SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549

                            FORM 10-Q


 x   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934 for the quarter ended September 30, 1998.

___  Transition Report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934 for the transition period from
     ________________ to _______________.

                  Commission File Number 1-12222

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


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


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


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



Indicate by check mark whether Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months or for such shorter period
that Registrant was required to file such reports and (2) has been
subject to such filing requirements for the past 90 days.  Yes  x   No___

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


           Class                             Outstanding as of October 30, 1998
Common Stock, $0.02 par value                               22,655,028 
                                                                    
<PAGE>
                 BEDFORD PROPERTY INVESTORS, INC.

                              INDEX



PART I.  FINANCIAL INFORMATION                            Page

ITEM 1.  FINANCIAL STATEMENTS

Statement                                                              1

Consolidated Balance Sheets as of September 30, 1998
and December 31, 1997                                                  2

Consolidated Statements of Income for the three and nine months ended 
September 30, 1998 and 1997                                            3

Consolidated Statements of Stockholders' Equity for the year ended 
December 31, 1997 and the nine months ended September 30, 1998         4

Consolidated Statements of Cash Flows for the nine months ended 
September 30, 1998 and 1997                                            5

Notes to Consolidated Financial Statements                             6-10



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS

Management's Discussion and Analysis of Results of Operations 
and Financial Condition                                                10-14


PART II.  OTHER INFORMATION

ITEMS 1 - 6                                                            15-16

SIGNATURES                                                             16

Exhibit 11                                                             17

Exhibit 27                                                             18-19
<PAGE>
                 BEDFORD PROPERTY INVESTORS, INC.


PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS



                            STATEMENT

The financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission.  The information furnished reflects
all adjustments which are, in the opinion of management, necessary for
a fair presentation of results of operations for the interim periods. 
Such adjustments are of a normal recurring nature.  These financial
statements should be read in conjunction with the notes to financial
statements appearing in the annual report to stockholders for the year
ended December 31, 1997.

                                <PAGE>
               BEDFORD PROPERTY INVESTORS, INC. 
                  CONSOLIDATED BALANCE SHEETS
  AS OF SEPTEMBER 30, 1998 AND DECEMBER 31, 1997 (Unaudited) 
      (in thousands, except share and per share amounts) 
 
                                      September 30, 1998      December 31, 1997
Assets: 

Real estate investments: 
  Industrial buildings                      $306,734                $237,184 
  Office buildings                           257,779                 170,948 
  Properties under development                17,555                  18,227
                                                      
  Land held for development                    5,176                   5,712

                                             587,244                 432,071 
   
  Less accumulated depreciation               15,782                   8,985 

                                             571,462                 423,086 
Cash                                           1,660                   1,361 
Other assets                                  14,734                   9,456 

                                            $587,856                $433,903 


Liabilities and Stockholders' Equity:

Bank loan payable                           $137,410                $  8,216 
Mortgage loans payable                        80,437                  60,323 
Accounts payable and accrued expenses          8,292                   6,026 
Dividend and distributions payable             7,505                   6,804 
Other liabilities                              4,474                   4,611 

    Total liabilities                        238,118                  85,980 
   
Minority interest in consolidated 
  partnership                                  1,369                   1,497 

Stockholders' equity:
 Common stock, par value $0.02 per share;
   authorized 50,000,000 shares; issued 
   and outstanding 22,655,028 shares in 
   1998 and 22,583,867 shares in 1997            453                     452 
 Additional paid-in capital                  408,623                 408,209 
 Accumulated dividends in
    excess of net income                     (60,707)                (62,235)
      Total stockholders' equity             348,369                 346,426 

                                            $587,856                $433,903 

See accompanying notes to consolidated financial statements.
<PAGE>
                BEDFORD PROPERTY INVESTORS, INC.
               CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
                          (Unaudited)
       (in thousands, except share and per share amounts)
<TABLE>
<S>                                                  <C>           <C>            <C>            <C>
                                                        Three Months                 Nine Months

