor
shall pay all reasonable expenses of the audit and other services,
which expenses shall be secured hereby as additional Indebtedness and
shall be immediately due and payable with interest thereon at the
Default Rate of interest as set forth in the Note and shall be secured
by this Deed of Trust.

     26.  Filing and Recording Fees.  Trustor will pay all filing,
registration or recording fees and all reasonable expenses incident to
the execution and acknowledgment of this Deed of Trust and all
federal, state, county and municipal taxes and other taxes, duties,
imposts, assessments and charges arising out of or in connection with
the execution and delivery of said Note and this Deed of Trust.

     27.  Business Purpose.  Trustor represents, covenants and agrees
that all of the proceeds of the Note secured by this Deed of Trust
will be used solely for business purposes and in furtherance of the
regular business affairs of Trustor.

     28.  Exculpatory.  The liability of the Trustor personally to pay
the Note or any interest that may accrue thereon, or any Indebtedness
or obligation accruing or arising hereunder is limited to the extent
set forth in the Note.

     29.  Security Agreement.  Trustor and Beneficiary agree that this
Deed of Trust shall constitute a security agreement within the meaning
of the UCC with respect to all sums on deposit with the Beneficiary
with respect to insurance proceeds or condemnation proceeds
("Deposits") and with respect to any personal property and fixtures
included in the definition herein of the word "Premises", which
property may not be deemed to form a part of the real estate described
in Exhibit "A" or may not constitute a "fixture" within the meaning of
the UCC, and all replacements of such property, substitutions and
additions thereto and the proceeds thereof, all such property being
sometimes hereinafter collectively referred to as the "Collateral",
and that a security interest in and to the Collateral and the Deposits
is hereby granted to Beneficiary and the Deposits and all of Trustor's
right, title and interest therein are hereby assigned to Beneficiary,
all to secure payment of the Indebtedness and to secure performance by
Trustor of the terms, covenants and provisions hereof.  Upon the
occurrence of an Event of Default under this Deed of Trust,
Beneficiary, pursuant to the appropriate provisions of the UCC, shall
have the option of proceeding with respect to the Collateral in
accordance with its rights and remedies with respect to the real
property, in which event the default provisions of the UCC shall not
apply.  The parties agree that, in the event Beneficiary shall elect
to proceed with respect to the Collateral separately from the real
property, ten (10) days' notice of the sale of the Collateral shall be
reasonable notice.  The reasonable expenses of retaking, holding,
preparing for sale, selling and the like incurred by Beneficiary shall
include, but not be limited to, reasonable attorneys' fees and legal
expenses incurred by Beneficiary.  Trustor agrees that, without the
written consent of Beneficiary, Trustor will not remove or permit to
be removed from the Premises any of the Collateral except that so long
as the Trustor is not in default hereunder, Trustor shall be permitted
to sell or otherwise dispose of the Collateral, when obsolete, worn
out, inadequate, unserviceable or unnecessary for use in or in the
ordinary course of business for the operation of the Premises, upon
replacing the same or substituting for the same other Collateral at
least equal in value to the initial value to that disposed of and in
such a manner so that said Collateral shall be subject to the security
interest created hereby, and so that the security interest of
Beneficiary shall be first in priority, it being expressly understood
and agreed that all replacements of the Collateral and any additions
to the Collateral shall be and become immediately subject to the
security interest of this Deed of Trust and covered hereby. Trustor
shall, from time to time, on request of Beneficiary, deliver to
Beneficiary an inventory of the Collateral in reasonable detail.
Trustor covenants and represents that all Collateral, and all
replacements thereof, substitutions therefor or additions thereto,
unless Beneficiary otherwise consents, now are and will be free and
clear of liens (other than the lien of taxes not yet due or payable),
encumbrances or security interests of others.  Trustor shall, upon
demand execute and deliver to Beneficiary such financing statements
and other documents in form satisfactory to Beneficiary, and will do
all such acts and things as Beneficiary may at anytime, or from time
to time, reasonably request or as may be necessary or appropriate to
establish and maintain a first perfected security interest in the
Deposits and Collateral, subject to no liens (other than the lien of
taxes not yet due or payable), encumbrances, or security interests of
others.

     This Deed of Trust also constitutes a financing statement for the
purpose of the UCC and shall constitute a "fixture filing" under such
statutes and shall be filed in the real estate records of the County
in which the Land is located.  For such purpose the name and address
of the debtor and the secured party are as set forth below:

     Name of Debtor:          Bedford Property Investors, Inc.

     Debtor's Mailing
      Address:                270 Lafayette Circle, Lafayette,
                              California 94549

     Debtor's Taxpayer
      Identification Number:  68-0306514




     Address of Property:     (1) 410 Allerton, South San Francisco, San
                              Mateo County, California;

                              (2) 301, 311 and 325 Grand Avenue,
                              South San Francisco, San Mateo County,
                              California;

                              (3) 901 Kaiser Road, Napa, Napa
                              County, California;

                              (4) 840-940 Auburn Court, Fremont,
                              Alameda County, California;

                              (5) 6500 Kaiser Drive, Fremont,
                              Alameda County, California; and

                              (6) 45713 and 47533 Westinghouse
                              Drive, Fremont, Alameda County,
                              California

     Name of Secured Party:   Security Life of Denver Insurance
                              Company

     Address of Secured
      Party:                  c/o ING Investment Management LLC
                              5780 Powers Ferry Road, NW, Suite 300
                              Atlanta, Georgia  30327-4349
                              Attention:  Real Estate Law Department

This financing statement covers the Collateral.  Some of the items or
types of property comprising the Collateral are or are to become
fixtures on the real property described in this Deed of Trust.
Trustor is the record owner of the real property described herein upon
which the foregoing fixtures and other items and types of property are
located.

     30.  Due on Sale or Further Encumbrance.  (a) If, without the
Beneficiary's prior written consent, (i) the Premises or any part
thereof or any interest in the Premises or the Trustor is sold or
conveyed; (ii) title to the Premises or any interest therein is
divested; (iii) the Premises or any ownership interest in the Trustor
is further encumbered or pledged; (iv) any lease which gives the
lessee any option to purchase the Premises or any part thereof is
entered into, or, (v) without limiting the generality of clause (i)
above, the ownership of shares of the Trustor, if a corporation, or of
any corporate general partner of Trustor, if a partnership, or the
general partnership interests in any partnership which is a general
partner of Trustor, or any membership interest in a Trustor which is a
limited liability company, or any beneficial or fiduciary interest in
any Trustor which is a trust or trustee is sold or conveyed (other
than stock in publicly traded REITs), the Beneficiary shall at its
sole discretion be entitled to accelerate the Indebtedness and declare
the then unpaid principal balance and all accrued interests and other
sums due and payable under the Note due and payable and exercise all
remedies available to Beneficiary under the Loan Documents.  The
Trustor understands that the present ownership of the Premises and
Improvements will be a material inducement to Beneficiary in the
making of the loan secured by this Deed of Trust.  Any consent by
Beneficiary to a change in ownership or to a change in the composition
of the Trustor may be conditioned upon payment of a transfer fee equal
to one percent (1%) of the then outstanding Indebtedness for
processing such request for consent, upon an increase in the rate of
interest on the unpaid balance of the Indebtedness to a then-current
market rate, and/or other terms and conditions as Beneficiary may
impose in its sole discretion.

     (b) Notwithstanding the foregoing subparagraph (a), Beneficiary
will permit one transfer of the Premises, provided: (i) the transferee
has a financial and credit standing and management expertise
acceptable to Beneficiary as equal to or greater than that of Trustor
at the time Beneficiary approved the loan to the Trustor; (ii)
assumption documents in form and substance satisfactory to Beneficiary
are executed by the transferee; (iii) Beneficiary is paid a transfer
fee equal to one percent (1%) of the then outstanding indebtedness and
Trustor reimburses Beneficiary all fees and expenses associated with
the transfer including legal fees; (iv) Beneficiary receives an
endorsement to the Beneficiary's title policy, in form and substance
acceptable to Beneficiary; and (v) at Beneficiary's option,
Beneficiary receives opinions of counsel, and Trustor and transferee
authorization documents in form and substance acceptable to
Beneficiary.  Further, Beneficiary, in its sole judgement and
discretion, may require individuals specifically named by Beneficiary
to deliver to Beneficiary an Environmental Indemnification Agreement
on Beneficiary's standard form.  The rights granted to Trustor in this
subparagraph (b) are personal to Trustor, shall be extinguished after
the exercise thereof, and shall not inure to the benefit of any
subsequent transferee.  Such transfer and assumption will not,
however, release the Trustor or any guarantors from any liability to
the Beneficiary without the prior written consent of Beneficiary,
which consent may be given or withheld in Beneficiary's sole
discretion, but if given, may be conditioned upon, without limitation,
the execution of new guaranties from principals of the transferee as
Beneficiary deems necessary, execution by the principals of the
transferee of Beneficiary's standard Environmental Indemnification
Agreement and such other requirements as Beneficiary may deem
appropriate in its discretion.



     31.  Environmental Matters; Notice; Indemnity.  Trustor covenants
and agrees as follows:

     (a)  For purposes of this Deed of Trust, the following
definitions shall apply:

          (i)  The term "Environmental Law" means and includes
     any federal, state or local law, statute, regulation or
     ordinance pertaining to health, industrial hygiene or the
     environmental or ecological conditions on, under or about
     the Premises, including without limitation each of the
     following (and their respective successor provisions):  the
     Comprehensive Environmental Response, Compensation and
     Liability Act of 1980, as amended, 42 U.S.C. sections 9601
     et seq. ("CERCLA"); the Resource Conservation and Recovery
     Act of 1976, as amended, 42 U.S.C. sections 6901 et seq.
     ("RCRA"); the Federal Hazardous Materials Transportation
     Act, as amended, 49 U.S.C. sections 1801 et seq.; the Toxic
     Substance Control Act, as amended, 15 U.S.C. sections 2601
     et seq.; the Clean Air Act, as amended, 42 U.S.C. sections
     1857 et seq.; the Federal Water Pollution Control Act, as
     amended, 33 U.S.C. sections 1251 et seq.; and the rules,
     regulations and ordinances of the U.S. Environmental
     Protection Agency and of all other federal, state, county
     and municipal agencies, boards, commissions and other
     governmental bodies and officers having jurisdiction over
     the Premises or the use or operation of the Premises.

          (ii) The term "Hazardous Substance" means and
     includes:  (1) those substances included within the
     definitions of "hazardous substances", "hazardous
     materials", "hazardous waste", "pollutants", "toxic
     substances" or "solid waste" in any Environmental Law; (2)
     those substances listed in the U.S. Department of
     Transportation Table or amendments thereto (49 CFR 172.101)
     or by the U.S. Environmental Protection Agency (or any
     successor agency) as hazardous substances (40 CFR Part 302
     and any amendments thereto); (3) those other substances,
     materials and wastes which are or become, regulated under
     any applicable federal, state or local law, regulation or
     ordinance or by any federal, state or local governmental
     agency, board, commission or other governmental body, or
     which are or become classified as hazardous or toxic by any
     such law, regulation or ordinance; and (4) any material,
     waste or substance which is any of the following: (A)
     asbestos; (B) polychlorinated biphenyl; (C) designated or
     listed as a "hazardous substance" pursuant to section 311 or
     section 307 of the Clean Water Act (33 U.S.C. sections 1251
     et seq.); (D) explosive; (E) radioactive; (F) a petroleum
     product; or (G) infectious waste.  Notwithstanding anything
     to the contrary herein, the term "Hazardous Substance" shall
     not include commercially sold products otherwise within the
     definition of the term "Hazardous Substance", but (X) which
     are used or disposed of by Trustor or used or sold by
     tenants of the Premises in the ordinary course of their
     respective businesses, (Y) the presence of which product is
     not prohibited by applicable Environmental Law, and (Z) the
     use and disposal of which are in all respects in accordance
     with applicable Environmental Law.

     (b)  To the current and actual knowledge of Trustor's officers,
Trustor, after reasonable inquiry, represents, warrants and covenants
that,

          (i)  Except in accordance with applicable law, no
     Hazardous Substances have been or shall be discharged,
     disbursed, released, stored, treated, generated, disposed
     of, or allowed to escape or migrate, or shall threaten to be
     injected, emptied, poured, leached, or spilled (collectively
     a "release") on or from the Premises.

          (ii) Except with respect to floor tile at the Parcels
     of the Premises located at 410 Allerton and at 301 Grand,
     and except in accordance with applicable law, no asbestos or
     asbestos-containing materials have been or will be
     installed, used, incorporated into, placed on, or disposed
     of on the Premises.

          (iii)  No polychlorinated biphenyls ("PCBs") are or
     will be located on or in the Premises, in the form of
     electrical transformers, fluorescent light fixtures with
     ballasts, cooling oils, or any other device.

          (iv) No underground storage tanks are or will be
     located on the Premises or were located on the Premises and
     subsequently removed or filled.

          (v)  No investigation, administrative order, consent
     order and agreement, litigation, settlement, lien or
     encumbrance with respect to Hazardous Substances is
     proposed, threatened in writing, anticipated or in existence
     with respect to the Premises.

          (vi) The Premises and Trustor's operations at the
     Premises are in compliance in all material respects with all
     applicable Environmental Laws including without limitation
     any, state and local statutes, laws and regulations.  No
     notice has been received by Trustor, or any subsidiary of
     Trustor, from any entity, government body, or individual
     claiming any violation of any law, regulation, ordinance or
     code, or requiring compliance with any law, regulation,
     ordinance or code, or demanding payment or contribution for
     environmental damage or injury to natural resources.  Copies
     of any such notices received subsequent to the date hereof
     shall be forwarded to Beneficiary within three (3) days of
     their receipt.

          (vii)  Except as set forth on the Phase I
     environmental studies for the properties, a copy of which
     have been provided to Beneficiary, the Trustor has no
     knowledge of the release or threat of release of any
     Hazardous Substances from any property adjoining or within
     one-half mile of the Premises.

          (viii)  No portion of the Premises is a wetland or
     other water of the United States subject to jurisdiction
     under Section 404 of the Clean Water Act (33 U.S.C.  1344)
     or any comparable state statute or local ordinance or
     regulation defining or protecting wetlands or other special
     aquatic areas.

          (ix) There are no concentrations of radon or other
     radioactive gases or materials in any buildings or
     structures on the Premises that exceed background ambient
     air levels.

          (x)  To the best of Trustor's knowledge, there have
     been no complaints of illness or sickness alleged to result
     from conditions inside any buildings or structures on the
     Premises.

     (c)  Trustor will give prompt written notice to Beneficiary of:

          (i)  any proceeding, known investigation or inquiry
     commenced by any governmental authority with respect to the
     presence of any Hazardous Substance on, under or about the
     Premises or the migration thereof to or from adjoining
     property;

          (ii) all claims made or threatened in writing, by any
     individual or entity against Trustor or the Premises
     relating to any loss or injury allegedly resulting from any
     Hazardous Substance;

          (iii) the discovery by Trustor of any occurrence or
     condition on any real property adjoining or in the vicinity
     of the Premises which might cause the Premises or any part
     thereof to be subject to any restriction on the ownership,
     occupancy, transferability or use of the Premises under any
     Environmental Law; and

          (iv) Trustor's discovery of any occurrence or
     condition on any real property adjoining or in the vicinity
     of the Premises that could cause the Premises or any part
     thereof to be classified as "border-zone property" under the
     provisions of California Health and Safety Code, Sections
     25220 et seq. or any regulation adopted in accordance
     therewith.

     (d)  Beneficiary shall have the right and privilege to: (i) join
in and participate in, as a party if it so elects, any one or more
legal proceedings or actions involving any Environmental Law and
initiated with respect to the Premises; and to (ii) have all
reasonable costs and expenses thereof (including without limitation
Beneficiary's reasonable attorneys' fees and costs) paid by Trustor.

     (e) If recommended by any environmental report, assessment or
audit of the Premises, Trustor shall establish and comply with an
operations and maintenance program with respect to the Premises, in
form and substance reasonably acceptable to Beneficiary, prepared by
an environmental consultant reasonably acceptable to Beneficiary,
which program shall address any asbestos containing material or lead
based paint that may now or in the future be detected at or on the
Premises.  Without limiting the generality of the preceding sentence,
Beneficiary may require (i) periodic notices or reports to Beneficiary
in form, substance and at such intervals as Beneficiary may specify,
(ii) an amendment to such operations and maintenance program to
address changing circumstances, laws or other matters, (iii) at
Beneficiary's sole expense, supplemental examination of the Premises
by consultants specified by Beneficiary, (iv) access to the Premises,
at reasonable times upon reasonable notice to Trustor, by Beneficiary,
its agents or servicer, to review and assess the environmental
condition of the Premises and Trustor's compliance with any operations
and maintenance program, and (v) in consultation with Trustor,
variation of the operations and maintenance program in response to the
reports provided by any such consultants.

     32.  Captions.  The captions or headings preceding the text of
the paragraphs or subparagraphs of this Deed of Trust are inserted
only for convenience of reference and shall not constitute a part of
this Deed of Trust, nor shall they in any way affect its meaning,
construction or effect.

     33.  No Waiver; Modifications in Writing.  No failure or delay on
the part of Beneficiary in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other
or further exercise thereof or the exercise of any other right, power
or remedy.  The remedies provided for herein are cumulative and are
not exclusive of any remedies that may be available to any party at
law or in equity or otherwise.  No amendment, modification,
supplement, termination or waiver of or to any provision of this Deed
of Trust, nor consent to any departure therefrom, shall be effective
unless the same shall be in writing and signed by or on behalf of the
party to be charged with the enforcement thereof.  Any amendment,
modification or supplement of or to any provision of this Deed of
Trust, any waiver of any provision of this Deed of Trust, and any
consent to any departure from the terms of any provision of this Deed
of Trust, shall be effective only in the specific instance and for the
specific purpose for which made or given.

     34.  Relationship.  Beneficiary is only a lender under the Loan
Documents, and nothing contained in this Deed of Trust or the other
Loan Documents and no action taken by the parties pursuant hereto
shall be deemed to constitute the Beneficiary and any other of the
parties to any of the Loan Documents a partnership, an association, a
joint venture or other entity, nor constitute Beneficiary as a
fiduciary for any of the parties.