                                                        1998          1997           1998           1997


Property operations:                                                    
   Rental income                                         $20,156       $12,789        $52,635        $32,472 
   Rental expenses:
        Operating expenses                                 3,322         1,973          7,925          4,996 
        Real estate taxes                                  1,704           993          4,393          2,708 
        Depreciation and amortization                      2,939         1,528          7,307          3,902 


Income from property operations                           12,191         8,295         33,010         20,866  

General and administrative expenses                         (655)         (469)        (2,369)        (1,586)
Interest income                                               85            73            178            217 
Interest expense                                          (3,664)       (2,877)        (7,480)        (5,909)


Income before minority interest and gain on sale           7,957         5,022         23,339         13,588 

Gain on sale                                                -           10,787           -            10,787  
Minority interest                                            (29)          (28)           (86)           (79) 


Net income                                              $  7,928       $15,781        $23,253        $24,296 


Net income applicable to
 common stockholders                                    $  7,928       $14,531        $23,253        $20,796 


Basic earnings per share                                $   0.35       $  1.30        $  1.03        $  2.00 


Weighted average number of shares-basic               22,649,403    11,158,953     22,616,558     10,416,729


Earnings per common share - assuming          
   dilution                                             $   0.35       $  1.01        $  1.02        $  1.64 
            

Weighted average number of
   shares - assuming dilution                         22,926,125    15,698,133     22,934,296     14,905,299 
</TABLE>

See accompanying notes to consolidated financial statements.


                BEDFORD PROPERTY INVESTORS, INC. 
        CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY 
            FOR THE YEAR ENDED DECEMBER 31, 1997 AND
     THE NINE MONTHS ENDED SEPTEMBER 30, 1998 (Unaudited) 
           (in thousands, except per share amounts) 

<TABLE>
<S>                                      <C>         <C>             <C>             <C>
                                                                       Accumulated       Total
                                                      Additional         dividends      stock-
                                          Common         paid-in      in excess of    holders'
                                           stock         capital        net income      equity


Balance, December 31, 1996                 $ 131        $147,622         $(73,997)    $  73,756 

Issuance of common stock                     321         265,622             -          265,943 

Costs of issuance of common stock              -          (4,990)            -           (4,990)

Redemption of partnership units                -             (45)            -              (45)

Net income                                     -            -              31,291        31,291 

Dividends to common stockholders
 ($1.13 per share)                             -            -             (16,029)      (16,029)

Dividends to preferred stockholders            -            -              (3,500)       (3,500)


Balance, December 31, 1997                 $ 452        $408,209         $(62,235)     $346,426 

Issuance of common stock                       1             414             -              415 

Net income                                     -            -              23,253        23,253 

Dividends to common stockholders
 ($0.96 per share)                             -            -             (21,725)      (21,725)

Balance, September 30, 1998                $ 453        $408,623         $(60,707)     $348,369 
</TABLE>
 
See accompanying notes to consolidated financial statements. 

<PAGE>
                                
                                
                BEDFORD PROPERTY INVESTORS, INC.
             CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (Unaudited)
                         (in thousands)
                                

                                                          1998            1997 


Operating Activities:
  Net income                                            $23,253        $24,296
  Adjustments to reconcile net income to net cash 
     provided by operating activities:
    Minority interest                                        86             79
    Depreciation and amortization                         8,220          4,602 
    Gain on sale of real estate investments                -           (10,787)
    Change in other assets                               (6,035)        (3,126)
    Change in accounts payable and
      accrued expenses                                    2,780            840
    Change in other liabilities                            (137)           152

Net cash provided by operating activities                28,167         16,056


Investing Activities:
  Investments in real estate                           (155,687)      (155,687)
  Proceeds from sale of real estate investments            -            24,938 


Net cash used by investing activities                  (155,687)      (130,749)