     35.  Governing Law.  This Deed of Trust shall be governed by the
laws (excluding conflicts of laws rules) of California.

     36.  Time of Essence.  Time is of the essence in the performance
by the parties of this Deed of Trust.

     37.  Construction.  Trustor has been represented by its own
counsel in this transaction, and this Deed of Trust shall not be
construed more strongly against any party regardless of who was more
responsible for its preparation.

     38.  Gender; Number; Terms.  Words and phrases herein shall be
construed as in the singular or plural number and as masculine,
feminine or neuter gender, according to the context.  The use of the
words "herein," "hereof," "hereunder" and other similar compounds of
the word "here" shall refer to this entire Deed of Trust and not to
any particular section, paragraph or provision.  The term "person" and
words importing persons as used in this Deed of Trust shall include
firms, associations, partnerships (including limited partnerships),
joint ventures, trusts, corporations, limited liability companies, and
other legal entities, including public or governmental bodies,
agencies or instrumentalities, as well as natural persons.

     39.  Integration.  This Deed of Trust, together with the other
Loan Documents and the certain Environmental Indemnification Agreement
executed by Trustor, constitute the entire agreement between the
parties hereto pertaining to the subject matters hereof and thereof
and supersede all negotiations, preliminary agreements and all prior
or contemporaneous discussions and understandings of the parties
hereto in connection with the subject matters hereof and thereof.

     40.  Substitute Trustee.  If, for any reason, Beneficiary prefers
to appoint a substitute Trustee hereunder, Beneficiary may, from time
to time, by written instrument, appoint one or more substitute
Trustees, who shall succeed to all the estate, rights, powers, and
duties of the original Trustee named herein.  Such appointment may be
executed by anyone acting in a representative capacity, and such
appointment shall be conclusively presumed to have been executed with
appropriate authority.

     41.  Indemnification of Trustee.  Except for willful misconduct,
Trustee shall not be liable for any act or omission or error of
judgment.  Trustee may rely on any document believed by Trustee in
good faith to be genuine.  All money received by Trustee shall, until
used or applied as herein provided, be held in trust, but need not be
segregated (except to the extent required by law), and Trustee shall
not be liable for interest thereon.  Trustor hereby indemnifies
Trustee against all liability and expenses that Trustee may incur in
the performance of Trustee's duties hereunder.

     42.  General Indemnification.  (a) Trustor shall, at its sole
cost and expense, protect, defend, indemnify, release and hold
harmless the Indemnified Parties (defined below) from and against any
and all Losses (defined below) imposed upon or incurred by or asserted
against any Indemnified Parties and directly or indirectly arising out
of or in any way relating to any one or more of the following: (i) any
accident, injury to or death of persons or loss of or damage to
property occurring in, on or about the Premises or any part thereof or
on the adjoining sidewalks, curbs, adjacent property or adjacent
parking areas, streets or ways; (ii) any use, nonuse or condition in,
on or about the Premises or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets
or ways; (iii) performance of any labor or services or the furnishing
of any materials or other property in respect of the Premises or any
part thereof; (iv) any failure of the Premises to be in compliance in
all material respects with any applicable laws; (v) any and all
claims, demands or undertakings on its part to perform or discharge
any of the terms, covenants, or agreements contained in any Lease; or
(vi) the payment of any commission, charge or brokerage fee to anyone
which may be payable in connection with the funding of the Loan
evidenced by the Note and secured by this Deed of Trust.  Any amounts
payable to Beneficiary by reason of the application of this Paragraph
shall become immediately due and payable and shall bear interest at
the Default Rate (as defined in the Note) from the date loss or damage
is sustained by Beneficiary until paid.  The term "Losses" shall mean
any and all claims, suits, liabilities (including, without limitation,
strict liabilities), actions, proceedings, obligations, debts,
damages, losses, costs, expenses, fines, penalties, charges, fees,
judgments, awards, amounts paid in settlement of whatever kind or
nature (including but not limited to reasonable attorneys' fees and
other costs of defense).  The term "Indemnified Parties" shall mean
(i) Beneficiary, (ii) any prior owner or holder of the Note, (iii) any
servicer or prior servicer of the Loan, (iv) any participant or any
prior participant in any portion of the Loan, (v) any trustees,
custodians or other fiduciaries who hold or who have held a full or
partial interest in the Loan for the benefit of any participant or
other third party, (vi) any receiver or other fiduciary appointed in a
foreclosure or other collection proceeding, (vii) any officers,
directors, shareholders, partners, members, employees, agents,
servants, representatives, contractors, subcontractors, affiliates or
subsidiaries of any and all of the foregoing, and (viii) the heirs,
legal representatives, successors and assigns of any and all of the
foregoing (including, without limitation, any successors by merger,
consolidation or acquisition of all or a substantial portion of the
Indemnified Parties' assets and business), in all cases whether during
the term of the Loan or as part of or following a foreclosure of the
Loan.

     (b) Upon written request by any Indemnified Party, Trustor shall
defend such Indemnified Party (if requested by any Indemnified Party,
in the name of the Indemnified Party) by attorneys and other
professionals reasonably approved by the Indemnified Parties.
Notwithstanding the foregoing, any Indemnified Parties may, in their
sole discretion, engage their own attorneys and other professionals to
defend or assist them, and, at the option of the Indemnified Parties,
their attorneys shall control the resolution of any claim or
proceeding.  Upon demand, Trustor shall pay or, in the sole discretion
of the Indemnified Parties, reimburse, the Indemnified Parties for the
payment of reasonable fees and disbursements of attorneys, engineers,
environmental consultants, laboratories and other professionals in
connection therewith.

     (c) Trustor shall, at its sole cost and expense, protect, defend,
indemnify, release and hold harmless the Indemnified Parties from and
against any and all Losses imposed upon or incurred by or asserted
against any Indemnified Parties and directly or indirectly arising out
of or in any way relating to any tax on the making and/or recording of
this Deed of Trust, the Note or any of the other Loan Documents.

     43.  Miscellaneous.

     (a)  This Deed of Trust and all provisions hereof shall extend to
and be binding upon Trustor and its heirs, successors, grantees and
assigns, any subsequent owner or owners of the Premises and all
persons claiming under or through Trustor (but this clause shall not
be construed as constituting the consent by Beneficiary to the
transfer of any interest in the Premises), and the word "Trustor" when
used herein shall include any such person and all persons liable for
the payment of the Indebtedness or any part thereof, whether or not
such persons shall have executed said Note or this Deed of Trust.  The
word "Beneficiary", when used herein, shall include the successors and
assigns of Beneficiary, and the holder or holders, from time to time,
of the Note secured hereby.  In addition, in the event Trustor is a
privately held land trust or similar entity, the term "Trustor" as
used herein shall include the beneficiary or beneficiaries of such
land trust or similar entity.

     (b)  In the event one or more of the provisions contained in this
Deed of Trust or the Note secured hereby, or in any other security
documents given to secure the payment of the Note secured hereby,
shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall,
at the option of Beneficiary, not affect any other provision of this
Deed of Trust, and this Deed of Trust shall be construed as if such
invalid, illegal or unenforceable provision had never been contained
herein or therein.

     (c)  The Trustor will, from time to time, upon ten (10) business
days' prior written request from Beneficiary, make, execute,
acknowledge and deliver to Beneficiary such supplemental mortgages,
certificates and other documents, including without limitation UCC
financing statements, as may be necessary for better assuring and
confirming unto Beneficiary any of the Premises, or for more
particularly identifying and describing the Premises, or to preserve
or protect the priority of this Deed of Trust lien, and generally do
and perform such other acts and things and execute and deliver such
other instruments and documents as may reasonably be deemed necessary
or advisable by Beneficiary to carry out the intentions of this Deed
of Trust.

     (d)  Trustor shall not by act or omission permit any building or
other improvement on any premises not subject to the lien of this Deed
of Trust to rely on the Premises or any part thereof or any interest
therein to fulfill any municipal or governmental requirement, and
Trustor hereby assigns to Beneficiary any and all rights to give
consent for all or any portion of the Premises or any interest therein
to be so used. Similarly, no building or other Improvement on the
Premises shall rely on any premises not subject to the lien of this
Deed of Trust or any interest therein to fulfill any governmental or
municipal requirement. Trustor shall not by act or omission impair the
integrity of the Premises as a single zoning lot separate and apart
from all other premises.  Any act or omission by Trustor which would
result in a violation of any of the provisions of this paragraph shall
be void.

     (e)  Trustor will, from time to time, upon ten (10) business
days' prior written request by Beneficiary, execute, acknowledge and
deliver to Beneficiary, a certificate stating that this Deed of Trust
is unmodified and in full force and effect (or, if there have been
modifications, that this Deed of Trust is in full force and effect as
modified and setting forth such modifications) and stating the
principal amount secured hereby and the interest accrued to date on
such principal amount.  The estoppel certificate from Trustor shall
also state to the current and actual knowledge of Trustor whether any
offsets or defenses to the Indebtedness exist and if so shall identify
them.

     (f)  The Note secured hereby includes provisions for the
assessment of a Late Charge, as defined therein.  Said Late Charge
shall be secured hereby as Indebtedness, as that term is used herein.

     (g)  Beneficiary shall have the right and option to exercise
power of sale or to commence a civil action to foreclose this Deed of
Trust and to obtain a decree of foreclosure.  The failure to join any
tenant or tenants as party defendant or defendants in any such civil
action or the failure of any decree of foreclosure and sale to
foreclose their rights shall not be asserted by Trustor as a defense
in any civil action instituted to collect the Indebtedness, or any
part thereof, or any deficiency remaining unpaid after foreclosure and
sale of the Premises, any statute or rule of law at any time existing
to the contrary notwithstanding.

     (h)  At the option of Beneficiary, this Deed of Trust shall
become, subject and subordinate, in whole or in part (but not with
respect to priority of entitlement to insurance proceeds or any award
in condemnation) to any one or more, or to all, Leases upon the
execution by Beneficiary and recording or registration thereof, at any
time hereafter, in the Office of the Recorder in and for the county
wherein the Premises are situated, or such other office as determined
by Beneficiary, of a unilateral declaration to that effect.

     (i)  In the event that maturity of the Indebtedness is
accelerated by Beneficiary because of the occurrence of an Event of
Default hereunder and a tender of payment is made by or on behalf of
Trustor in the amount necessary to satisfy the Indebtedness at any
time prior to judicial confirmation or other conclusion if
confirmation is not required, of a foreclosure sale or sale under a
power of sale, then such tender shall constitute a prepayment under
the Note and shall, to the extent specified in the Note, require
payment of the prepayment premium provided for in the Note.  Trustor
has separately signed this Paragraph in accordance with Section
2954.10 of the California Civil Code.

                              BEDFORD PROPERTY INVESTORS, INC., a
                              Maryland corporation


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



     (j)  All agreements between Trustor and Beneficiary (including,
without limitation, those contained in this Deed of Trust and the
Note) are expressly limited so that in no event whatsoever shall the
amount paid or agreed to be paid to the Beneficiary exceed the highest
lawful rate of interest permissible under the laws of California.  If,
from any circumstances whatsoever, fulfillment of any provision hereof
or the Note or any other documents securing the Indebtedness at the
time performance of such provision shall be due, shall involve the
payment of interest exceeding the highest rate of interest permitted
by law which a court of competent jurisdiction may deem applicable
hereto, then, ipso facto, the obligation to be fulfilled shall be
reduced to the highest lawful rate of interest permissible under the
laws of California; and if for any reason whatsoever Beneficiary shall
ever receive as interest an amount which would be deemed unlawful,
such interest shall be applied to the payment of the last maturing
installment or installments of the principal Indebtedness (whether or
not then due and payable) and not to the payment of interest.

     (k)  Trustor covenants and agrees that it shall constitute an
Event of Default hereunder if any of the proceeds of the loan for
which the Note is given will be used, or were used, as the case may
be, for the purpose (whether immediate, incidental or ultimate) of
purchasing or "carrying" any "margin stock" as such terms are defined
in Regulation U of the Board of Governors of the Federal Reserve
System (12 CFR Part 221) or for the purpose of reducing or retiring
any indebtedness which was originally incurred for any such purpose.

     (l)  Trustor shall exert its best efforts to include a "no lien"
provision in any property management agreement hereafter entered into
by Trustor or its beneficiary with a property manager for the
Premises, whereby the property manager waives and releases any and all
mechanics' lien rights that he, or anyone claiming through or under
such manager, may have.  Such property management agreement containing
such "no lien" provision or a short form thereof shall, at
Beneficiary's request, be recorded in the office of the Recorder in
and for the County wherein the Premises is situated, or such other
office as reasonably requested by Beneficiary.

     (m)  At any time, or from time to time, without liability
therefor and without notice, upon written request of Beneficiary and
presentation of this Deed of Trust and the Note secured hereby for
enforcement, and without affecting the personal liability of any
person for payment of the indebtedness secured hereby or the effect of
this Deed of Trust upon the remainder of the Premises, Trustee may,
(a) reconvey any part of the Premises, (b) consent in writing to the
making of any map or plat thereof, (c) join in granting any easement
thereon, or (d) join in any extension agreement or any agreement
subordinating the lien or charge hereof.

     (n)  Without affecting the liability of any other person liable
for the payment of any obligation herein mentioned, and without
affecting the lien or charge of this Deed of Trust upon any portion of
the Premises not then or theretofore released as security for the full
amount of all unpaid obligations, Beneficiary may, from time to time
and without notice, (a) release any person so liable, (b) extend the
maturity or alter any of the terms of any such obligation, (c) grant
other indulgences, (d) release or reconvey, or cause to be released or
reconveyed at any time at Beneficiary's option any parcel, portion or
all of the Premises, (e) take or release any other or additional
security for any obligation herein mentioned, (f) make compositions or
other arrangements with debtors in relation thereto, or (g) advance
additional funds to protect the security of this Deed of Trust and pay
or discharge the obligations of Trustor hereunder or under the Loan
Documents, and all amounts so advanced, together with interest at the
Note Rate, shall be paid by Trustor to Beneficiary on demand and shall
be secured by this Deed of Trust.

     (o)  Trustee accepts this Trust when this Deed of Trust, duly
executed and acknowledged, is made a public record as provided by law.

     (p)  The Trustor hereby agrees the provisions of the California
Civil Code Section 2929.5 and California Code of Civil Procedure
Sections 564(c),(d) and (e), 726.5 and 736 shall apply.

     (q)  Trustor requests that copies of all notices of default and
notices of sale given by Trustee or Beneficiary in connection with
this Deed of Trust be sent to Trustor at the address stated in this
Deed of Trust.

     44.  Attorneys' Fees.  Trustor shall pay on demand all reasonable
costs and expenses incurred by Beneficiary or Trustee in enforcing or
protecting their rights and remedies hereunder, including, but not
limited to, reasonable attorneys' fees and legal expenses.

     45.  Cross-Collateralization Rider.   The terms and conditions of
the Cross-Collateralization Rider, attached hereto as Exhibit B, are
incorporated herein by this reference.

     46.  Multisite Real Estate Transaction.  Trustor acknowledges and
agrees that the lien of this Deed of Trust shall be absolute and
unconditional and shall not in any manner be affected or impaired by
any acts or omissions whatsoever of Beneficiary and without limiting
the generality of the foregoing, the lien hereof shall not be impaired
by any acceptance by the Beneficiary of any security for or guarantees
of any of the Indebtedness hereby secured, or by any failure, neglect
or omission on the part of Beneficiary to realize upon or protect any
Indebtedness hereby secured or any collateral security therefor
including the Other Security Documents.  The lien hereof shall not in
any manner be impaired or affected by any release (except as to the
property released), sale, pledge, surrender, compromise, settlement,
renewal, extension, indulgence, alteration, changing, modification or
disposition of any of the Indebtedness secured or of any of the
collateral security therefor, including the Other Security Documents,
and Beneficiary may at its discretion foreclose, exercise any power of
sale, or exercise any other remedy available to it under the Other
Security Documents without first exercising or enforcing any of its
rights and remedies hereunder.  Such exercise of Beneficiary's rights
and remedies under the Other Security Documents shall not in any
manner impair the Indebtedness hereby secured or the lien of this Deed
of Trust and any exercise of the rights or remedies of the Beneficiary
hereunder shall not impair the lien of the Other Security Documents or
any of Beneficiary's rights and remedies thereunder.  The Trustor
specifically consents and agrees that Beneficiary may exercise its
rights and remedies hereunder and under the Other Security Documents
separately or concurrently and in any order that it may deem
appropriate and waives any rights of subrogation.

     47.  Substitution of Collateral.  Notwithstanding anything to the
contrary set forth in this Deed of Trust, the Trustor may substitute a
parcel of improved real estate (a "Substitute Parcel") for any one of
the Parcels comprising the Premises, but only upon and subject to the
following terms and conditions:

(a)  General Requirements and Preliminary Review.

     (i)  There shall be no more than two substitutions of property
effected in any calendar year (collectively with respect to the
Premises and the property located in Arizona and described as the
"Premises" in the Other Security Documents, referred to herein as the
"Arizona Property"); and there shall be no more than three
substitutions of property during the term of the Note (collectively
with respect to the Premises and the Arizona Property).

     (ii) The Substitute Parcel shall be located within the
continental United States.

     (iii) In the event that at any time Trustor desires to arrange
for a substitution, Trustor shall submit to Beneficiary in writing a
request (the "Request") to substitute property, which shall identify
with particularity the Parcel of the Premises to which the Request
relates (the "Exchange Parcel") and the property proposed as the
Substitute Parcel.  Within ten (10) business days after Beneficiary's
actual receipt of the Request, Beneficiary shall determine, in its
sole and absolute discretion, whether the proposed Substitute Parcel
appears to be acceptable to replace the Exchange Parcel, and
Beneficiary shall notify Trustor of such initial determination (the
"Preliminary Response").  Items such as location, occupancy, lease
term, rollover, tenant exposure, tenant's credit, each will be
reviewed by Lender.  In the event the Preliminary Response is not
given within such ten-business-day period, it shall be deemed a
determination that the proposed Substitute Parcel is not acceptable.
If in the Beneficiary's sole and absolute discretion it is determined
that the proposed Substitute Parcel appears to be acceptable, then
Beneficiary, through Newmark Realty Capital, Inc. or other servicing
agent, will further process the Trustor's Request as described herein.
If the Request is finally approved as provided for herein, the
Substitute Parcel shall be exchanged for the Exchange Parcel as
provided below; and the effective date of such substitution is
referred to herein as the "Substitution Date".