Financing Activities:
  Proceeds from bank loan                               147,508        131,501 
  Proceeds from mortgage loan                            21,109           - 
  Repayments of bank loan                               (19,189)       (81,115)
  Repayments of mortgage loans                             (786)          (309)
  Proceeds from issuance of common stock                    415         75,619 
  Redemption of partnership units                          (128)          (257)
  Payment of dividends and distributions                (21,110)       (11,032)


Net cash provided by financing activities               127,819        114,407 


Net increase (decrease) in cash                             299           (286)
Cash at beginning of period                               1,361          1,328 


Cash at end of period                                 $   1,660      $   1,042 


Supplemental disclosure of cash flow information:
a)  Non cash investing and financing activities:
      Debt incurred with real estate acquired         $    -         $   8,972 

b)  Cash paid during the period for interest, 
    net of amounts capitalized
       $1,746 in 1998 and $404 in 1997                $   5,917      $   5,382 


See accompanying notes to consolidated financial statements.
                                
                                
                                
                                
                                
                BEDFORD PROPERTY INVESTORS, INC.
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                                
Note 1.  The Company and Basis of Presentation

The Company

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

Basis of Presentation

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

Per Share Data

Per share data are based on the weighted average number of common shares
outstanding during the year.  Stock options issued under the Company's
stock option plans are included in the calculation of diluted per share
data  if, upon exercise, they would have a dilutive effect.  The diluted
earnings per share calculation assumes conversion of the limited
partnership units of Bedford Realty Partners, L.P., if such conversions
would have dilutive effects, as of the beginning of the year. 
 
Recent Accounting Pronouncements

In June 1997, the FASB issued Financial Accounting Statement No. 130
(SFAS 130), Reporting Comprehensive Income.  SFAS 130 is effective with
the year-end 1998 financial statements; however, the total comprehensive
income is required in the financial statements for interim periods
beginning in 1998.  In June 1997, the FASB issued Financial Accounting
Standard No. 131, Disclosure About Segments of An Enterprise and Related
Information.  SFAS 131 is effective with the year-end 1998 financial
statements.  In February 1998, the FASB issued Financial Accounting
Standard No. 132, Employers Disclosures About Pensions and Other
Postretirement Benefits.  SFAS 132 is effective with the year-end 1998
financial statements.  In June 1998, the FASB issued Financial Accounting
Standard No. 133, Accounting for Derivatives Instruments and Hedging
Activities.  SFAS 133 is effective for fiscal quarters beginning after
June 15, 1998.  Management believes that the adoption of these statements
will not have a material impact on the Company's financial statements.

Note 2. Real Estate Investments

As of September 30, 1998, the Company's real estate investments were
diversified by property type as follows (dollars in thousands):

                                     Number of                      Percent
                                    Properties        Cost         of Total


Industrial buildings                        67      $306,734          52%
Office buildings                            23       257,779          44%
Properties under development                 8        17,555           3%
Land held for development                    6         5,176           1%


Total                                      104      $587,244         100%


<PAGE>
Note 2 - Real Estate Investments 
 
The following table sets forth the Company's real estate investments as
of September 30, 1998 (in thousands): 
<TABLE>
<S>                               <C>           <C>           <C>              <C>               <C>
                                                                                        Less 
                                                               Development       Accumulated
                                       Land      Building      In-Progress      Depreciation         Total

INDUSTRIAL BUILDINGS
Northern California                $ 49,049      $112,785      $    -           $ 5,358           $156,476
Southern California                  15,326        35,334           -             2,085             48,575
Denver, Colorado                      1,911         3,283           -               225              4,969
Arizona                              11,805        31,767           -             1,045             42,527
Greater Portland Area                 2,652         8,509           -               699             10,462
Greater Kansas City Area              3,917        16,427           -             1,083             19,261
Dallas, Texas                         2,978        10,991           -                80             13,889


Total Industrial                     87,638       219,096           -            10,575            296,159