(b)  Conditions to Final Approval.

     (i)  Prior to Beneficiary's final approval of any Substitute
Parcel ("Final Approval"), the Beneficiary shall have received from
the Trustor, at Trustor's sole cost and expense, such agreements,
instruments, documents and other materials as Beneficiary reasonably
deems appropriate, including without limitation, modifications of the
Deed of Trust and other Loan Documents and of the Other Security
Documents, proof of adequate insurance, tax and insurance escrows, an
assignment of leases and rents, environmental indemnities, title
insurance policies and endorsements, proof of compliance with
governmental regulations, Subordination, Non-Disturbance and
Attornment Agreements and/or estoppel agreements, and confirmation of
recourse provisions and exculpation of Trustor, all of which shall be
in form and substance satisfactory to Beneficiary in its sole
discretion.

     (ii) Prior to Final Approval and at the Trustor's sole cost and
expense, the Beneficiary shall have received and approved, in its sole
and absolute discretion, all additional due diligence materials in any
way relating to the Substitute Parcel, including but not limited to,
an appraisal, a hazardous substance report, a survey, and an
engineer's report, all as may be required by Beneficiary in its sole
discretion.

     (iii) The appraised fair market "As Is" value of the Substitute
Parcel shall be equal to or greater than both the appraised fair
market value, or gross sales proceeds, as the case may be, of the
Exchange Parcel as of that same time, and the original appraised value
of the Exchange Parcel as set forth in the appraisal delivered to
Beneficiary in connection with the closing of the loan evidenced by
the Note. The fair market "As Is" value of the Substitute Parcel and
Exchange Parcel shall be determined by a firm of appraisers selected
by Newmark Realty Capital, Inc. or other designee of Beneficiary and
approved by the Beneficiary, and based on an appraisal, dated not more
than ninety (90) days prior to the Substitution Date, satisfactory to
the Beneficiary.  All costs of such appraisals shall be paid by the
Trustor on or prior to the Substitution Date.

     (iv) Prior to the Substitution Date, Beneficiary shall have
received (aa) a confirmation of all Loan Documents and Other Security
Documents executed by the Trustor and a consent to such substitution
by any guarantors of any recourse obligations of Trustor, and (bb)
such other instruments and agreements and such certificates and
opinions of counsel in connection with such substitution as
Beneficiary may reasonably request, in form and substance satisfactory
to the Beneficiary.

     (v)  At the time of Final Approval and as of the Substitution
Date, the actual net operating income relating to the Substitute
Parcel (based upon financial results for the trailing twelve-month
period, or such shorter period as Beneficiary reasonably deems
appropriate, for any Substitute Parcel the business operated on which
has been open for less than one year) shall equal or exceed the actual
net operating income relating to the Exchange Parcel (based upon
financial results for the trailing twelve-month period, or such
shorter period as Beneficiary reasonably deems appropriate, for any
Exchange Parcel operated for less than one year).

(c)  Closing Requirements and Conditions.

     (i)  As of the Substitution Date, all agreements, documents and
instruments requested by Beneficiary to perfect the liens and security
interests in the Substitute Parcel shall have been recorded,
registered and filed (as applicable) in such manner as may be required
by law to create a valid, perfected liens and security interest with
respect to the Substitute Parcel and the personal property related
thereto.

     (ii) As of the Substitution Date, the Substitute Parcel shall
have been completed in a good and workmanlike manner, shall be lien-
free and paid for in full, and, shall be in compliance, in all
material respects, with all applicable governmental requirements.

     (iii) As of the Substitution Date, the Trustor shall have good
and marketable title to the Substitute Parcel and good and valid title
to any personal property located thereon or used in connection
therewith, in each case satisfactory to the Beneficiary.

     (iv) As of the Substitution Date, the liens created in respect of
the Substitute Parcel and personal property related thereto shall be
first liens on the Substitute Parcel and first priority security
interests in the personal property related thereto, subject only to
such exceptions as Beneficiary shall approve in its sole and absolute
discretion.

     (v)  As of the Substitution Date, no default or Event of Default
shall have occurred and be continuing hereunder or under any of the
other Loan Documents or under any of the Other Security Documents.

     (vi) As of the Substitution Date, Beneficiary shall be satisfied
that no material adverse change in the financial condition, operations
or prospects of Trustor has occurred after the date hereof.

     (vii) As of the Substitution Date, the Trustor shall have paid or
reimbursed Beneficiary for all reasonable out-of-pocket costs and
expenses incurred in connection with any such substitution and the
reasonable out-of-pocket fees and expenses incurred by Beneficiary and
its servicer in connection therewith.  Without limiting the generality
of the foregoing, the Trustor shall, in connection with, and as a
condition to, each substitution, pay the reasonable fees and expenses
of Beneficiary's counsel, the reasonable fees and expenses of
Beneficiary's engineers, appraisers, construction consultants,
insurance consultants and other due diligence consultants and
contractors, recording charges, title insurance charges, and stamp
and/or mortgage or similar taxes, transfer taxes.

     (viii) On or before the Substitution Date, Trustor shall pay a
fee to Beneficiary equal to the greater of $50,000 or one percent
(1.0%) of the Exchange Parcel's original Principal Allocation as set
forth in Paragraph 48 hereof.

(d)  Substitution.

     (i)  Upon compliance with all of the foregoing, including without
limitation due issuance of a title insurance policy and endorsements
satisfactory to Beneficiary, the Exchange Parcel shall be released
from this Deed of Trust and the other Loan Documents, and the
Substitute Parcel shall be substituted therefor and shall be
thereafter included as a portion of the Premises.

     (ii) Upon substitution of the Substitute Parcel, Beneficiary
shall reallocate and redetermine the Principal Allocations, Allocation
Percentages and Release Factors for purposes of Paragraph 48 hereof,
and shall notify Trustor of such reallocations and redeterminations.

     48.  Partial Release.  (a) The parcels of property comprising the
Premises ("Parcels") are separately described in Exhibit "A" attached
hereto as Parcels I through VI, and any of such Parcels may be
individually released from this Deed of Trust upon satisfaction of the
conditions set forth herein (adjusted to reflect partial prepayment as
permitted by this Paragraph), including without limitation payment to
Beneficiary of an amount determined in accordance with this Paragraph
(the "Release Amount") together with the applicable Prepayment
Premium, and the costs and expenses associated with such release.  For
purposes of making a determination of the manner in which Parcels I
through VI may be released, the original principal amount of the Note
has been allocated among Parcels I through VI as follows:

                    Principal           Allocation     Release
Parcels             Allocation          Percentage     Factor

   I*               $ 2,315,000            7.5%         1.00
  II*               $ 2,630,000            3.1%         1.15
 III*               $ 3,955,000           12.8%         1.15
  IV*               $ 4,820,000           15.6%         1.15
   V*               $ 3,925,000           12.7%         1.00
  VI*               $ 5,770,000           18.7%         1.00

     Total          $23,415,000

[* Addresses of the Parcels are as follows:  (I)  410 Allerton, South
San Francisco, San Mateo County, California;  (II)  301, 311 and 325
Grand Avenue, South San Francisco, San Mateo County, California;
(III)  901 Kaiser Road, Napa, Napa County, California;  (IV)  840-940
Auburn Court, Freemont, Alameda County, California;  (V)  6500 Kaiser
Drive, Freemont, Alameda County, California;  (VI)  45713 and 47533
Westinghouse Drive, Fremont, Alameda County, California.]

For purposes of the release of any Parcel, the Principal Allocation
for such Parcel is also set forth in the above table as a percentage
of the aggregate of the original principal balance of the Note and of
the Other Note (such aggregate being $30,890,000), which percentage is
set forth above as the "Allocation Percentage".  Further, the "Release
Factor" in the above table is the multiplier to determine the Release
Amount for the specific Parcel.

  (b)    The Release Amount for any particular Parcel shall be the
amount which is equal to the value obtained by multiplying (i) the
Allocation Percentage of the Parcel to be released, (ii) times the
aggregate outstanding principal balance of the Note and the Other Note
as of the date such Parcel is to be released (the "Release Date"),
(iii) times the applicable Release Factor.  For example, assume that
Parcel I were requested to be released after the first Loan Year
(twelve months of principal and interest payments).  After the first
Loan Year, assume the outstanding aggregate principal would be
$30,479,191 (assuming a LIBOR of 6.5%).  The amount necessary, then,
to have Parcel I released would be the Allocation Percentage for
Parcel I as set forth in subparagraph (a) above applied to the total
aggregate outstanding principal balance of the Note and the Other
Note, times the Release Factor of 1.00.  In the example, therefore,
the Release Amount would be equal to the product of 7.5% (the
Allocation Percentage of Parcel I) and $30,479,191, times 1.00; the
Release Amount being $2,285,939.

  (c)  At such time as Trustor desires to have any of Parcels I
through VI released from this Deed of Trust, Trustor shall deliver to
Beneficiary a request therefor in writing (the "Release Request")
which shall designate the specific Parcel requested to be released and
the anticipated date of such release, which shall be on a regularly
scheduled installment payment due under the Note and which shall be
not less than thirty days after the date such Release Request is
given.  Within ten business days after receipt of such Release
Request, Beneficiary shall inform Trustor of the Release Amount which
will be necessary to obtain such release, determined in accordance
with the foregoing subparagraphs (a) and (b).

  (d)  Without limiting requirements set forth elsewhere herein, in
no event will any Parcel be released except upon compliance with the
following requirements, and a Release Request shall be deemed not to
have been made if compliance has not been attained:

    (i)  As of the date of the Release Request and as of
  the date of the release, no Event of Default shall have occurred
  and be continuing under any of the Loan Documents or the Other
  Security Documents (as defined in Exhibit B hereto), and no event
  shall have occurred which with the passage of time or the giving
  of notice, or both, shall be or become an Event of Default;

    (ii) As of the date of the Release Request and as of
  the date of the release, all of the principal and interest
  installment payments due under the Note and the Other Note shall
  have been paid when due or, if not, otherwise accepted by
  Beneficiary as having been duly made.

  (e)  In addition to the Release Amount for the Parcel to be
released, Trustor shall make a payment to Beneficiary equal to the
Prepayment Premium, calculated as set forth in the Note, with respect
to the amount of the Release Amount.

  (f)    The release of any of Parcels I through VI hereunder
shall be subject to satisfaction of the following conditions:

    (i)  Beneficiary shall receive an endorsement to
  its loan title policy insuring that the remaining Parcels
  have access to the same publicly dedicated streets as prior
  to the release and amending the legal description to include
  only the remaining Parcels;

    (ii) Trustor shall have created easements for
  utilities, signage, drainage, parking, ingress and egress
  and other appropriate purposes in, on and over the released
  Parcel for the benefit of the remaining Parcels to the
  extent required by Beneficiary, and such easements shall be
  insured, as appurtenances in Beneficiary's loan policy via
  the endorsement required in clause (i) above.  The required
  easements shall include, without limitation, parking
  sufficient to meet all tenant lease requirements for tenants
  of the remaining Parcels.

  (g)  Upon receipt of the Release Amount for the Parcel to be
released, receipt by Beneficiary of the applicable Prepayment Premium,
payment by Trustor of all associated costs and expenses, and full
compliance with the terms of this Paragraph, Beneficiary shall release
the Parcel to which the Release Request related, and Beneficiary shall
apply the Release Amount so received toward the outstanding principal
of the Indebtedness, allocated to the Note or the Other Note as shall
be determined in Beneficiary's sole and absolute discretion.  All
payments shall be by wire transfer.

  (h)    Trustor concurrently with the release of any Parcel or
Parcels and as a condition thereof, shall pay to Beneficiary the
reasonable processing fee therefor as determined by Beneficiary, and
all reasonable costs, fees and expenses incurred or to be incurred by
Beneficiary and associated with or arising out of the release
including, without limitation, reasonable attorney fees and expenses.
Trustor shall pay all other reasonable costs and expenses associated
with or made necessary in respect of the release of any or all of the
Parcels, and Beneficiary shall bear no expense with respect thereto.

  (i)    Upon such application to the principal balance of the
Note or the Other Note (or both), and also in the event the principal
portion of the Note or the Other Note is otherwise reduced except by
application of the regularly scheduled installment payments under the
Note or the Other Note, Beneficiary shall thereupon revise the
Principal Allocation amounts with respect to the remaining Parcels,
and with respect to the Parcels of the Premises as those terms are
defined in the Other Security Documents, and shall reassign Allocation
Percentages and Release Factors in accordance with such reallocation
of the principal.  Such reallocation of amounts, percentages, and
factors shall be established by Beneficiary in its sole and absolute
discretion, provided only that the reallocated amount of the Principal
Allocation for any Parcel shall not exceed the initial Principal
Allocation for any Parcel established as set forth in subparagraph (a)
above.  Beneficiary shall inform Trustor of such reallocation within
thirty (30) days after such determination.

  THE PARTIES HERETO, AFTER CONSULTING OR HAVING HAD THE
OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN ANY
LITIGATION BASED ON OR ARISING OUT OF THIS AGREEMENT OR INSTRUMENT, OR
ANY RELATED INSTRUMENT OR AGREEMENT, OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS,
WHETHER ORAL OR WRITTEN, OR ACTION OF ANY PARTY HERETO.  NO PARTY
SHALL SEEK TO CONSOLIDATE BY COUNTERCLAIM OR OTHERWISE, ANY SUCH
ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.  THESE PROVISIONS
SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY ANY PARTY HERETO EXCEPT BY A WRITTEN INSTRUMENT
EXECUTED BY ALL PARTIES.

IMPORTANT:  READ BEFORE SIGNING.  THE TERMS OF THIS AGREEMENT SHOULD
BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE.
TRUSTOR ACKNOWLEDGES AND AGREES THAT THERE ARE NO OTHER TERMS OR ORAL
PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT AND NO SUCH OTHER
TERMS AND PROVISIONS MAY BE LEGALLY ENFORCED.  YOU MAY CHANGE THE
TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.

  Trustor acknowledges receipt of a copy of this instrument at the
time of execution hereof.

  IN WITNESS WHEREOF, the Trustor has executed this instrument the
day and year first above written.

                   BEDFORD PROPERTY INVESTORS, INC., a
                   Maryland corporation


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



STATE OF CALIFORNIA          )
              )SS.
COUNTY OF _______________)

  On ___________________, 2000, before me, __________________
personally appeared Hanh Kihara, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that she
executed the same in her authorized capacity, and that by her
signature on the instrument the person, or the entity upon behalf of
which person acted, executed the instrument.

  Witness my hand and official seal.

                        ____________________________
                        Notary

                        (Seal)

<PAGE>
                            EXHIBIT A
                        LEGAL DESCRIPTION



Parcel I - 410 Allerton, South San Francisco, San Mateo County,
California;

Parcel II - 301, 311 and 325 Grand Avenue, South San Francisco, San
Mateo County, California;

Parcel III - 901 Kaiser Road, Napa, Napa County, California;

Parcel IV - 840-940 Auburn Court, Fremont, Alameda County, California;

Parcel V - 6500 Kaiser Drive, Fremont, Alameda County, California; and

Parcel VI - 45713 and 47533 Westinghouse Drive, Fremont, Alameda
County, California

<PAGE>
                            EXHIBIT B
                  CROSS-COLLATERALIZATION RIDER

  Trustor and Beneficiary are Maker and Payee, respectively, under
the following instruments, each of which is dated as of this same date
(together, the "Instruments"):

  1.     Promissory Note in the amount of $23,415,000 (the
         "Note");

  2.     Promissory Note in the amount of $7,475,000 (the "Other
         Note");

  The Note is secured by (i) this Deed of Trust; (ii) an Assignment
of Rents and Leases, and (iii) a Security Agreement (collectively, the
"Security Documents").

  The Other Note is secured by, among other things, the following
documents, each dated as of this same date and relating to certain
property located at (1) 4546 South 35th Street, Phoenix, Maricopa
County, Arizona; (2) 2601 Broadway, Tempe, Maricopa County, Arizona;
(3) 3015, 3101, 3111, 3121 and 3131 South Park Drive, Tempe, Maricopa
County, Arizona, 2307 & 2315 West Fairmont Drive, Tempe, Maricopa
County, Arizona, 3010,3110 & 3120 South Potter Road, Tempe, Maricopa
County, Arizona: (i) a Deed of Trust, Security Agreement, Financing
Statement and Fixture Filing, (ii) an Assignment of Rents and Leases,
and (iii) a Security Agreement (collectively, the "Other Security
Documents").

  In addition to securing the obligations described in the Note,
this Deed of Trust shall also secure the Other Note and the
obligations secured by the Other Security Documents.

  An Event of Default under the Note or under any of the Security
Documents shall constitute an Event of Default under the Other Note
and the Other Security Documents.  An Event of Default under the Other
Note or the Other Security Documents shall constitute an Event of
Default under the Note and the Security Documents.

  Trustor waives all rights to have all or part of the Premises or
the property described in the Other Security Documents marshalled upon
any foreclosure of the Security Documents or the Other Security
Documents.  Beneficiary shall have the right to sell, and any court in
which foreclosure proceedings may be brought shall have the right to
order a sale of the Premises or the property described in the Other
Security Documents as a whole or in separate parcels, in any order
that Beneficiary may designate.  Trustor makes this waiver for itself,
for all persons and entities claiming through or under Trustor and for
all persons and entities who may acquire a lien on all or any part of
the Premises or the property described in the Other Security
Documents, or on any interest therein.








                         Instrument Prepared By And
                         When Recorded Return To:
                         Nyemaster, Goode, Voigts, West,
                          Hansell & O'Brien, P.C.
                         700 Walnut, Suite 1600
                         Des Moines, Iowa 50309
                         Attention: Bradford L. Austin

Bedford (CA)
19806.311

                  ASSIGNMENT OF RENTS AND LEASES

  THIS ASSIGNMENT OF RENTS AND LEASES ("Assignment") is made and
entered into as of July 27, 2000, by BEDFORD PROPERTY INVESTORS, INC.,
a Maryland corporation ("Assignor"), with the address of 270 Lafayette
Circle, Lafayette, California 94549, for the benefit of SECURITY LIFE
OF DENVER INSURANCE COMPANY, a Colorado corporation ("Assignee"), with
the address of c/o ING Investment Management LLC, 5780 Powers Ferry
Road, NW, Suite 300, Atlanta, Georgia 30327-4349.