SUBURBAN OFFICE BUILDINGS
Northern California                   6,022        17,407           -               538             22,891
Southern California                   7,312        18,109           -               686             24,735
Salt Lake City                          359         6,572           -               921              6,010
Greater Kansas City Area              3,330         5,440           -               299              8,471
Greater Seattle Area                 15,116        78,814           -             1,245             92,685
Reno, Nevada                          2,102        10,527           -               345             12,284
Austin, Texas                         2,766         7,089           -               209              9,646
Arizona                               9,148        17,133           -               460             25,821
Denver, Colorado                      5,559        44,974           -               504             50,029


Total Suburban Office                51,714       206,065           -             5,207            252,572


PROPERTIES UNDER DEVELOPMENT
Northern California                    -             -               862           -                   862
Arizona                                -             -            10,562           -                10,562
Greater Seattle Area                   -             -             6,131           -                 6,131


Total Properties Under Development     -             -            17,555           -                17,555


LAND HELD FOR DEVELOPMENT
Northern California                   2,142          -              -              -                 2,142
Southern California                   1,002          -              -              -                 1,002
Denver, Colorado                      1,845          -              -              -                 1,845
Dallas, Texas                           187          -              -              -                   187


Total Land Held for Development       5,176          -              -              -                 5,176


Total                              $144,528      $425,161        $17,555        $15,782           $571,462
</TABLE>
The Company internally manages all but 8 of its properties from its
regional offices in Lafayette, CA;  Tustin, CA; Phoenix, AZ; Lenexa, KS;
Denver, CO; and Seattle, WA.  For the 8 properties located in markets not
served by a regional office, the Company has subcontracted on-site
management to local firms.  All financial record-keeping is centralized
at the Company's corporate office in Lafayette, CA.

The Company has remaining construction commitments of $5.9 million at
September 30, 1998 relating to three of its properties under development. 

<PAGE>
Note 3.  Consolidated Partnership

In December 1996 the Company formed Bedford Realty Partners, L.P. (the
"Operating Partnership"), with the Company as the sole general partner,
for the purpose of acquiring real estate.  In exchange for contributing
a property into the Operating Partnership, the owners of the property
received limited partnership units ("OP Units").  A limited partner can
seek redemption of the OP Units at any time after 90 days.  The Company,
at its option, may redeem the OP Units by either (i) issuing common stock
at the rate of one share of common stock for each OP Unit, or (ii) paying
cash to a limited partner based on the average trading price of the
Company's common stock.  Each OP Unit is allocated partnership income and
cash flow at a rate equal to the dividend being paid by the Company on
a share of common stock.  Additional partnership income and cash flow is
allocated 99% to the Company and 1% to the limited partners.

This acquisition strategy is referred to as a "Down REIT" transaction;
as long as certain tax attributes are maintained, the income tax
consequences to a limited partner are generally deferred until such time
as the limited partner redeems their OP Units.

On December 17, 1996, the Company acquired a $3.6 million industrial
property located in Modesto, California utilizing the Operating
Partnership.  A director of the Company was a 9% owner of the property
and received 8,991 OP units in connection with the Down REIT transaction. 
This director did not participate in the approval of the acquisition. 
The sellers of the property received 108,495 OP Units.  As of September
30, 1998, the Company has redeemed 21,607 OP units for cash. 

Note 4.  Debt

Bank Loan Payable

In June 1998, the Company amended and restated its secured revolving
credit facility with Bank of America.  Under this facility, which matures
June 15, 2001, the Company can borrow up to $175 million on a secured
basis.  The facility contains an unsecured sub-line of $50 million. 
Secured loans bear interest at a floating rate equal to either the
lender's published "reference rate" or LIBOR plus a margin ranging from
1.10% to 1.35%.  The interest rate of the unsecured loans is either the
lender's published "reference rate" or LIBOR plus a margin of 1.50%.  The
credit facility contains various restrictive covenants including, among
other things, a covenant limiting quarterly dividends to 95% of average
Funds From Operations.  As of September 30, 1998, the Company was in
compliance with the covenants and requirements of its revolving credit
facility which had an outstanding balance of $137,410,000 and included
$9,000,000 of unsecured loans.  The credit facility is secured by
mortgages on 45 properties (which properties collectively accounted for
approximately 51% of the Company's Annualized Base Rent and approximately
42% of the Company's total assets as of September 30, 1998), together
with the rental proceeds from such properties. 