                       W I T N E S S E T H:

  WHEREAS, Assignor has executed and delivered to Assignee
Assignor's Promissory Note dated on or about this same date in the
original principal amount of TWENTY-THREE MILLION FOUR HUNDRED FIFTEEN
THOUSAND AND NO/100 DOLLARS ($23,415,000) (the "Note"), performance of
which is secured, among other things, by a Deed of Trust, Security
Agreement, Financing Statement and Fixture Filing (the "Deed of
Trust"), which Deed of Trust encumbers certain real estate described
in Exhibit "A", attached hereto and hereby made a part hereof, and
improvements thereon (together, the "Premises"); and

  WHEREAS, Assignor has executed and delivered to Assignee the
Other Note (as defined in Exhibit "B" hereto) and the Other Security
Documents (as defined in Exhibit "B" hereto); and

  WHEREAS, as a condition to Assignee's obligation to make the loan
evidenced by the Note and secured by the Deed of Trust (and any
extensions and/or modifications thereof) and made pursuant to or in
connection with and secured by other documents, including, but not
limited to, a Security Agreement and financing statements naming
Assignor as debtor and Assignee as secured party (this Assignment, the
Note, the Deed of Trust, the Security Agreement and such other
documents are sometimes hereinafter collectively referred to as the
"Loan Documents"), Assignor has agreed to absolutely and uncon-

ditionally assign to Assignee all of Assignor's rights under and title
to various leases affecting the Premises, including Assignor's rights
in and title to the rents therefrom, subject only to the terms and
conditions herein set forth.

  NOW THEREFORE, in consideration of the foregoing recitals and
other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, and intending to be legally bound,
Assignor hereby agrees as follows:

  1.     Assignment of Leases.  Assignor hereby presently assigns,
transfers, grants and conveys unto Assignee, its successors and
assigns, all leasehold estates of Assignor, as lessor, and all right,
title and interest of Assignor in, to and under all existing and
future leases, subleases, license agreements, concessions, tenancies
and other use or occupancy agreements, whether oral or written,
covering or affecting any or all of the Premises and all agreements
for any use of, all or any part of the Premises, the buildings,
fixtures and other improvements located thereon ("Improvements"), and
all extensions, renewals and guaranties thereof and all amendments,
and supplements thereto (collectively, the "Leases"), including
without limitation the following:

  (a)  any and all rents, issues, profits, royalties, revenues,
income, receipts, contract rights, accounts receivable, general
intangibles, proceeds and other amounts now or hereafter becoming due
to Assignor arising in connection with the ownership, use or operation
of the Premises, including without limitation those arising in
connection with or under the Leases (whether due for the letting of
space, for services, materials or installations supplied by Assignor
or for any other reason whatsoever), all insurance, tax and other
contributions, insurance proceeds, condemnation awards, damages
following defaults by tenants under the Leases ("Tenants"), cash or
securities deposited by Tenants to secure performance of their
obligations under the Leases, and all other extraordinary receipts,
and all proceeds thereof, both cash and non-cash (all of the foregoing
being hereinafter collectively called the "Rents") and all rights to
direct the payment of, make claim for, collect, receive and receipt
for the Rents;

  (b)  all claims, rights, privileges and remedies on the part of
Assignor, whether arising under the Leases or by statute or at law or
in equity or otherwise, arising out of or in connection with any
failure by any Tenant to pay the Rents or to perform any of its other
obligations under its Lease;

  (c)  all rights, powers and privileges of Assignor to exercise
any election or option or to give or receive any notice, consent,
waiver or approval under or with respect to the Leases; and

  (d)  all other claims, rights, powers, privileges and remedies of
Assignor under or with respect to the Leases, including without
limitation the right, power and privilege (but not the obligation) to
do any and all acts, matters and other things that Assignor is
entitled to do thereunder or with respect thereto.

    2.   Purpose of Assignment; Security.  This Assignment is made
for the purpose of securing Assignor's full and faithful (a) payment
of the indebtedness (including any extensions or renewals thereof)
evidenced by the Note and the Other Note, (b) payment of all other
sums with interest thereon becoming due and payable to Assignee under
the provisions of the Deed of Trust or any other Loan Documents, and
the Other Security Documents, and (c) performance and discharge of
each and every term, covenant and condition contained in the Note,
Deed of Trust, Security Agreement or any of the other Loan Documents,
and the Other Security Documents.

    3.   Assignor's Representations, Warranties and Covenants.
Assignor represents, warrants, covenants and agrees with Assignee as
follows:

    (a)  That the sole ownership of the entire lessor's interest in
the Leases and the Rents is, and as to future Leases shall be, vested
in Assignor, and that Assignor has not, and shall not, perform any
acts or execute any other instruments which might prevent Assignee
from exercising its rights in any material respect under any of the
terms, covenants and conditions of this Assignment.

    (b)  That the Leases are and shall be valid and enforceable
against the respective lessees thereunder in accordance with their
terms and, except as otherwise disclosed in writing to Lender, have
not been altered, modified, amended, terminated, cancelled, renewed or
surrendered nor have any Rents thereunder been collected more than one
month in advance nor have any of the terms and conditions thereof been
waived in any manner whatsoever except as approved in writing by
Assignee or as permitted in the Deed of Trust.

    (c)  That none of the Leases entered into prior to the date
hereof, unless such Lease is by its express terms subordinated to the
Deed of Trust, shall be altered, modified, amended, terminated,
cancelled, extended, renewed or surrendered, nor any term or condition
thereof waived, nor shall Assignor consent to any assignment or sub-

letting by any lessee thereunder without the prior written approval of
Assignee, which shall not be unreasonably withheld.  Notwithstanding
the above, in no event shall any Lease for which Assignee has executed
a subordination, non-disturbance and attornment agreement be altered,
modified, amended, terminated, cancelled, extended, renewed or
surrendered, nor any term of condition thereof waived, nor shall
Assignor consent to any assignment or subletting by any lessee
thereunder, without the prior written approval of Assignee, which
shall not be unreasonably withheld.  Under no Lease will any Rents be
abated or collected more than one month in advance.

    (d)  That, to Assignor's current and actual knowledge, there are
no defaults now existing under any of the Leases and there exists no
state of facts which, with the giving of notice or lapse of time or
both, would constitute a default under any of the Leases.

    (e)  That Assignor shall give prompt notice to Assignee of any
written notice received by Assignor claiming that a default has
occurred under any of the Leases on the part of the Assignor, together
with a complete copy of any such notice.

    (f)  That Assignor will not permit any Lease to become
subordinate to any lien other than the lien of the Deed of Trust.

    (g)  That there shall be no merger of the Leases, or any of them,
by reason of the fact that the same person may acquire or hold
directly or indirectly the Leases, or any of them, as well as the fee
estate in the Premises or any interest in such fee estate.

    4.   Absolute Assignment/License to Collect Rents.  This
Assignment is entered into for the purpose of absolutely assigning the
Leases and the Rents to Assignee as additional collateral for the loan
evidenced by the Note and such Assignment is choate on the date
hereof.  Notwithstanding the foregoing, so long as no Event of
Default, as hereinafter defined, shall have occurred, Assignor shall
have a license, terminable by the Assignee upon any Event of Default,
to collect the Rents accruing from the Premises on or after, but in no
event more than one (1) month in advance of, the respective dates set
forth in the Leases on which the Rents become due (provided that in no
event shall Assignor be permitted to enter into any Lease which makes
rent due earlier than one (1) calendar month in advance or the current
month (except for the last month's rent or security deposit)), and to
hold the Rents as a trust fund for the uses and purposes more
particularly described in the Deed of Trust.  Upon the occurrence of
an Event of Default, the license granted to the Assignor shall be
automatically and immediately revoked without notice to the Assignor.
Upon the revocation of such license the Assignee may at its option
give Tenants a written notice (a "Tenant Notice"), with a copy to
Assignor, requesting the Tenants to pay all Rents and other amounts
due under the Leases directly to Assignee and to perform any of the
Tenants' respective obligations under the Leases for the benefit of
Assignee.

    5.   Assignee's Powers and Rights.  At any time during the term
of the Note or the Deed of Trust, Assignee may, at its option upon or
after an Event of Default and after giving a Tenant Notice, receive
and collect all of the Rents as they become due.  Assignee shall
thereafter continue to receive and collect all of the Rents, until the
Event of Default has been cured and all sums due Assignee have been
paid in full.

    Assignor hereby irrevocably appoints Assignee its true and lawful
attorney, coupled with an interest, with full power of substitution
and with full power for Assignee in its own name and capacity or in
the name and capacity of Assignor, from and after the occurrence of an
Event of Default and after the giving of a Tenant Notice, to demand,
collect, receive and give complete acquittance for any and all Rents
and at Assignee's discretion to file any claim or take any other
action or proceeding and make any settlement of any claims, either in
its own name or in the name of Assignor or otherwise, which Assignee
may deem necessary or desirable in order to collect and enforce the
payment of the Rents.  Tenants are hereby expressly authorized and
directed to pay all Rents and any other amounts due Assignor pursuant
to the Leases or otherwise, to Assignee, or such nominee as Assignee
may designate in a Tenant Notice delivered to such Tenants, and the
Tenants are expressly relieved of any and all duty, liability or
obligation to Assignor with respect to all payments so made.

    From and after the occurrence of an Event of Default and after
the giving of a Tenant Notice, Assignee is hereby vested with full
power to use all measures, legal and equitable, deemed by Assignee
necessary or proper to enforce this Assignment and to collect the
Rents assigned hereunder, including the right of Assignee or its
designee to enter upon the Premises, or any part thereof, with or
without force and with or without process of law and take possession
of all or any part of the Premises together with all personal
property, fixtures, documents, books, records, papers and accounts of
Assignor relating thereto, and may exclude the Assignor, its agents
and servants, wholly therefrom.  Assignor herein grants full power and
authority to Assignee to exercise all rights, privileges and powers
herein granted at any and all times after the occurrence of an Event
of Default and after the giving of a Tenant Notice, without further
notice to Assignor, with full power to use and apply all of the Rents
and other income herein assigned to the payment of the costs of
managing and operating the Premises and of any indebtedness or
liability of Assignor to Assignee, including but not limited to the
payment of taxes, special assessments, insurance premiums, damage
claims, the costs of maintaining, repairing, rebuilding and restoring
the improvements on the Premises or of making the same rentable,
reasonable attorneys' fees incurred in connection with the enforcement
of this Assignment, and of principal and interest payments due (and
all other amounts due under the Deed of Trust) from Assignor to
Assignee on the Note and the Deed of Trust, all in such order as
Assignee may determine.  Assignee shall be under no obligation to
exercise or prosecute any of the rights or claims assigned to it
hereunder or to perform or carry out any of the obligations of the
lessor under any of the Leases and does not assume any of the
liabilities in connection with or arising or growing out of the
covenants and agreements of Assignor in the Leases.  It is further
understood that this Assignment shall not operate to place
responsibility for the control, care, management or repair of the
Premises, or parts thereof, upon Assignee, nor shall it operate to
make Assignee liable for the performance of any of the terms and
conditions of any of the Leases, or for any waste of the Premises by
any Tenant or any other person, or for any dangerous or defective
condition of the Premises or for any negligence in the management,
upkeep, repair or control of the Premises resulting in loss or injury
or death to any Tenant, licensee, employee or stranger.  If Assignor
shall fail to pay, perform or observe any of its covenants or
agreements hereunder, Assignee may pay, perform or observe the same
and collect the cost thereof from Assignor all as more fully provided
in the Deed of Trust.

    6.  Assignee Not Liable; Indemnification.  Anything contained
herein or in any of the Leases to the contrary notwithstanding:  (a)
Assignor shall at all times remain solely liable under the Leases to
perform all of the obligations of Assignor thereunder to the same
extent as if this Assignment had not been executed; (b) neither this
Assignment nor any action or inaction on the part of Assignor or
Assignee shall release Assignor from any of its obligations under the
Leases or constitute an assumption of any such obligations by
Assignee; and (c) Assignee shall not have any obligation or liability
under the Leases or otherwise by reason of or arising out of this
Assignment, nor shall Assignee be required or obligated in any  manner
to make any payment or perform any other obligation of Assignor under
or pursuant to the Leases, or to make any inquiry as to the nature or
sufficiency of any payment received by Assignee, or to present or file
any claim, or to take any action to collect or enforce the payment of
any amounts which have been assigned to Assignee or to which it may be
entitled at any time or times.  Assignor shall and does hereby agree
to indemnify Assignee and hold Assignee harmless from and against any
and all liability, loss or damage which Assignee may or might incur,
and from and against any and all claims and demands whatsoever which
may be asserted against Assignee, in connection with or with respect
to the Leases or this Assignment, whether by reason of any alleged
obligation or undertaking on Assignee's part to perform or discharge
any of the covenants or agreements contained in the Leases or
otherwise.  Should Assignee incur any such liability, loss or damage
in connection with or with respect to the Leases or this Assignment,
or in the defense of any such claims or demands, the amount thereof,
including costs, expenses and reasonable attorneys' fees, shall be
paid by Assignor to Assignee immediately upon demand, together with
interest thereon from the date of advancement at the Default Rate (as
defined in the Note) until paid.

    7.   Deed of Trust Foreclosure.  Upon foreclosure of the lien of
the Deed of Trust and sale of the Premises pursuant thereto, or
delivery and acceptance of a deed in lieu of foreclosure, all right,
title and interest of Assignor in, to and under the Leases shall
thereupon vest in and become the absolute property of the purchaser of
the Premises in such foreclosure proceeding, or the grantee in such
deed, without any further act or assignment by Assignor.
Nevertheless, Assignor shall execute, acknowledge and deliver from
time to time such further instruments and assurances as Assignee may
require in connection therewith and hereby irrevocably appoints
Assignee the attorney-in-fact of Assignor in its name and stead to
execute all appropriate instruments of transfer or assignment, or any
instrument of further assurance, as Assignee may deem necessary or
desirable, and Assignee may substitute one or more persons with like
power, Assignor hereby ratifying and confirming all that its said
attorney or such substitute or substitutes shall lawfully do by virtue
hereof.

    8.   Non-Waiver.  Waiver or acquiescence by either party of any
default by the other party, or failure of either party to insist upon
strict performance by the other party of any covenants, conditions or
agreements in this Assignment, shall not constitute a waiver of any
subsequent or other default or failure, whether similar or dissimilar.

    9.   Rights and Remedies Cumulative.  The rights and remedies of
Assignee and Assignor under this Assignment are cumulative and are not
in lieu of, but are in addition to any other rights or remedies which
Assignee and Assignor shall have under the Note, Deed of Trust, the
Security Agreement or any other Loan Document, or at law or in equity.

    10.  Severability.  If any term of this Assignment, or the
application thereof to any person or circumstances, shall, to any
extent, be invalid or unenforceable, the remainder of this Assignment,
or the application of such term to persons or circumstances other than
those as to which it is invalid or unenforceable, shall not be
affected thereby, and each term of this Assignment shall be valid and
enforceable to the full extent permitted by law.

    11.  Notices.  (a)  All notices, demands, requests, and other
communications desired or required to be given hereunder  ("Notices"),
shall be in writing and shall be given by: (i) hand delivery to the
address for Notices; (ii) delivery by overnight courier service to the
address for Notices; or (iii) sending the same by United States mail,
postage prepaid, certified mail, return receipt requested, addressed
to the address for Notices.

    (b)  All Notices shall be deemed given and effective upon the
earlier to occur of: (x) the hand delivery of such Notice to the
address for Notices; (y) one business day after the deposit of such
Notice with an overnight courier service by the time deadline for next
day delivery addressed to the address for Notices; or (z) three
business days after depositing the Notice in the United States mail,
postage prepaid, as set forth in (a)(iii) above.  All Notices shall be
addressed to the following addresses:

     Assignor:     Bedford Property Investors, Inc.
                   270 Lafayette Circle
                   Lafayette, CA 94549
                   Attn:  Chief Financial Officer

     Assignee:     Security Life of Denver Insurance Company
                   c/o ING Investment Management LLC
                   5780 Powers Ferry Road, NW, Suite 300
                   Atlanta, Georgia  30327-4349
                   Attention: Mortgage Loan Servicing Department

        and to:    ING Investment Management LLC
                   5780 Powers Ferry Road, NW, Suite 300
                   Atlanta, Georgia  30327-4349
                   Attention:  Real Estate Law Department

With a copy to:    Nyemaster, Goode, Voigts, West,
                   Hansell & O'Brien, P.C.
                   700 Walnut, Suite 1600
                   Des Moines, Iowa 50309

or to such other persons or at such other place as any party hereto
may by Notice designate as a place for service of Notice.  Provided,
that the "copy to" Notice to be given as set forth above is a courtesy
copy only; and a Notice given to such person is not sufficient to
effect giving a Notice to the principal party, nor does a failure to
give such a courtesy copy of a Notice constitute a failure to give
Notice to the principal party.

    12.  Heirs, Successors and Assigns.  The terms "Assignor" and
"Assignee" shall be construed to include the respective heirs,
personal representatives, successors and assigns of Assignor and
Assignee.  The gender and number used in this Assignment are used as a
reference term only and shall apply with the same effect whether the
parties are of the masculine or feminine gender, corporate or other
form, and the singular shall likewise include the plural.

    13.  Amendment.  This Assignment may not be amended, modified or
changed nor shall any waiver of any provisions hereof be effective,
except only by an instrument in writing and signed by the party
against whom enforcement of any waiver, amendment, change,
modification or discharge is sought.

    14.  Captions.  The captions or headings preceding the text of
the Paragraphs of this Assignment are inserted only for convenience of
reference and shall not constitute a part of this Assignment, nor
shall they in any way affect its meaning, construction or effect.

    15.  Termination of Assignment.  Upon payment in full of the
indebtedness described in Paragraph 2, this Assignment shall terminate
and be void and of no force or effect, and Assignee shall release its
lien on the Rents and Leases (and upon request shall record a
termination of this Assignment) without costs or expenses to Assignee,
Assignor hereby agreeing to reimburse Assignee for such costs and
expenses.

    16.  Choice of Law.  The validity and interpretation of this
Assignment shall be construed in accordance with the laws (excluding
conflicts of laws rules) of California.

    17.  Event of Default.  The occurrence of any one or more of the
following events shall constitute an event of default hereunder
("Event of Default"): (i) the failure of Assignor to make any payment
due hereunder within ten (10) days after the same shall fall due, (ii)
default shall be made in the due observance or performance of any of
the other covenants, agreements or conditions hereinbefore or
hereinafter contained, required to be kept or performed or observed by
the Assignor which does not relate to the nonpayment of any monetary
sum, and such default is not cured within thirty (30) days following
written notice thereof by Assignee to Assignor or such longer period
as is reasonably necessary to cure such default as long as Assignor is
diligently pursuing such cure and such default is curable by Assignor
within a reasonable time provided that such additional time shall not
exceed thirty (30) days (for an aggregate sixty (60) day period) or
such longer time period as approved by Assignee, or (iii) the
occurrence of any breach, default, event of default, or failure of
performance (however denominated) under the Note, the Deed of Trust or
any of the other Loan Documents, and the expiration of any applicable
cure period without the same having been cured.  Any Event of Default
hereunder shall constitute a default under each and all of the other
Loan Documents.

    18.  Exculpatory.  The liability of Assignor personally to pay
the Note or any interest that may accrue thereon, or any indebtedness
or obligation accruing or arising hereunder is limited to the extent
set forth in the Note.

    19.  Integration.  This Assignment, together with the other Loan
Documents, constitutes the entire agreement between the parties hereto
pertaining to the subject matters hereof and supersedes all
negotiations, preliminary agreements and all prior or contemporaneous
discussions and understandings of the parties hereto in connection
with the subject matters hereof.

    20.  Time of Essence.  Time is of the essence in the performance
of this Assignment.

    21.  WAIVER OF JURY TRIAL. THE PARTIES HERETO, AFTER CONSULTING
OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A
TRIAL BY JURY IN ANY LITIGATION BASED ON OR ARISING OUT OF THIS
AGREEMENT OR INSTRUMENT, OR ANY RELATED INSTRUMENT OR AGREEMENT, OR
ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR ANY COURSE OF CONDUCT,
DEALING, STATEMENTS, WHETHER ORAL OR WRITTEN, OR ACTION OF ANY PARTY
HERETO.  NO PARTY SHALL SEEK TO CONSOLIDATE BY COUNTERCLAIM OR
OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH
ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED.  THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN
ANY RESPECT OR RELINQUISHED BY ANY PARTY HERETO EXCEPT BY A WRITTEN
INSTRUMENT EXECUTED BY ALL PARTIES.

    22.  Attorney's fees.  Assignor shall pay on demand all costs and
expenses incurred by Assignee in enforcing or protecting its rights
and remedies hereunder, including, but not limited to, reasonable
attorney's fees and legal expenses.

    23.  Cross-Collateralization Rider.   The terms and conditions of
the Cross-Collateralization Rider, attached hereto as Exhibit B, are
incorporated herein by this reference.

    24.  Partial Release.  Portions of the Premises shall be released
herefrom upon release from the Deed of Trust as provided for therein.

    IN WITNESS WHEREOF, Assignor has caused this instrument to be
executed as of the date first above written, and acknowledges receipt
of a copy hereof at the time of execution.



                             BEDFORD PROPERTY INVESTORS, INC., a
                             Maryland corporation


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





STATE OF CALIFORNIA          )
                        )SS.
COUNTY OF _______________)

    On ___________________, 2000, before me, __________________
personally appeared Hanh Kihara, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that she
executed the same in her authorized capacity, and that by her
signature on the instrument the person, or the entity upon behalf of
which person acted, executed the instrument.

    Witness my hand and official seal.

                                  ____________________________
                                  Notary

                                  (Seal)
                            EXHIBIT A
                        Legal Description

Parcel I - 410 Allerton, South San Francisco, San Mateo County,
California;

Parcel II - 301, 311 and 325 Grand Avenue, South San Francisco, San
Mateo County, California;

Parcel III - 901 Kaiser Road, Napa, Napa County, California;

Parcel IV - 840-940 Auburn Court, Fremont, Alameda County, California;

Parcel V - 6500 Kaiser Drive, Fremont, Alameda County, California; and

Parcel VI - 45713 and 47533 Westinghouse Drive, Fremont, Alameda
County, California

<PAGE>
                            EXHIBIT B
                  CROSS-COLLATERALIZATION RIDER

    Assignor and Assignee are Maker and Payee, respectively, under
the following instruments, each of which is dated as of this same date
(together, the "Instruments"):

    1.   Promissory Note in the amount of $23,415,000 (the "Note");

    2.   Promissory Note in the amount of $7,475,000 (the "Other
         Note");

    The Note is secured by (i) a Deed of Trust, Security Agreement,
Financing Statement and Fixture Filing; (ii) this Assignment, and
(iii) a Security Agreement (collectively, the "Security Documents").

    The Other Note is secured by, among other things, the following
documents, each dated as of this same date and relating to certain
property located at (1) 4546 South 35th Street, Phoenix, Maricopa
County, Arizona; (2) 2601 Broadway, Tempe, Maricopa County, Arizona;
(3) 3015, 3101, 3111, 3121 and 3131 South Park Drive, Tempe, Maricopa
County, Arizona, 2307 & 2315 West Fairmont Drive, Tempe, Maricopa
County, Arizona, 3010,3110 & 3120 South Potter Road, Tempe, Maricopa
County, Arizona: (i) a Deed of Trust, Security Agreement, Financing
Statement and Fixture Filing, (ii) an Assignment of Rents and Leases,
and (iii) a Security Agreement (collectively, the "Other Security
Documents").

    In addition to securing the obligations described in the Note,
this Assignment shall also secure the Other Note and the obligations
secured by the Other Security Documents.

    An Event of Default under the Note or under any of the Security
Documents shall constitute an Event of Default under the Other Note
and the Other Security Documents.  An Event of Default under the Other
Note or the Other Security Documents shall constitute an Event of
Default under the Note and the Security Documents.

    Assignor waives all rights to have all or part of the Premises or
the property described in the Other Security Documents marshalled upon
any foreclosure of the Security Documents or the Other Security
Documents.  Assignee shall have the right to sell, and any court in
which foreclosure proceedings may be brought shall have the right to
order a sale of the Premises or the property described in the Other
Security Documents as a whole or in separate parcels, in any order
that Assignee may designate.  Assignor makes this waiver for itself,
for all persons and entities claiming through or under Assignor and
for all persons and entities who may acquire a lien on all or any part
of the Premises or the property described in the Other Security
Documents, or on any interest therein.



Bedford (CA)
19806.311

                        SECURITY AGREEMENT

    THIS SECURITY AGREEMENT ("Agreement") is made and entered into as
of July 27, 2000, by BEDFORD PROPERTY INVESTORS, INC., a Maryland
corporation ("Debtor"), in favor of SECURITY LIFE OF DENVER INSURANCE
COMPANY, a Colorado corporation ("Secured Party"), and is made with
reference to the following facts:

RECITALS:

    A.   Secured Party is loaning to Debtor the sum of TWENTY-THREE
MILLION FOUR HUNDRED FIFTEEN THOUSAND AND NO/100 DOLLARS
($23,415,000), to be evidenced by a Promissory Note dated on or about
this same date, executed by Debtor in favor of Secured Party (such
Promissory Note together with any extensions, renewals, substitutions
and amendments thereof are referred to as the "Note").  Payment of the
Note is secured by, among other things, a Deed of Trust, Security
Agreement, Financing Statement and Fixture Filing (the "Deed of
Trust") executed by Debtor as trustor in favor of Secured Party,
encumbering the real property described in Exhibit "A" attached hereto
and made a part hereof including improvements and personal property
thereon (collectively, the "Premises") and an Assignment of Rents and
Leases (the "Assignment of Rents") assigning all rents, issues and
profits of and from the Premises.  This Agreement, the Note, the Deed
of Trust, and the Assignment of Rents and the other documents referred
to therein or executed in connection therewith are collectively called
the "Loan Documents."

    B.   Debtor has executed and delivered to Secured Party the Other
Note (as defined in Exhibit "B" hereto) and the Other Security
Documents (as defined in Exhibit "B" hereto).

    C.   Debtor desires to grant to Secured Party a security interest
in certain personal property as described in this Agreement.

    NOW, THEREFORE, in consideration of the foregoing recitals and
other valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound, the Debtor
agrees as follows:

    1.   Grant of Security Interest.  Debtor hereby grants to Secured
Party a security interest in the Debtor's right, title and interest in
and to the following items and types of property, now owned and BPI
may hereafter acquire collateral (copy machines, computers, etc.) That
are finances and thus subject to UCC liens.  This Agreement should
carve out purchase money liens.  hereafter acquired, which property is
collectively referred to herein as the "Collateral":

    (a)  Personal Property.  All machinery, apparatus, equipment,
goods, systems, building materials, carpeting, furnishings, fixtures
and property of every kind and nature whatsoever, now or hereafter
located in or upon or affixed to the Premises, or any part thereof, or
used or usable in connection with any construction on or any present
or future operation of the Premises, now owned or hereafter acquired
by Debtor, including, but without limitation of the generality of the
foregoing: all heating, lighting, refrigerating, ventilating, air-
conditioning, air-cooling, fire extinguishing, plumbing, cleaning,
telephone, communications and power equipment, systems and apparatus;
and all elevators, switchboards, motors, pumps, screens, awnings,
floor coverings, cabinets, partitions, conduits, ducts and
compressors; and all cranes and craneways, oil storage, sprinkler/fire
protection and water service equipment; and also including any of such
property stored on the Premises or in warehouses and intended to be
used in connection with or incorporated into the Premises or for the
pursuit of any other activity in which Debtor may be engaged on the
Premises, and including without limitation all tools, musical
instruments and systems, audio or video equipment, cabinets, awnings,
window shades, venetian blinds, drapes and drapery rods and brackets,
screens, carpeting and other window and floor coverings, decorative
fixtures, plants, cleaning apparatus, and cleaning equipment,
refrigeration equipment, cables, computers, and computer equipment,
software, books, supplies, kitchen equipment, appliances, tractors,
lawn mowers, ground sweepers and tools, swimming pools, whirlpools,
recreational or play equipment together with all substitutions,
accessions, repairs, additions and replacements to any of the
foregoing; it being understood and agreed that all such machinery,
equipment, apparatus, goods, systems, fixtures, and property are a
part of the Premises and are declared to be a portion of the security
for the Obligations (as hereinafter defined) (whether in single units
or centrally controlled, and whether physically attached to said real
estate or not), excluding, however, personal property owned by tenants
of the Premises.  All of such property is collectively referred to as
the "Personal Property".

    (b)  Accounts.  All accounts receivable and any right of Debtor
to payment for goods sold or leased or for services rendered, whether
or not yet earned by performance, and whether or not evidenced by an
instrument or chattel paper, arising from the operation of the
Premises, now existing or hereafter created, substitutions therefor,
proceeds thereof (whether cash or noncash, movable or immovable,
tangible or intangible) received upon the sale, exchange, transfer,
collection or other disposition or substitution thereof and any or all
of the foregoing and proceeds therefrom (collectively, the
"Accounts").

    (c)  Permits.  All authorizations, licenses, permits, contracts,
management agreements, franchise agreements, and occupancy and other
certificates concerning the ownership, use and operation of the
Premises (collectively, the "Permits").

    (d)  Rents and Deposits.  All monies on deposit for the payment
of real estate taxes or special assessments against the Premises or
for the payment of premiums on policies of fire and other hazard
insurance covering the Collateral or the Premises except as provided
in the Deed of Trust; all proceeds paid for damage done to the
Collateral or the Premises except as provided in the Deed of Trust;
all proceeds of any award or claim for damages for any of the
Collateral or the Premises taken or damaged under the power of eminent
domain or by condemnation; all rents, issues and leases of the
Premises; and all tenants' or security deposits held by Debtor in
respect of the Premises.

    (e)  Trade Names and Rights.  All names under or by which the
Premises or any improvements thereon may at any time be operated or
known, and all rights to carry on business under any such names or any
variant thereof, and all trademarks, trade names, patents, patents
pending and goodwill with respect to the Premises.

    (f)  Memberships.  All shares of stock or partnership interest or
other evidence of ownership of any part of the Premises that is owned
by Debtor in common with others, including all water stock relating to
the Premises, if any, and all documents of membership in any owners'
or members' association or similar group having responsibility for
managing or operating any part of the Premises and any management
agreements.

    (g)  Plans.  All plans and specifications (except those owned by
third parties) prepared for construction of improvements on the
Premises and all studies, data and drawings related thereto; and all
contracts and agreements of Debtor relating to the aforesaid plans and
specifications or to the aforesaid studies, data and drawings, or to
the construction of improvements on the Premises.

    (h)  Reserve Accounts.  All of Debtor's right, title and interest
in, to and under any and all reserve, deposit or escrow accounts made
pursuant to any loan document made between Debtor and Secured Party
with respect to the Premises, together with all income, profits,
benefits and advantages arising therefrom.

    (i)  Other Collateral.  All goods, accounts, general intangibles,
chattel paper, instruments, documents, consumer goods, equipment and
inventory (as defined in the California Uniform Commercial Code
("UCC")) located on and used in the operation of the Premises.

    (j)  Substitutions.  All substitutions, accessions, additions and
replacements to any of the foregoing.

    (k)  Products and Proceeds.  All products and proceeds of any of
the foregoing, or with respect to the Premises, including without
limitation, insurance proceeds, proceeds of any voluntary or
involuntary disposition or diminution in value of any of the foregoing
or of the Premises, and any claim respecting any thereof (pursuant to
judgment, condemnation award or otherwise) and all goods, accounts,
general intangibles, chattel paper, instruments, documents, consumer
goods, equipment and inventory, wherever located, acquired with the
proceeds of any of the foregoing or proceeds thereof.

For purposes of this Agreement, the term "proceeds" means whatever is
received when any of the foregoing or the proceeds thereof (including,
without limitation, cash proceeds) is sold, exchanged or otherwise
disposed of (including involuntary dispositions or destruction and
claims for damages thereto), including without limitation cash
proceeds, insurance proceeds, condemnation proceeds, and any other
rights or property arising under or receivable upon any such
disposition.  The security interest is granted in the Collateral for
the purpose of securing the following obligations ("Obligations"): (a)
payment of the indebtedness evidenced by the Note; (b) the strict
performance and observance of all agreements, warranties, covenants
and conditions of Debtor contained in the Note, Deed of Trust,
Assignment of Rents, this Agreement, the other Loan Documents, and
every other instrument securing payment of the Note; and (c) the
repayment of all monies expended by Secured Party under the provisions
hereof, the Deed of Trust, the Assignment of Rents, the other Loan
Documents, or any other instrument securing payment of the Note, with
interest thereon from the date of expenditure at the Default Rate (as
defined in the Note); upon the terms and conditions set forth herein.

    2.   Representations.  Debtor hereby represents and warrants to
Secured Party that:

    (a)  Debtor owns, or with respect to property hereafter acquired
will own, all of the Collateral free and clear of all liens, charges,
encumbrances, financing statements and adverse claims of any kind or
nature whatsoever in favor of any entity other than Secured Party.

    (b)  Debtor owns, or with respect to property hereafter acquired
will own, and is, or will be, entitled to collect, without right of
counterclaim or set-off, all of the Accounts presently held and those
arising in the future, free and clear of all liens, charges,
encumbrances, financing statements and adverse claims of any nature
whatsoever.

    (c)  Debtor is the holder of the Permits, which allow Debtor to
operate the Premises for its intended use.

    (d)  The Collateral is not used or bought primarily for personal,
family or household purposes of Debtor.

    3.   Covenants.  Debtor hereby covenants and agrees that:

    (a)  Debtor will pay any indebtedness owed to Secured Party
evidenced by the Note promptly when due (giving effect to applicable
grace periods, if any) and will repay immediately upon demand all
expenses, including reasonable attorneys' fees, legal expenses and
costs, together with interest at the Default Rate (as defined in the
Note) from the date of such expenditure, incurred by Secured Party in
enforcing the Obligations and this Agreement.  Payment of such
expenses and interest shall be secured by this Agreement and the other
Loan Documents.

    (b)  Debtor will maintain complete and accurate financial
information concerning the Collateral.  Debtor will permit Secured
Party's representatives to enter on Debtor's property at any
reasonable time and upon reasonable prior notice to inspect the
Collateral and Debtor's books and records relating thereto and to make
extracts from such books and records.

    (c)  Debtor shall promptly notify Secured Party of all claims and
demands made against the Collateral and any information received that
may affect the value of the Collateral or the rights and remedies of
Secured Party relating thereto (including any liens, encumbrances or
security interests purporting to affect the title to the Collateral).
In the event of any such claim or demand, Debtor shall promptly take
such action as may be reasonably necessary to protect the value of the
Collateral.

    (d)  Debtor will pay when due all taxes, assessments or similar
obligations affecting the Collateral.  Debtor shall have the right to
contest the amount or validity of any such taxes, assessments or
obligations by appropriate proceedings conducted in good faith and
with due diligence and otherwise in accordance with the provisions of
the Deed of Trust.

    (e)  The Personal Property shall be kept on the Premises except
for the sales of inventory in the ordinary course of business.  Debtor
shall not remove Collateral without the written consent of Secured
Party, unless the Collateral is removed in the ordinary course of
business and Debtor promptly replaces the removed Collateral with
substitute Collateral of substantially similar quality and utility and
of equal or greater value.

    (f)  Debtor will keep the Collateral free from any lien, charge,
encumbrance, financing statement or adverse claim in favor of any
entity other than Secured Party.  Debtor will protect and defend the
Collateral against all claims thereto and hereby indemnifies and
agrees to defend and save Secured Party harmless against and with
respect to any liability or claim in connection therewith.  Debtor
will not sell, dispose of, or grant a security interest or other
encumbrance in any portion of the Collateral or execute any financing
statement covering any portion of the Collateral in favor of any
person other than Secured Party.  Debtor may, however, sell or
otherwise dispose of Collateral in the ordinary course of business if
Debtor promptly replaces such Collateral sold with substitute
Collateral of substantially similar quality and utility and of equal
or greater value.

    (g)  Debtor will do all acts necessary to maintain, preserve,
protect and keep the Collateral in good condition and repair, ordinary
wear and tear excepted, will not permit any waste or unusual or
unreasonable depreciation of Collateral to occur and will not commit
any act for which any portion of the Collateral might be confiscated
by any governmental or private entity.