The daily weighted average amount owing to the bank was $77,818,000 and
$45,802,000 for the nine months ended September 30, 1998 and 1997,
respectively.  The weighted average interest rates in each of these
periods was 7.02%  and 7.43%, respectively.  The effective interest rate
at September 30, 1998 was 6.82%.

Mortgage Loans Payable

Mortgage loans payable at September 30, 1998 consist of the following (in
thousands):

   Floating rate note due December 15, 1999
     current rate of 8.75%                       $  1,803
   7.5% note due January 1, 2002                   24,395
   7.02% note due March 15, 2003                   24,813
   8.9% note due July 31, 2006                      8,712
   6.91% note due July 31, 2006                    20,714
                                                 $ 80,437



The mortgage loans are collaterized by 21 properties (which Properties
collectively accounted for approximately 28% of the Company's
Annualized Base Rent and approximately 21% of the Company's total assets
as of September 30, 1998).
  
The following table presents scheduled principal payments on mortgage
loans as of September 30, 1998 (in thousands):

   Twelve month period ending September 30, 1999   $   1,311
   Twelve month period ending September 30, 2000       3,173
   Twelve month period ending September 30, 2001       1,496
   Twelve month period ending September 30, 2002      24,204
   Twelve month period ending September 30, 2003      23,723
                           Thereafter                 26,530
                                                   $  80,437

Note 5.  Comprehensive Income

There are no adjustments necessary to net income as presented in the
accompanying consolidated statements of income to derive Comprehensive
Income in accordance with FASB Statement No. 130, Reporting Comprehensive
Income.
 
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION

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

Results of Operations

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

<PAGE>
Increases in revenues, expenses, and net income in the three and nine
months ended September 30, 1998 when compared with the same periods in
1997 were due primarily to property additions by acquisition and
development offset in part by the sale of operating properties as
follows:

             Activities from January 1, 1997   Activities from October 1, 1997
                  to September 30, 1997              to September 30, 1998
                Number of                       Number of      
                Operating         Square        Operating            Square  
               Properties          Feet        Properties             Feet

Acquisitions
 Industrial        10            788,000           15                884,000
 Office             7            863,000            7                551,000

                   17          1,651,000           22              1,435,000


Development
 Industrial         -               -               4                365,000
 Office             -               -               2                297,000

Sales
 Office             2            213,000            -                   -      
 Retail             -               -               1                 84,000
        
                    2            213,000            1                 84,000


Three Months Ended September 30, 1998 Compared with Three Months Ended
September 30, 1997

Income from Property Operations
Income from property operations (defined as rental income less rental
expenses) increased $3,896,000 or 47% in 1998 compared with 1997.  This
is due to an increase in rental income of $7,367,000 partially offset by
an increase in rental expenses (which include operating expenses, real
estate taxes and depreciation and amortization) of $3,471,000.

This increase in rental income and expenses is primarily attributable to
property additions by acquisition and development of real estate
investments.  The acquisition and development activities increased rental
income and rental expenses by $7,401,000 and $3,480,000, respectively. 
This was partially offset by the sale of two office properties in July
1997 and one retail property in October 1997 which resulted in a
reduction in rental income and rental expenses of $565,000 and $216,000,
respectively.