    (h) Debtor will maintain and deliver to Secured Party policies of
insurance relating to the Collateral as required by the Deed of Trust.

    4.   Secured Party's Actions.  Upon the occurrence of an Event of
Default (as hereinafter defined), Secured Party shall have the right,
but shall not be obligated, to discharge taxes, liens, security
interests or other encumbrances at any time levied or placed on the
Collateral or on the Premises, pay for insurance on the Collateral,
pay for the maintenance and preservation of the Collateral, sign and
endorse any checks, notes, drafts, money orders, acceptances or other
forms of remittance payable to Debtor and any invoice, freight or
express bill, bill of lading, or other documents relating to the
Collateral, demand, bring suit, collect or give acquittance for any
monies due on the Accounts or compromise, prosecute or defend any
action, claim or proceeding arising from the Collateral.  Secured
Party shall have the right to do any or all of the foregoing in the
name of Debtor or otherwise.  Should Debtor fail or refuse to make any
payment, perform any covenant or obligation, observe any condition or
take any action which Debtor is obligated hereunder to make, perform,
observe, take or do, at the time or in the manner herein provided,
then Secured Party shall have the right to, at Secured Party's sole
discretion, without notice to or demand upon Debtor with respect to
any Event of Default and without releasing Debtor from any obligation,
covenant or condition hereof, make, perform, observe, take or do the
same in such manner and to such extent as Secured Party may, during
any period of time that Debtor is in default hereunder, deem necessary
to protect the Collateral and the security provided by this Agreement.
Debtor agrees to reimburse Secured Party on demand for any reasonable
payment made, or any reasonable expense incurred, including reasonable
attorneys' fees, by Secured Party in connection with the foregoing,
together with interest thereon at the Default Rate.

    5.   Default.  The occurrence of any one or more of the following
events shall constitute an event of default hereunder ("Event of
Default"): (i) the failure of Debtor to make any payment due hereunder
within ten (10) days after the same shall fall due, (ii) default shall
be made in the due observance or performance of any of the other
covenants, agreements or conditions hereinbefore or hereinafter
contained, required to be kept or performed or observed by the Debtor
which does not relate to the nonpayment of any monetary sum, and such
default is not cured within thirty (30) days following written notice
thereof by Secured Party to Debtor or such longer period as is
reasonably necessary to cure such default as long as Debtor is
diligently pursuing such cure and such default is curable by Debtor
within a reasonable time provided that such additional time shall not
exceed thirty (30) days (for an aggregate sixty (60) day period)
unless a longer time is approved by Secured Party, or (iii) the
occurrence of any breach, default, event of default, or failure of
performance (however denominated) under the Note, the Deed of Trust or
any of the other Loan Documents, and the expiration of any applicable
cure period without the same having been cured.  Any Event of Default
hereunder shall constitute a default under each and all of the other
Loan Documents.  Upon the occurrence of any one or more Events of
Default hereunder, Secured Party shall have the right at its option
and without notice or demand, to declare all Obligations and
indebtedness secured hereby immediately due and payable, and to do one
or more of the following:

    (a)  Foreclose or otherwise enforce Secured Party's security
interest in any manner permitted by the UCC or other applicable laws,
or provided for in the Note, the Deed of Trust, the Assignment of
Rents, this Agreement or other Loan Documents or applicable agreement.

    (b)  Enter upon the Premises, exclude Debtor therefrom and take
immediate possession of the Collateral, either personally or by means
of a receiver appointed by a court, and may, at Secured Party's
option, use, operate, manage and control the Collateral in any lawful
manner or business and collect and receive all rents, income, revenue,
earnings, issues and profits of the Collateral, remove all or part of
the Collateral as Secured Party may determine in Secured Party's
discretion, and any monies so collected or received by Secured Party
shall be applied to the payment of all costs and expenses of Secured
Party's taking and fees for such operation thereof, all costs and
expenses of such repairs, renovations and alterations of the
Collateral and attorneys' fees in a reasonable sum, with the
remainder, if any, to be applied upon any indebtedness secured hereby,
or toward the satisfaction of any of the Obligations, in such order as
is specified in the Note and at such times as Secured Party may
determine.

    (c)  With respect to the Accounts, at any time give notice of
assignment to any and all obligors or account debtors under the
Accounts and may collect the Accounts.  Debtor hereby covenants and
agrees that Debtor will cooperate fully with Secured Party, and its
employees and agents, and will provide any and all documents deemed by
Secured Party to be necessary or desirable to collect the Accounts.

    (d)  Sell, lease or otherwise dispose of any Collateral at one or
more public or private sales, whether or not such Collateral is
present at the place of sale, for cash or credit or future delivery,
on such terms and in such manner as Secured Party may determine.  In
the event of a sale, lease or other disposition of the Collateral or
of collection of the Accounts:

         (1)  Any person, including Debtor and Secured Party, may
    purchase at the sale.

         (2)  (A)  In connection with any sale or other dispositions
    of the Collateral, the parties agree that without limiting any
    other commercially reasonable conduct as may be followed by
    Secured Party, the following procedures shall be deemed to
    comprise and constitute a commercially reasonable sale (the
    "sale"):

              (i)   Secured Party shall mail to Debtor written
         notice of the sale not less than ten (10) days prior
         to such sale.

              (ii)  In the event of a public sale, as often as
         (but no more than) required under the UCC immediately
         preceding the sale, Secured Party will publish notice
         of the sale in an appropriate publication that Secured
         Party selects.  The notice will advise prospective
         purchasers as to where they may obtain information
         with respect to the Collateral.

              (iii) Upon receipt of any written request to do
         so, Secured Party will make available to any bona fide
         prospective purchaser for inspection, within five (5)
         business days following receipt of such request and
         during reasonable business hours, such information
         (including records and documents with respect to the
         Accounts) as shall be necessary to enable a
         prospective purchaser to prepare a bid.

              (B)  Notwithstanding paragraph (A) hereof, in the
    event Secured Party offers to sell all or any part of the Colla-

    teral, Secured Party will be under no obligation to consummate a
    sale if, in its reasonable business judgment, none of the offers
    received by it reasonably approximates the fair value of such
    Collateral.

         (3)  Secured Party shall apply the proceeds of any sale,
    collection, or disposition hereunder to payment of the following:
    (A) the expenses of such sale or disposition, including but not
    limited to the costs of publishing, recording, mailing and
    posting notice; (B) the cost of any search and other evidence of
    title procured in connection therewith and any transfer tax on
    any deed or conveyance or bill of sale; (C) all sums expended
    under the terms hereof, not then repaid, with accrued interest in
    the amount provided herein; (D) all sums evidenced by the Note
    and secured hereby and evidenced or owed pursuant to the Deed of
    Trust; and (E) the remainder, if any, to the person or persons
    legally entitled thereto.

         (4)  Secured Party may require Debtor to make the
    Collateral available to Secured Party at a reasonable place
    designated by Secured Party.

         (5)  If the holder of the Note is a purchaser at such sale,
    such holder shall be entitled to apply any portion of the
    indebtedness then secured hereby for or in settlement or payment
    of any portion of the purchase price of the property purchased at
    such sale.

    (e)  Recover from Debtor all reasonable costs and expenses,
including, without limitation, reasonable attorneys' fees, incurred or
paid by Secured Party in exercising any right, power or remedy
provided by this Agreement or by law.

    6.   Exercise of Remedies; No Waiver.  All remedies conferred
upon Secured Party shall be deemed cumulative with, and not exclusive
of, any other remedy conferred by this Agreement, the Note, the Deed
of Trust, the Assignment of Rents, any of the other Loan Documents, or
by law or equity.  The exercise of any one remedy shall not preclude
the exercise of any other.  Failure of Secured Party to exercise any
rights it may have upon Debtor's default hereunder shall not be deemed
to be a waiver of Secured Party's rights thereupon or to be a release
of Debtor from its Obligations.  The acceptance by Secured Party of
any sum after the same is due shall not constitute a waiver of the
right either to require prompt payment, when due, of all other sums
hereby secured or to declare a default as herein provided.  The
acceptance by Secured Party of any sum in an amount less than the sum
then due shall not constitute a waiver of the obligation of Debtor to
pay the entire sum then due.  The waiver by Secured Party of any
default hereunder shall not be deemed to constitute a waiver of any
succeeding default.  Debtor waives any right to require Secured Party
to proceed against any person or to exhaust any Collateral or to
pursue any remedy in Secured Party's power.

    7.   Successors.  All agreements, covenants, conditions and
provisions of this Agreement shall inure to the benefit of Secured
Party and its successors and assigns, and shall bind the heirs,
executors, administrators, successors in interest of Debtor in the
Collateral.  In the event that there is more than one Debtor or
successor in interest of Debtor in the Collateral, they shall be
jointly and severally liable hereunder.  The obligations of Debtor
hereunder shall be binding on any community of which Debtor is a part
and on any separate or quasi-community property of any Debtor.

    8.   Term.  This Agreement shall remain in full force and effect
until the Obligations and the indebtedness secured hereby, including
reasonable charges, expenses, fees, costs, and interest, shall have
been paid in full or until its release and termination is given in
writing by Secured Party.  No party to this Agreement or otherwise
liable for the Obligations shall be discharged by any extension of
time, additional advances, renewals and extensions of the Note, the
Deed of Trust, or the Assignment of Rents, the taking of further
security, releases of a part or all of the Collateral, or any other
acts except as provided in this section.

    9.   Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws (excluding conflicts of laws
rules) of California.

    10.  No Modification.  This Agreement may not be modified or
amended except by a written instrument executed by the party sought to
be charged or bound thereby.  If any provision hereof should be held
unenforceable or void, then such provision shall be deemed separable
from the remaining provisions hereof and shall in no way affect the
validity of this Agreement except that if such provision relates to
the payment of any monetary sum, then Secured Party may at its option
declare the indebtedness evidenced by the Note and all other sums
secured hereby immediately due and payable.

    11.  Notices.  All notices, demands, requests, and other
communications desired or required to be given hereunder by the Debtor
or Secured Party ("Notices"), shall be in writing and shall be given
by: (i) hand delivery to the address for Notices; (ii) delivery by
overnight courier service to the address for Notices; or (iii) sending
the same by United States mail, postage prepaid, certified mail,
return receipt requested, addressed to the address for Notices.

    All Notices shall be deemed given and effective upon the earlier
to occur of: (x) the hand delivery of such Notice to the address for
Notices; (y) one business day after the deposit of such Notice with an
overnight courier service by the time deadline for next day delivery
addressed to the address for Notices; or (z) three business days after
depositing the Notice in the United States mail, postage prepaid, as
set forth in (iii) above.  All Notices shall be addressed to the
following addresses:

       Debtor:     Bedford Property Investors, Inc.
                   270 Lafayette Circle
                   Lafayette, CA 94549
                   Attn:  Chief Financial Officer

 Secured Party:    Security Life of Denver Insurance Company
                   c/o ING Investment Management LLC
                   5780 Powers Ferry Road, NW, Suite 300
                   Atlanta, Georgia  30327-4349
                   Attention: Mortgage Loan Servicing Department

                             and

                   ING Investment Management LLC
                   5780 Powers Ferry Road, NW, Suite 300
                   Atlanta, Georgia  30327-4349
                   Attention:  Real Estate Law Department

With a copy to:    Nyemaster, Goode, Voigts, West,
                     Hansell & O'Brien, P.C.
                   700 Walnut, Suite 1600
                   Des Moines, Iowa 50309

or to such other persons or at such other place as any party hereto
may by Notice designate as a place for service of Notice.  Provided,
that the "copy to" Notice to be given as set forth above is a courtesy
copy only; and a Notice given to such person is not sufficient to
effect giving a Notice to the principal party, nor does a failure to
give such a courtesy copy of a Notice constitute a failure to give
Notice to the principal party.

    12.  Time is of the Essence.  Time is of the essence in the
performance of Debtor's obligations under this Agreement.

    13.  Exculpation.  The liability of Debtor personally to pay the
Note or any interest that may accrue thereon, or any indebtedness or
obligation accruing or arising hereunder is limited to the extent set
forth in the Note.

    14.  Integration.  This Agreement, the other Loan Documents and
the certain Environmental Indemnification Agreement together
constitute the entire agreement between the parties hereto pertaining
to the subject matters hereof and thereof and supersede all
negotiations, preliminary agreements and all prior or contemporaneous
discussions and understandings of the parties hereto in connection
with the subject matters hereof and thereof.

    15.  WAIVER OF JURY TRIAL. THE PARTIES HERETO, AFTER CONSULTING
OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A
TRIAL BY JURY IN ANY LITIGATION BASED ON OR ARISING OUT OF THIS
AGREEMENT OR INSTRUMENT, OR ANY RELATED INSTRUMENT OR AGREEMENT, OR
ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR ANY COURSE OF CONDUCT,
DEALING, STATEMENTS, WHETHER ORAL OR WRITTEN, OR ACTION OF ANY PARTY
HERETO.  NO PARTY SHALL SEEK TO CONSOLIDATE BY COUNTERCLAIM OR
OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH
ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED.  THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN
ANY RESPECT OR RELINQUISHED BY ANY PARTY HERETO EXCEPT BY A WRITTEN
INSTRUMENT EXECUTED BY ALL PARTIES.

    16.  Attorney's Fees.  Debtor shall pay on demand all costs and
expenses incurred by Secured Party in enforcing or protecting its
rights and remedies hereunder, including, but not limited to,
reasonable attorney's fees and legal expenses.

    17.  Cross-Collateralization Rider.   The terms and conditions of
the Cross-Collateralization Rider, attached hereto as Exhibit B, are
incorporated herein by this reference.

    18.  Partial Release.  Portions of the Premises shall be released
herefrom upon release from the Deed of Trust as provided for therein.

    IN WITNESS WHEREOF, Debtor has caused this Agreement to be
executed as of the date first set forth above and acknowledges receipt
of a copy hereof at the time of execution.

                             DEBTOR:

                             BEDFORD PROPERTY INVESTORS, INC., a
                             Maryland corporation


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





STATE OF CALIFORNIA          )
                        )SS.
COUNTY OF _______________)

    On ___________________, 2000, before me, __________________
personally appeared Hanh Kihara, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that she
executed the same in her authorized capacity, and that by her
signature on the instrument the person, or the entity upon behalf of
which person acted, executed the instrument.

    Witness my hand and official seal.

                                  ____________________________
                                  Notary

                                  (Seal)

                            EXHIBIT A
                        LEGAL DESCRIPTION

Parcel I - 410 Allerton, South San Francisco, San Mateo County,
California;

Parcel II - 301, 311 and 325 Grand Avenue, South San Francisco, San
Mateo County, California;

Parcel III - 901 Kaiser Road, Napa, Napa County, California;

Parcel IV - 840-940 Auburn Court, Fremont, Alameda County, California;

Parcel V - 6500 Kaiser Drive, Fremont, Alameda County, California; and

Parcel VI - 45713 and 47533 Westinghouse Drive, Fremont, Alameda
County, California
<PAGE>
                            EXHIBIT B
                  CROSS-COLLATERALIZATION RIDER

    Debtor and Secured Party are Maker and Payee, respectively, under
the following instruments, each of which is dated as of this same date
(together, the "Instruments"):

    1.   Promissory Note in the amount of $23,415,000 (the "Note");

    2.   Promissory Note in the amount of $7,475,000 (the "Other
         Note");

    The Note is secured by (i) a Deed of Trust, Security Agreement,
Financing Statement and Fixture Filing; (ii) an Assignment of Rents
and Leases, and (iii) a Security Agreement (collectively, the
"Security Documents").

    The Other Note is secured by, among other things, the following
documents, each dated as of this same date and relating to certain
property located at (1) 4546 South 35th Street, Phoenix, Maricopa
County, Arizona; (2) 2601 Broadway, Tempe, Maricopa County, Arizona;
(3) 3015, 3101, 3111, 3121 and 3131 South Park Drive, Tempe, Maricopa
County, Arizona, 2307 & 2315 West Fairmont Drive, Tempe, Maricopa
County, Arizona, 3010,3110 & 3120 South Potter Road, Tempe, Maricopa
County, Arizona: (i) a Deed of Trust, Security Agreement, Financing
Statement and Fixture Filing, (ii) an Assignment of Rents and Leases,
and (iii) this Agreement (collectively, the "Other Security
Documents").

    In addition to securing the obligations described in the Note,
this Agreement shall also secure the Other Note and the obligations
secured by the Other Security Documents.

    An Event of Default under the Note or under any of the Security
Documents shall constitute an Event of Default under the Other Note
and the Other Security Documents.  An Event of Default under the Other
Note or the Other Security Documents shall constitute an Event of
Default under the Note and the Security Documents.

    Debtor waives all rights to have all or part of the Premises or
the property described in the Other Security Documents marshalled upon
any foreclosure of the Security Documents or the Other Security
Documents.  Secured Party shall have the right to sell, and any court
in which foreclosure proceedings may be brought shall have the right
to order a sale of the Premises or the property described in the Other
Security Documents as a whole or in separate parcels, in any order
that Secured Party may designate.  Debtor makes this waiver for
itself, for all persons and entities claiming through or under Debtor
and for all persons and entities who may acquire a lien on all or any
part of the Premises or the property described in the Other Security
Documents, or on any interest therein.




Bedford (CA)
19806.311

             ENVIRONMENTAL INDEMNIFICATION AGREEMENT

    THIS ENVIRONMENTAL INDEMNIFICATION AGREEMENT ("Agreement"), made
and entered into as of July 27, 2000 by BEDFORD PROPERTY INVESTORS,
INC., a Maryland corporation (the "Borrower" or "Indemnitors"), to and
for the benefit of SECURITY LIFE OF DENVER INSURANCE COMPANY, a
Colorado corporation (the "Lender").

                       W I T N E S S E T H:

    WHEREAS, Borrower is the owner of certain real property situated
in San Mateo, Napa, and Alameda County, State of California, as more
particularly described on Exhibit "A" attached hereto and made a part
hereof (such real property, together with any additional real property
hereafter encumbered by the lien of the Deed of Trust (as defined
below), and all improvements now or hereafter located thereon and all
rights and interests of Borrower therein, are hereinafter referred to
as the "Premises"); and

    WHEREAS, Lender is about to make a loan to Borrower in the
original principal amount of TWENTY-THREE MILLION FOUR HUNDRED FIFTEEN
THOUSAND AND NO/100 DOLLARS ($23,415,000) (the "Loan") to be evidenced
by a Promissory Note dated on or about this same date (as the same may
be amended, modified, supplemented or extended from time to time, the
"Note"); and

    WHEREAS, the Note will be secured by a certain Deed of Trust,
Security Agreement, Financing Statement and Fixture Filing of even
date herewith, from Borrower to Lender (as the same may be amended,
modified, supplemented or extended from time to time, the "Deed of
Trust"); and

    WHEREAS, as a condition to making the Loan, Lender requires that
Indemnitors provide certain indemnities; and

    WHEREAS, to induce Lender to make the Loan, Indemnitors have
agreed to provide such indemnities.

    NOW THEREFORE, in consideration of the foregoing recitals and
other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, and intending to be legally bound
hereby, Indemnitors hereby covenant and agree as follows:

    1.   Definitions.  For purposes of this Agreement, the following
definitions shall apply:

    (a)  The term "Environmental Law" means and includes any federal,
state or local law, statute, regulation or ordinance pertaining to
health, industrial hygiene or the environmental or ecological
conditions on, under or about the Premises, including without
limitation each of the following (and their respective successor
provisions):  the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, 42 U.S.C. sections 9601 et seq.
("CERCLA"); the Resource Conservation and Recovery Act of 1976, as
amended, 42 U.S.C. sections 6901 et seq. ("RCRA"); the Federal
Hazardous Materials Transportation Act, as amended, 49 U.S.C. sections
1801 et seq.; the Toxic Substance Control Act, as amended, 15 U.S.C.
sections 2601 et seq.; the Clean Air Act, as amended, 42 U.S.C.
sections 1857 et seq.; the Federal Water Pollution Control Act, as
amended, 33 U.S.C. sections 1251 et seq.; and the rules, regulations
and ordinances of the U.S.  Environmental Protection Agency and of all
other federal, state, county and municipal agencies, boards,
commissions and other governmental bodies and officers having
jurisdiction over the Premises or the use or operation of the
Premises.

    (b)  The term "Hazardous Substance" means and includes:  (i)
those substances included within the definitions of "hazardous
substances", "hazardous materials", "hazardous waste", "pollutants",
"toxic substances" or "solid waste" in any Environmental Law; (ii)
those substances listed in the U.S. Department of Transportation Table
or amendments thereto (49 CFR 172.101) or by the U.S. Environmental
Protection Agency (or any successor agency) as hazardous substances
(40 CFR Part 302 and any amendments thereto); (iii) those other
substances, materials and wastes which are or become, regulated under
any applicable federal, state or local law, regulation or ordinance or
by any federal, state or local governmental agency, board, commission
or other governmental body, or which are or become classified as
hazardous or toxic by any such law, regulation or ordinance; and (iv)
any material, waste or substance which is any of the following: (1)
asbestos; (2) polychlorinated biphenyl; (3) designated or listed as a
"hazardous substance" pursuant to section 311 or section 307 of the
Clean Water Act (33 U.S.C. sections 1251 et seq.); (4) explosive; (5)
radioactive; (6) a petroleum product; or (7) infectious waste.
Notwithstanding anything to the contrary herein, the term "Hazardous
Substance" shall not include commercially sold products  otherwise
within the definition of the term "Hazardous Substance", but (A) which
are used or disposed of by Borrower or used or sold by tenants of the
Premises in the ordinary course of their respective businesses, (B)
the presence of which product is not prohibited by applicable
Environmental Law, and (C) the use and disposal of which  are in all
respects in accordance with applicable Environmental Law.

    (c)  The term "Enforcement or Remedial Action" means and includes
any action taken by any person or entity in an attempt or asserted
attempt to enforce, to achieve compliance with, or to collect or
impose assessments, penalties, fines, or other sanctions provided by,
any Environmental Law.

    (d)  The term "Environmental Liability" means and includes any
claim, demand, obligation, cause of action, accusation, allegation,
order, violation, damage (including consequential damage), injury,
judgment, assessment, penalty, fine, cost of Enforcement or Remedial
Action, or any other cost or expense whatsoever, including reasonable
attorneys' fees and disbursements, resulting from or arising out of
the violation or alleged violation of any Environmental Law, any
Enforcement or Remedial Action, or any alleged exposure of any person
or property to any Hazardous Substance.

    2.   Indemnity.  Indemnitors agree to defend, indemnify and hold
harmless Lender, its directors, officers, employees, agents,
contractors, sub-contractors, licensees, invitees, participants,
successors and assigns, from and against any Environmental Liability
and any and all claims, demands, judgments, settlements, damages,
actions, causes of action, injuries, administrative orders, consent
agreements and orders, liabilities, penalties, costs, including but
not limited to any cleanup costs, remediation costs and response
costs, and all expenses of any kind whatsoever including reasonable
attorneys' fees and expenses, including but not limited to those
arising out of loss of life, injury to persons, property or business
or damage to natural resources in connection with the activities of
Borrower, its predecessors in interest, third parties who have
trespassed on the Premises or parties in a contractual relationship
with Borrower, and any of them, the foregoing being collectively
referred to as "Claims", which:

    (a)  arise out of the actual, alleged or threatened migration,
spill, leaching, pouring, emptying, injection, discharge, dispersal,
release, storage, treatment, generation, disposal or escape of any
Hazardous Substances onto or from the Premises; or

    (b)  actually or allegedly arise out of, in connection with the
Premises, the use, specification or inclusion of any product, material
or process containing Hazardous Substances, in the soil, air, surface
water or ground water, or the performance of or failure to perform the
abatement of any Hazardous Substances source or the replacement or
removal of any soil, water, surface water or ground water containing
any Hazardous Substances; or

    (c)  arise out of the breach of any covenant, warranty or
representation set forth in Exhibit B attached hereto and incorporated
herein; or

    (d)  arise out of any Enforcement or Remedial Action or any
judicial or administrative action brought pursuant to any
Environmental Law.

Indemnitors, their successors and assigns, shall bear, pay and
discharge when and as the same become due and payable, any and all
such judgments or claims for damages, penalties or otherwise against
Lender described in this Section 2, shall hold Lender harmless for
those judgments or claims, and shall assume the burden and expense of
defending all suits, administrative proceedings, and negotiations of
any description with any and all persons, political subdivisions or
government agencies arising out of any of the occurrences set forth in
this Section 2.

    3.   Incorporation of Covenants, Warranties, Representations and
Agreements.  The covenants, warranties, representations and agreements
of Indemnitors set forth in any certificate, report, exhibit or
document furnished by Indemnitors to Lender pursuant to or in
connection with the Loan are hereby incorporated herein and made a
part hereof, with the same force and effect as if set forth fully in
this Agreement.

    4.   Survival.  Indemnitors' indemnifications and representations
made herein shall survive any termination or expiration of the
documents evidencing or securing the Loan and/or the repayment of the
indebtedness evidenced by the Note, including, but not limited to, any
foreclosure on the Deed of Trust or acceptance of a deed in lieu of
foreclosure; it being understood and agreed that the indemnity given
herein is independent of the secured indebtedness and the documents
evidencing or  securing the Loan.  Notwithstanding the foregoing,
Indemnitors' indemnifications and representations shall not extend to
Hazardous Substances  which first originate on the Premises subsequent
to Lender's succession to title by virtue of a foreclosure or
acceptance of a deed in lieu of foreclosure.

    5.   Notices To Lender. Each Indemnitor shall provide Lender with
prompt oral and written notice upon (a) such Indemnitor becoming aware
of any release or threat of release of any Hazardous Substances upon,
under or from the Premises or any land immediately adjacent to the
Premises, (b) such Indemnitor's receipt of any complaint, order,
citation or notice from any federal, state, municipal or other
governmental agency or authority in connection with any Hazardous
Substances located upon or under or emanating from the Premises, (c)
such Indemnitor obtaining knowledge of the incurring of any expense by
any governmental agency or authority in connection with the
assessment, containment or removal of any Hazardous Substances located
upon or under or emanating from the Premises or any land immediately
adjacent to the Premises, and (d) such Indemnitor's discovery of any
occurrence or condition on any real property adjoining or in the
vicinity of the Premises that could cause the Premises or any part
thereof to be classified as "border-zone property" under the
provisions of California Health and Safety Code, Sections 25220 et
seq. or any regulation adopted in accordance therewith; and
Indemnitors shall timely and diligently comply with all their
obligations under any Environmental Law with regard to such release,
complaint or expense.

    6.   Remedial Work.  If any investigation, site monitoring,
containment, cleanup, removal, restoration or other remedial work of
any kind or nature (the "Remedial Work") is necessary, both as
determined by an independent environmental consultant selected by
Lender under any applicable federal, state or local law, regulation or
ordinance, or under any judicial or administrative order or judgment,
or by any governmental person, board, commission or agency, because of
or in connection with the current or future presence, suspected
presence, release or suspected release of a Hazardous Substance into
the air, soil, groundwater, or surface water at, on, about, under or
within the Premises or any portion thereof, Indemnitors shall within
thirty (30) days after written demand by Lender for the performance
(or within such shorter time as may be required under applicable law,
regulation, ordinance, order or agreement), commence and thereafter
diligently prosecute to completion all such Remedial Work to the
extent required by law.  All Remedial Work shall be performed by
contractors approved in advance by Lender (which approval in each case
shall not be unreasonably withheld or delayed) and under the
supervision of a consulting engineer approved in advance by Lender.
All costs and expenses of such Remedial Work (including without
limitation the reasonable fees and expenses of Lender's counsel)
incurred in connection with monitoring or review of the Remedial Work
shall be paid by Indemnitors.  If Indemnitors shall fail or neglect to
timely commence or cause to be commenced, or shall fail to diligently
prosecute to completion, such Remedial Work, Lender may (but shall not
be required to) cause such Remedial Work to be performed; and all
costs and expenses thereof, or incurred in connection therewith
(including, without limitation, the reasonable fees and expenses of
Lender's counsel), shall be paid by Indemnitors to Lender forthwith
after demand and shall be paid to Lender by Indemnitors upon demand.

    7.   Operations and Maintenance Programs.  If recommended by any
environmental report, assessment or audit of the Premises, Indemnitors
shall establish and comply with an operations and maintenance program
with respect to the Premises, in form and substance reasonably
acceptable to Lender, prepared by an environmental consultant
reasonably acceptable to Lender, which program shall address any
asbestos containing material or lead based paint that may now or in
the future be detected at or on the Premises.  Without limiting the
generality of the preceding sentence, Lender may require (a) periodic
notices or reports to Lender in form, substance and at such intervals
as Lender may specify, (b) an amendment to such operations and
maintenance program to address changing circumstances, laws or other
matters, (c) at Lender's sole expense, supplemental examination of the
Premises by consultants specified by Lender, (d) access to the
Premises by Lender, its agents or servicer, to review and assess the
environmental condition of the Premises and Indemnitor's compliance
with any operations and maintenance program, and (e) variation of the
operations and maintenance program in response to the reports provided
by any such consultants.

    8.   Joint and Several Obligations.  The obligations of
Indemnitors hereunder shall be the joint and several obligations of
Indemnitors, and the representations, warranties, covenants and
agreements of Indemnitors shall be the joint representations,
warranties, covenants and agreements of Indemnitors.

    9.   Notices. (a)  All notices, demands, requests, and other
communications desired or required to be given hereunder  ("Notices"),
shall be in writing and shall be given by: (i) hand delivery to the
address for Notices; (ii) delivery by overnight courier service to the
address for Notices; or (iii) sending the same by United States mail,
postage prepaid, certified mail, return receipt requested, addressed
to the address for Notices.

    (b)  All Notices shall be deemed given and effective upon the
earlier to occur of: (i) the hand delivery of such Notice to the
address for Notices; (ii) one business day after the deposit of such
Notice with an overnight courier service by the time deadline for next
day delivery addressed to the address for Notices; or (iii) three
business days after depositing the Notice in the United States mail,
postage prepaid, as set forth in (a)(iii) above.  All Notices shall be
addressed to the following addresses:

   Indemnitors:    Bedford Property Investors, Inc.
                   270 Lafayette Circle
                   Lafayette, CA 94549
                   Attn:  Chief Financial Officer

        Lender:    Security Life of Denver Insurance Company
                   c/o ING Investment Management LLC
                   5780 Powers Ferry Road, NW, Suite 300
                   Atlanta, Georgia  30327-4349
                   Attention: Mortgage Loan Servicing Department

                             and

                   ING Investment Management LLC
                   5780 Powers Ferry Road, NW, Suite 300
                   Atlanta, Georgia  30327-4349
                   Attention:  Real Estate Law Department



With a copy to:    Nyemaster, Goode, Voigts, West,
                   Hansell & O'Brien, P.C.
                   700 Walnut, Suite 1600
                   Des Moines, Iowa 50309

or to such other persons or at such other place as any party hereto
may by Notice designate as a place for service of Notice.  Provided,
that the "copy to" Notice to be given as set forth above is a courtesy
copy only; and a Notice given to such person is not sufficient to
effect giving a Notice to the principal party, nor does a failure to
give such a courtesy copy of a Notice constitute a failure to give
Notice to the principal party.

    10.  General.

    (a)  Effect.  This Agreement (i) shall become effective on the
date hereof and (ii) shall, together with the Loan Documents (as
defined in the Deed of Trust), represent the complete understanding
between or among the parties hereto as to the subject matter hereof,
and supersede all prior written, and all oral, negotiations,
representations, guaranties, warranties, promises, statements or
agreements between or among the parties hereto as to the same.  No
determination by any court, governmental body or otherwise that any
provision hereof is invalid or unenforceable in any instance shall
affect the validity or enforceability of (i) any other provision
hereof, or (ii) such provision in any circumstance not controlled by
such determination.  Each such provision shall be valid and
enforceable to the full extent allowed by, and be construed wherever
possible as being consistent with, applicable law.

    (b)  Amendment.  This Agreement may be amended by and only by an
instrument executed and delivered by each party hereto.

    (c)  Applicable Law.  This Agreement shall be given effect and
construed by application of the law (without regard to the principles
thereof governing conflicts of law) of California, and any action or
proceeding arising hereunder shall be brought in the courts of
California, except that if any such action or proceeding arises under
the constitution, laws or treaties of the United States of America, or
if there is a diversity of citizenship between the parties thereto, so
that it is to be brought in a United States District Court, it shall
be brought in the United States District Court for the federal
judicial district in which the Premises is located.

    (d)  Construction.  As used herein, (i) the term "person" means a
natural person, a trustee, a corporation, a partnership, a limited
liability company and any other form of legal entity; and (ii) all
references made (1) in the neuter, masculine or feminine gender shall
be deemed to have been made in all such genders, (2) in the singular
or plural number shall be deemed to have been made, respectively, in
the plural or singular number as well, (3) to the "Indemnitors" shall
be deemed to refer to each person who is a signatory hereto and its
respective heirs, personal representatives, successors and assigns,
and (4) to any section, subsection, paragraph or subparagraph shall,
unless therein expressly indicated to the contrary, be deemed to have
been made to such section, subsection, paragraph or subparagraph of
this Agreement.  The headings of the sections, subsections, paragraphs
and subparagraphs hereof are provided herein for and only for
convenience of reference, and shall not be considered in construing
their contents.  Each, if any, writing referred to herein as being
attached hereto as an exhibit or otherwise designated herein as an
exhibit hereto is hereby made a part hereof.

    (e)  Assignment.  This Agreement shall be binding on and shall
inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and assigns hereunder.

    (f)  Time of Essence.  Time shall be of the essence in the
performance of this Agreement.

    (g)  Liability.  The Indemnitors shall be jointly and severally
liable for adhering to the terms and satisfying the conditions hereof.
Notwithstanding the terms of any other agreement evidencing or
securing the Loan, the liability of the Indemnitors hereunder is not
limited to the Premises and is not secured thereby, and Lender shall
have full recourse to any and all assets of the Indemnitors with
respect to any claim hereunder.

    (h)  Independent and Unsecured Obligations.  Indemnitors
acknowledge that, notwithstanding any other provision of this
Agreement or any of the loan documents related to the Note ("Loan
Documents") to the contrary (including, without limitation, any non-
recourse provision under the Loan Documents) the obligations of
Indemnitors under this Agreement are unlimited personal obligations of
Indemnitors which are not secured by the Deed of Trust or any other
security instrument.  In this regard, Lender's appraisal of the value
of the Premises is such that Lender is not willing to accept the
consequences, under California's "One Form of Action" Rule (i.e.,
Section 726 of the Code of Civil Procedure) and "Anti-Deficiency
Rules" (i.e., Sections 580(a), 580(b) and 580(d) of the Code of Civil
Procedure) by inclusion of this Indemnity among the obligations
secured by the Deed of Trust.  Indemnitors acknowledge that Lender is
unwilling to accept such consequences and that Lender would not make
the Loan but for the personal unsecured liability undertaken by
Indemnitors.

    (i)  Attorneys' Fees.  Indemnitors shall pay on demand all costs
and expenses incurred by Lender or Trustee in enforcing or protecting
its rights and remedies hereunder, including, but not limited to,
reasonable attorneys' fees and legal expenses.

    (j)  Legal Effect.  Indemnitors and Lender agree that: (a) this
Agreement is intended as Lender's written request for information and
Indemnitors' response concerning the environmental condition of the
real property security as required by California Code of Civil
Procedure Section 726.5 and (b) each provision in this Agreement
(together with any indemnity applicable to a breach of any such
provision) with respect to the environmental condition of the real
property security is intended by Lender and Indemnitors to be an
"environmental provision" for purposes of California Code of Civil
Procedure Section 736, and as such it is expressly understood that
Indemnitors' duty to indemnify Lender hereunder shall survive: (i) any
judicial or non-judicial foreclosure under the Deed of Trust, or
transfer of the Premises in lieu thereof; (ii) the release and
conveyance or cancellation of the Deed of Trust; and (iii) the
satisfaction of all Indemnitors' obligations under the Loan Documents.