Expenses
Interest expense, which includes amortization of loan fees, increased
$787,000 or 27% in 1998 compared with 1997.  The increase is attributable
to the Company's higher level of borrowings to finance the acquisition
of properties, and higher financing costs incurred in connection with the
credit facility and mortgage loans.  The amortization of loan fees was
$238,000 and $209,000 in the third quarter of 1998 and 1997,
respectively.  General and administrative expenses increased $186,000 or
40% in 1998 compared with 1997, primarily the result of the Company's
growth in assets.

Nine Months Ended September 30, 1998 Compared with Nine Months Ended
September 30, 1997

Income from Property Operations
Income from property operations (defined as rental income less rental
expenses) increased $12,144,000 or 58% in 1998 compared with 1997.  This
is due to an increase in rental income of $20,163,000 partially offset
by an increase in rental expenses (which include operating expenses, real
estate taxes and depreciation and amortization) of $8,019,000.

This increase in rental income and expenses is primarily attributable to
property additions by acquisition and development of real estate
investments.  The acquisition and development activities increased rental
income and rental expenses by $21,778,000 and $8,464,000, respectively. 
This was partially offset by the sale of two office properties in July
1997 and one retail property in October 1997 which resulted in a
reduction in rental income and rental expenses of $3,055,000 and
$1,268,000, respectively.

Expenses
Interest expense, which includes amortization of loan fees, increased
$1,571,000 or 27% in 1998 compared with 1997.  The increase is
attributable to the Company's higher level of borrowings to finance the
acquisition of properties and higher financing costs incurred in
connection with the credit facility and mortgage loans.  The amortization
of loan fees was $750,000 and $580,000 in the nine months ended September
30 of 1998 and 1997, respectively.  General and administrative expenses
increased $783,000 or 49% in 1998 compared with 1997, primarily the
result of the Company's growth in assets.

Liquidity and Capital Resources

The Company completed the sale of 4,600,000 shares of common stock at $17
3/8 per share in February 1997 and 7,245,000 shares of common stock at
$19 5/8 per share in November 1997.  Net cash proceeds from these
offerings were used to pay off the outstanding borrowings under the
Company's credit facility.  In June 1998, the Company amended and
restated its secured revolving credit facility with Bank of America. 
Under this facility, which matures June 15, 2001, the Company can borrow
up to $175 million on a secured basis.  The facility contains an
unsecured sub-line of $50 million.  Secured loans bear interest at a
floating rate equal to either the lender's published "reference rate" or
LIBOR plus a margin ranging from 1.10% to 1.35%.  The interest rate of
the unsecured loans is either the lender's published "reference rate" or
LIBOR plus a margin of 1.50%.  As of September 30, 1998, the Company was
in compliance with the covenants and requirements of its revolving credit
facility which had an outstanding balance of $137,410,000 and included
$9,000,000 of unsecured loans. 

The Company anticipates that the cash flow generated by its real estate
investments and funds available under the above credit facility will be
sufficient to meet its short-term liquidity requirements.

During the nine months ended September 30, 1998, the Company's operating
activities provided cash flow of $28,167,000.  Investing activities
utilized cash of $155,687,000 for real estate acquisitions.  Financing
activities provided net cash flow of  $127,819,000 consisting of the
proceeds from bank borrowings and mortgage loans of $168,617,000  and net
proceeds from the issuance of common stock of $415,000, offset by
repayment of bank borrowings and mortgage loans of $19,975,000, payment
of dividends and distributions of $21,110,000 and redemption of
partnership units of $128,000.

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

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

The Company is engaged in preliminary discussions with a third party
related to the acquisition by such party of substantially all of the
Company's portfolio of suburban office buildings and industrial
properties.  The Company cautioned, however, that there can be no
assurances that the current discussions will result in any definitive
agreement or, if they do, that any transaction will be completed. 

Potential Factors Affecting Future Operating Results

At the present time, borrowings under the Company's credit facility bear
interest at a floating rate.  The Company recognizes that its results
from operations may be impacted negatively by future increases in
interest rates and substantial additional borrowings to finance
additional property acquisitions.