    (k)  Waiver of Jury Trial.  THE PARTIES HERETO, AFTER CONSULTING
OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN ANY
LITIGATION BASED ON OR ARISING OUT OF THIS AGREEMENT OR INSTRUMENT, OR
ANY RELATED INSTRUMENT OR AGREEMENT, OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS,
WHETHER ORAL OR WRITTEN, OR ACTION OF ANY PARTY HERETO.  NO PARTY
SHALL SEEK TO CONSOLIDATE BY COUNTERCLAIM OR OTHERWISE, ANY SUCH
ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.  THESE PROVISIONS
SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY ANY PARTY HERETO EXCEPT BY A WRITTEN INSTRUMENT
EXECUTED BY ALL PARTIES.


<PAGE>
    WITNESS the due execution of this Agreement as of the day and
year first above written.

                             BEDFORD PROPERTY INVESTORS, INC., a
                             Maryland corporation


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





STATE OF CALIFORNIA          )
                        )SS.
COUNTY OF _______________)

    On ___________________, 2000, before me, __________________
personally appeared Hanh Kihara, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that she
executed the same in her authorized capacity, and that by her
signature on the instrument the person, or the entity upon behalf of
which person acted, executed the instrument.

    Witness my hand and official seal.

                                  ____________________________
                                  Notary

                                  (Seal)

<PAGE>
                           EXHIBIT "A"
                       LEGAL DESCRIPTION

Parcel I - 410 Allerton, South San Francisco, San Mateo County,
California;

Parcel II - 301, 311 and 325 Grand Avenue, South San Francisco, San
Mateo County, California;

Parcel III - 901 Kaiser Road, Napa, Napa County, California;

Parcel IV - 840-940 Auburn Court, Fremont, Alameda County, California;

Parcel V - 6500 Kaiser Drive, Fremont, Alameda County, California; and

Parcel VI - 45713 and 47533 Westinghouse Drive, Fremont, Alameda
County, California
<PAGE>
                           EXHIBIT "B"

          Indemnitors' Hazardous Substances Covenants,
                  Warranties and Representations

1.  To the current and actual knowledge of Indemnitors' officers,
    Indemnitors, after reasonable inquiry, represent, warrant and
    covenant that,

    A.   Except in accordance with applicable law, no Hazardous
         Substances have been, or shall be discharged, disbursed,
         released, stored, treated, generated, disposed of or allowed
         to escape or migrate, or shall threaten to be injected,
         emptied, poured, leached or spilled (collectively referred
         to as a "release") on or from the Premises.

    B.   Except with respect to floor tile at the Parcels of the
         Premises at 410 and at 301, 311 and 325 East Grand and
         except in accordance with applicable law, no asbestos or
         asbestos-containing materials have been or will be
         installed, used, incorporated into, placed on or disposed of
         on the Premises.

    C.   No polychlorinated biphenyls ("PCBs") are or will be located
         on or in the Premises, in the form of electrical
         transformers, fluorescent light fixtures with ballasts,
         cooling oils or any other device.

    D.   No underground storage tanks are or will be located on the
         Premises or were located on the Premises and subsequently
         removed or filled.

    E.   No investigation, administrative order, consent order and
         agreement, litigation, settlement, lien or encumbrance with
         respect to Hazardous Substances is proposed, threatened in
         writing, anticipated or in existence with respect to the
         Premises.

    F.   The Premises and Indemnitors' operations at the Premises are
         in compliance in all material respects with all applicable
         Environmental Laws including without limitation any federal,
         state and local statutes, laws and regulations.  No notice
         has been received by any Indemnitor, or any affiliate or
         subsidiary of any Indemnitor, from any entity, government
         body or individual claiming any violation of any law,
         regulation ordinance or code, or requiring compliance with
         any law, regulation, ordinance or code, or demanding payment
         or contribution for environmental damage or injury to
         natural resources.  Copies of any such notices received
         after the date hereof shall be forwarded to Lender within
         three (3) days of their receipt.

    G.   Except as set forth on the Phase I environmental studies for
         the properties, copies of which have been provided to
         Lender, Indemnitors have no knowledge of any release or
         threat of release of any Hazardous Substances from any land
         adjoining or within one-half mile of the Premises.

    H.   No portion of the Premises is a wetland or other water of
         the United States subject to jurisdiction under Section 404
         of the Clean Water Act (33 U.S.C. 1344) or any comparable
         state or local ordinance or regulation defining or
         protecting wetlands or other special aquatic areas.

    I.   There are no concentrations of radon or other radioactive
         gases or materials in any buildings or structures on the
         Premises that exceed background ambient air levels.

    J.   To the best of Indemnitors' knowledge, there have been no
         complaints of illness or sickness alleged to have resulted
         from conditions inside any buildings or structures on the
         Premises.

2.  To the extent any provision in Section 1 is a covenant, failure
    to comply with any such provision in Section 1 of this Exhibit
    "B", shall be deemed to be an Event of Default under the Deed of
    Trust described in the Environmental Indemnification Agreement to
    which this Exhibit "B" is attached.





Bedford (CA)
19806.311
                     CERTIFICATE OF BORROWER

    THIS CERTIFICATE is made as of July 27, 2000, by BEDFORD PROPERTY
INVESTORS, INC., a Maryland  corporation("Borrower"), in order to
induce SECURITY LIFE OF DENVER INSURANCE COMPANY, a Colorado
corporation (the "Lender"), to fund a loan (the "Loan") evidenced by a
Promissory Note in the principal amount of TWENTY-THREE MILLION FOUR
HUNDRED FIFTEEN THOUSAND AND NO/100 DOLLARS ($23,415,000) dated on or
about this same date (the "Note") and secured by a Deed of Trust,
Security Agreement, Financing Statement and Fixture Filing among
Borrower as Trustor, and Lender as Beneficiary (the "Deed of Trust"),
encumbering property located in San Mateo, Napa, and Alameda County,
California, more particularly described in Exhibit "A" attached
thereto (the "Premises").

    The undersigned hereby represents and warrants as of the date of
this Certificate as follows:

    1.   General Representations and Warranties.

    1.1  The undersigned holds the position with Borrower set forth
below, and is duly authorized to make this Affidavit for and on behalf
of Borrower.

    1.2  The principal office of the Borrower is located at 270
Lafayette Circle, Lafayette, California 94549.

    1.3  On prior occasion Borrower delivered to Lender true, correct
and complete copies of the organizational documents of the Borrower,
together with all restatements, amendments and modifications thereto,
which are true, correct and complete as of the date hereof.

    1.4  The consent of all of the equity owners of or holders of
beneficial interest in Borrower, that are required to consent, has
been obtained to authorize the Borrower to borrow and/or establish
with the Lender a loan in the principal amount of TWENTY-THREE MILLION
FOUR HUNDRED FIFTEEN THOUSAND AND NO/100 DOLLARS ($23,415,000), upon
such terms as the Borrower may deem advisable and all equity owners of
or holders of beneficial interest in the Borrower that are required to
do so have authorized the execution and delivery, for and on behalf of
the Borrower, in connection with the Loan, of a Promissory Note in the
amount of the Loan, a Deed of Trust, Security Agreement, Financing
Statement and Fixture Filing (the "Deed of Trust"), an Environmental
Indemnification Agreement, Financing Statements, an Assignment of
Rents and Leases, a Security Agreement and such other documents and
certificates relating to the Loan as may be required by the Lender
(collectively, the "Loan Documents"), by the person or persons
executing the same.

    1.5  Each of the Loan Documents previously made or effected by
the Borrower and delivered to the Lender in connection with the Loan,
if any, have been ratified and confirmed by all equity owners of or
holders of beneficial interest in the Borrower that are required to so
ratify and confirm.

    1.6  The Borrower is a real estate investment trust duly
organized, validly existing and in good standing under the laws of
Maryland and is licensed or qualified to do business and is in good
standing in each jurisdiction in which the character of the properties
owned by it therein or in which the transaction of its business makes
such qualification necessary.

    1.7  The Borrower (a) is in compliance in all material respects
with all laws and legal requirements applicable to it, and (b) has all
requisite power and authority and all necessary licenses and permits
to own and operate the Premises and to carry on its business as now
being conducted and has the necessary power and authority to execute
and deliver the Loan Documents and to incur and perform the
obligations provided for herein and therein (including the borrowing
of the Loan), all of which have been duly authorized by all proper and
necessary action.  No consent or approval of any other person or
public authority or regulatory body is required as a condition to the
validity or enforceability of the Deed of Trust or any of the other
Loan Documents, or if required the same has been duly obtained.

    1.8  There is no litigation or proceeding pending, or to the
knowledge of the undersigned threatened, against or affecting the
Borrower or the Premises in any court or administrative agency or
before any governmental authority or arbitration board or tribunal
(whether federal, state, local or municipal) having jurisdiction over
the Premises which, if adversely determined would materially and
adversely affect the Premises, business, prospects, profits or
condition (financial or otherwise) of the Borrower or  the authority
of the Borrower to enter into, or the ability of the Borrower to
perform its obligations under, the Loan Documents, or which, in any
way, could adversely affect the validity or enforceability of the Loan
Documents.

    1.9  (a) The execution and delivery by the Borrower of the Loan
Documents and compliance by the Borrower  with all of the provisions
thereof (i) are within the power of the Borrower, and (ii) will not
conflict in any material respect with or result in any violation of,
breach of any of the provisions of, or constitute a default under, or
result in the creation of any lien, charge or encumbrance other than
upon the Premises, under the provision of, any agreement, partnership
agreement, operating agreement or other instrument to which Borrower
is a party or by which the Borrower or the Premises may be bound, or
any applicable license, judgment, decree, or other Laws applicable to
the Borrower or the Premises; and (b) the Loan Documents are valid and
binding obligations of the Borrower enforceable against the Borrower
in accordance with their respective terms, subject to bankruptcy laws,
laws affecting creditors rights generally and general principles of
equity.

    1.10 Neither the Borrower nor any of its respective businesses or
the Premises, nor any relationship between the Borrower or any other
person, nor any circumstances in connection with the execution,
delivery and performance by the Borrower of the Loan Documents, is
such as to require the consent, approval or authorization of, or the
filing, registration or qualification with, any governmental authority
on the part of the Borrower, other than those already obtained, made
or done.

    1.11 The Borrower (a) is the owner of good and marketable fee
simple legal title to and is lawfully seized and possessed of the
Premises, free and clear of all liens, encumbrances or restrictions,
except for permitted encumbrances previously approved by Lender and
(b) subject only to such permitted encumbrances, has the unconditional
right to encumber the Premises by the Deed of Trust.  The Borrower
does hereby warrant generally and agree to defend the Premises and the
title thereto, whether now owned or hereafter acquired, and the lien,
operation and effect of the Deed of Trust thereon against all claims
and demands by any person.  The Borrower represents and warrants that
it has complied in all material respects, and shall comply in all
material respects at all times until the Indebtedness is paid in full,
with each of the covenants, restrictions and conditions imposed by
each instrument or matter to which the Premises is subject, including
but not limited to, each instrument and matter contained within such
permitted encumbrances.

    1.12 At the time of the execution and delivery of the Deed of
Trust, no event has occurred and no condition exists with respect to
the Borrower, or the Premises that constitutes an Event of Default
under the Deed of Trust or the other Loan Documents or which, with the
lapse of time or with the giving of notice or both, would become an
Event of Default under the Deed of Trust or any of the other Loan
Documents.  The Borrower is not in default with respect to any order
of any court, or other governmental authority or in violation in any
material respect of any agreement, partnership or operating agreement
or other instrument to which it is a party or by which it may be
bound.

    1.13 Neither the Deed of Trust nor any other Loan Document
furnished by the Borrower in connection with the Loan contains any
untrue or misleading statement of a material fact or omits to state
any material fact necessary in order to make the statements contained
therein not misleading.  There is no fact which the Borrower has not
disclosed to the Lender in writing which materially and adversely
affects, nor, so far as the Borrower can now reasonably foresee, is
reasonably likely to affect, materially and adversely the business, or
the operation and use of the Premises, or the performance by the
Borrower under the Loan Documents.

    1.14 There are on the Premises at least a sufficient number of
parking spaces to meet the minimum parking ratio of any applicable
laws and each Lease.

    1.15 Borrower is not a "foreign person" within the meaning of the
Internal Revenue Code of 1986, as amended, Sections 1445 and 7701
(that is, Borrower is not a non-resident alien, foreign corporation,
foreign partnership, foreign trust or foreign estate as those terms
are defined therein and in any regulations promulgated thereunder).

    1.16 Borrower's Taxpayer Identification Number is 68-0306514.

    2.   Leases

    2.1  The rent roll ("Rent Roll") previously submitted by the
Borrower to the Lender is true, accurate and complete in all material
respects.

    2.2  The liability of the Borrower for the return of tenants'
security deposits and interest thereon is accurately set forth on the
Rent Roll.

    2.3  Each of the Leases for the Premises submitted by the
Borrower to the Lender is true, accurate and complete, there are no
amendments or modifications thereto except as indicated on the Rent
Roll or as otherwise provided to Lender, and such Leases constitute
all of the Leases which cover any portion of the Premises.

    2.4  Each of the Leases for the Premises is in full force and
effect, no default with respect to any Lease has been declared by any
party thereto and the undersigned has no knowledge of any facts or
circumstances which she might reasonably believe would give rise to a
default by any party thereto.

    2.5  Except as expressly set forth on the Rent Roll, each tenant
under the Leases is in occupancy as of the date hereof, and is paying
rent on a current basis with no right to any rental offsets or claims,
and no rent has been prepaid other than as permitted under the terms
of the lease.

    3.   Contracts

    3.1  There are no material contracts, management agreements, or
other agreements affecting the Premises except as previously described
by Borrower to Lender in writing.


    4.   Bankruptcy

    4.1  Borrower has not received notice that any of its creditors
has filed a petition with respect to the Borrower  pursuant to the
Federal Bankruptcy Code or any similar federal, state or other law.

    4.2  Borrower has not (a) applied for or consented in writing to
the appointment of a receiver, trustee or liquidator of the Borrower
or of any or all of the Premises, or of all or substantially all of
the other assets of the Borrower or (b) filed a voluntary petition in
bankruptcy or admitted in writing its inability to pay its debts as
they become due, or (c) made a general assignment for the benefit of
creditors, or (d) filed a petition or an answer seeking a
reorganization or an arrangement with creditors or to take advantage
of any insolvency law, or (e) filed an answer admitting the material
allegations of a petition filed against the Borrower,  in any
bankruptcy, reorganization or insolvency proceeding, or (f)
transferred by merger, sale, consolidation, assignment, operation of
law, or otherwise all or substantially all of the assets of the
Borrower.

    4.3  No (a) execution or attachment has been levied against any
or all of the Premises, or (b) order, judgment or decree has been
entered by any court of competent jurisdiction on the application of a
creditor adjudicating the Borrower a bankrupt or insolvent or
appointing a receiver, trustee or liquidator of substantially all of
the assets of the Borrower.

    5.   Financial Condition

    5.1  All balance sheets, statements of profit and loss, and other
financial data that have been given to the Lender with respect to the
Borrower : (a) are complete and correct in all material respects; (b)
accurately present the financial condition of the Borrower and the
results of its operations as of the dates and for the periods for
which the same have been furnished; (c) have been prepared in
accordance with generally accepted accounting principles consistently
applied, or on a cash basis or other recognized comprehensive basis,
throughout the periods covered thereby; and (d) disclose all known
liabilities, direct or contingent, as of their respective dates.

    5.2  There has been no adverse change in the business,
properties, condition (financial or otherwise) of Borrower and there
has been no change in the structure or ownership of said parties.  The
financial statements submitted to Lender in connection with the Loan
were true and correct in all material respects as of the date of
submission and remain true and correct in all material respects as of
the date hereof.

    5.3  All information, reports, papers, and data given to the
Lender with respect to the Borrower and representations and warranties
of the Borrower  contained in the Loan Documents are true, complete,
accurate and correct in all material respects as of the date hereof.

    6.   Subdivision; Separate Assessment; Zoning; Parking

    6.1  The Premises is covered by tax identification numbers which
do not include any  other property and may be leased, transferred or
mortgaged without the approval of any governmental authority having
jurisdiction to regulate or control subdivision or land development.
The Land is assessed separately from all other lands for purposes of
ad valorem taxation.  All requirements of every governmental authority
pertaining to the Land and the Improvements, including without
limitation zoning, have been complied with in all material respects.
The present zoning classification affecting the Premises permits the
present and intended use of the Land.  No variances, reliance on
adjacent property or special exception is required for the
Improvements.  If all or any part of the Improvements are damaged or
destroyed, the Improvements can, under presently applicable laws, be
legally reconstructed to their condition prior to such damage or
destruction, and thereafter exist without violating any zoning or
other ordinances presently applicable thereto and without the
necessity of obtaining any variances or other relief from local Laws.
Neither the zoning classification or any other right to construct, use
or operate any Improvements or the Land is in any way dependent upon
or related to any real estate other than the Land.  The Land contains
such parking spaces as are required by applicable law and by all
Leases or subleases of the Land.

    7.   Utility Services

    All utility services necessary for the ownership of the
Improvements and the operation thereof for their intended purpose are
available at the boundaries of the Land, including water supply and
sanitary and storm sewer facilities and gas, electric, telephone, and
cable facilities.

    8.   Flood Area: Filled Land

    8.1  The Premises is not in an "area of special flood hazard", as
that term is defined in the National Flood Insurance Act of 1968 (as
amended and supplemented by the Flood Disaster Protection Act of
1973).  No portion of the Premises consists of and no portion of the
Improvements will be located on filled in land.

    The Borrower (a) acknowledges that the Lender is acting in
reliance upon the representations and undertakings set forth herein,
and that such representations and undertakings are of a material
nature, and (b) agrees to indemnify and hold harmless the Lender
against and from any loss or expense (including, by way of example
rather than of limitation, that of reasonable attorneys' fees) which
it may suffer as a result of any inaccuracy contained in any of such
representations and warranties.  The indemnity herein is limited to
the extent set forth in the Note.

    Any capitalized terms used herein not otherwise defined herein,
shall have the meaning given to those terms in the Deed of Trust.

                             BEDFORD PROPERTY INVESTORS, INC., a
                             Maryland corporation


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





STATE OF CALIFORNIA          )
                        )SS.
COUNTY OF _______________)

    On ___________________, 2000, before me, __________________
personally appeared Hanh Kihara, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that she
executed the same in her authorized capacity, and that by her
signature on the instrument the person, or the entity upon behalf of
which person acted, executed the instrument.

    Witness my hand and official seal.

                                  ____________________________
                                  Notary

                                  (Seal)