While the Company has historically been successful in renewing and
reletting space, the Company is subject to the risk that certain leases
expiring in 1998 and beyond may not be renewed or the terms of renewal
may be less favorable to the Company than current lease terms.  The
Company expects to incur costs in making improvements or repairs to its
portfolio of properties required by new or renewing tenants and expects
to incur expenses associated with brokerage commissions payable in
connection with the reletting of space.  

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

Inflation

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

Dividends

Common stock dividends declared for the third quarter of 1998 were $0.33
per share.  Distributions declared for the third quarter of 1998 were
$0.33 per OP Unit.  Consistent with the Company's policy, dividends and
distributions were paid in the quarter after they were declared. 

Government Regulations

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

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

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

The Company believes that it is in compliance in all material respects
with all federal, state and local laws regarding hazardous or toxic
substances, and the Company has not been notified by any governmental
authority of any non-compliance or other claim in connection with any of
its present or former properties.  The Company does not anticipate that
compliance with federal, state and local environmental protection
regulations will have any material adverse impact on the financial
position, results of operations or liquidity of the Company.

Financial Performance

Management considers Funds From Operations (FFO) to be one measure of the
performance of an equity REIT.  FFO during the three and nine months
ended September 30, 1998 amounted to $10,896,000 and $30,646,000,
respectively.  During the same periods in 1997, FFO amounted to
$6,550,000 and $17,490,000,  respectively.  Funds From Operations is used
by financial analysts in evaluating REITs and can be one measure of a
REIT's ability to make cash distributions.  Presentation of this
information provides the reader with an additional measure to compare the
performance of REITs.  Funds From Operations generally is defined by the
National Association of Real Estate Investment Trusts as net income
(computed in accordance with generally accepted accounting principles),
excluding gains from debt restructurings and sales of property, plus
depreciation and amortization of assets related to real estate, and after
adjustments for unconsolidated partnerships and joint ventures.  Funds
From Operations was computed by the Company in accordance with this
definition.  The Company's computation of Funds From Operations may,
however, differ from the methodology for calculating Funds From
Operations utilized by other equity REITs and, therefore, may not be
comparable to such other REITs.  Funds From Operations does not represent
cash generated by operating activities in accordance with generally
accepted accounting principles; it is not necessarily indicative of cash 
available to fund cash needs and should not be considered as an 
alternative to net income as an indicator of the Company's operating
performance or as an alternative to cash flow as a measure of liquidity. 

                                       Three Months Ended     Nine Months Ended
                                          September 30,         September 30,
                                       1998          1997     1998         1997

Funds From Operations (in thousands):

   Net Income                         $ 7,928     $ 15,781   $23,253   $ 24,296

   Add Back:
       Depreciation and Amortization    2,939        1,528     7,307      3,902 
       Minority Interest                   29           28        86         79 
   Less Gain on Sale                     -         (10,787)     -       (10,787)

   Funds From Operations              $10,896     $  6,550   $30,646   $ 17,490


Year 2000 Compliance

In 1997 the Company purchased and put in place a new information system
hardware and software to accommodate the rapid growth of its real estate
portfolio.  The new information system software are Year 2000 compliant. 
In addition, the Company retained the services of a team of consultants
to maintain the system.  Since January 1998, these consultants have been
conducting a survey of the Company's outside relationships (e.g.,
tenants, vendors and creditors) to assess their state of readiness in
regards to Year 2000 compliance.  The survey indicates that a majority
of these parties' information systems are Year 2000 compliant.  In
addition, the Company plans to perform a detailed IT system review of its
key outside relationships.  The Company believes that Year 2000
compliance will not have a material impact on the Company's financial
statements.
<PAGE>
PART II.  OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS

   None

Item 2.  CHANGES IN SECURITIES

   None

Item 3.  DEFAULTS UPON SENIOR SECURITIES

   None

Item 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

   None

Item 5.  OTHER INFORMATION

   None

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

A. Exhibits

   Exhibit No.    Exhibit

     3.1        Charter of the Company, as amended, is incorporated
                herein by reference to Exhibit 3.1 to the Company's
                Quarterly Report on Form 10-Q for the quarter ended
                June 30, 1997.

     3.2        Amended and Restated Bylaws of the Company are
                incorporated herein by reference to Exhibit 3.2 to the
                Company's Quarterly Report on Form 10-Q for the quarter
                ended September 30, 1995.

     10.17      Fourth Amended and Restated Credit Agreement (Secured
                Loan) among Bedford Property Investors, Inc., The Banks
                Party Hereto and Bank of America National Trust and
                Savings Association, as Arranger and as Administrative
                Agent for the Banks, and Union Bank of California, NA
                as Co-Agent for the Banks, dated June 15, 1998, is
                incorporated by reference to exhibit 10.17 to the
                Company's Quarterly Report on Form 10-Q for the quarter
                ended June 30, 1998.

     10.18      Amended and Restated Unsecured Credit Agreement among
                Bedford Property Investors, Inc., The Banks Party
                Hereto and Bank of America National Trust and Savings
                Association, as Arranger and as Administrative Agent
                for the Banks, and Union Bank of California, N.A., as
                Co-Agent for the Banks, dated June 15, 1998, is
                incorporated by reference to exhibit 10.18 to the
                Company's Quarterly Report on Form 10-Q for the quarter
                ended June 30, 1998.

     11*        Statement of Computation of Earnings Per Share.

     27*        Financial Data Schedules

* Filed herewith



B.   Reports on Form 8-K

     None

SIGNATURES

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

Dated: October 30, 1998


     BEDFORD PROPERTY INVESTORS, INC.
                (Registrant)

   By:  /s/ SCOTT R. WHITNEY
        Scott R. Whitney
        Senior Vice President and
        Chief Financial Officer


   By:  /s/  HANH KIHARA
        Hanh Kihara
        Vice President and Controller
        (Principal Accounting Officer)

<PAGE>
                           Exhibit 11
                                
                Bedford Property Investors, Inc.
         Statement of Computation of Earnings per Share
         (in thousands, except share and share amounts)
<TABLE>
<S>                                                     <C>             <C>            <C>            <C>
                                                             Three Months Ended              Nine Months Ended
                                                               September 30,                   September 30,

                                                            1998            1997           1998            1997
Basic:
   Net income                                            $     7,928     $    15,781    $    23,253    $    24,296
   Less:  Dividends on the Series A
          Convertible
           Preferred Stock                                      -              1,250           -             3,500
  
   Net income applicable to common stockholders          $     7,928     $    14,531    $    23,253    $    20,796
 
   Weighted average number of shares                      22,649,403      11,158,953     22,616,558     10,416,729
   
   Basic earnings per share                              $      0.35     $      1.30    $      1.03    $      2.00

Diluted:
   Net income applicable to common stockholders          $     7,928     $    14,531    $    23,253    $    20,796
   Add: Dividends on the Series A Convertible
        Preferred Stock                                         -              1,250           -             3,500
        Minority interest                                         29              28             86             79

   Net income for diluted earnings per share             $     7,957     $    15,809    $    23,339    $    24,375

   Weighted average number of shares (from above)         22,649,403      11,158,953     22,616,558     10,416,729
   Weighted average shares issuable upon
         conversion of the Series A Convertible
         Preferred Stock                                        -          4,166,667           -         4,166,667
   Weighted average shares of dilutive stock 
     options using average period stock price 
     under the treasury stock method                         189,834         277,464        227,186        222,421
   Weighted average shares issuable upon the 
        conversion of operating partnership units             86,888          95,049         90,552         99,482
   Weighted average number of common shares - 
        assuming dilution                                 22,926,125      15,698,133     22,934,296     14,905,299

   Earnings per share - assuming dilution                $      0.35     $      1.01    $      1.02    $      1.64
</TABLE>