EXHIBIT 10.45.2



                       THIRD AMENDMENT TO PROMISSORY NOTE

     THIS THIRD  AMENDMENT TO PROMISSORY NOTE (the  "Amendment"),  is made as of
June11,  2004 by and between MISSION WEST  PROPERTIES,  L.P., a Delaware limited
partnership  ("Borrower"),  and  CITICORP  USA,  INC.,  a  Delaware  corporation
("Lender") as follows:

                                    RECITALS

     A. In  connection  with a loan (the  "Loan"),  made by Lender to  Borrower,
Borrower  executed  that  certain  Promissory  Note,  dated as of April 8, 2003,
payable to  Lender,  in the amount of  $80,000,000,  as amended by that  certain
First Amendment to Promissory Note dated as of June 30, 2003 and by that certain
Second Amendment to Promissory Note dated as of March 29,  2004 (as amended, the
"Note").  Borrower's  obligations  under  the  Note  are  secured,  among  other
security,  by that  certain  Deed of  Trust,  Assignment  of Leases  and  Rents,
Security  Agreement and Fixture Filing (the "Deed of Trust"),  dated as of April
8, 2003 executed by Borrower,  as trustor,  in favor of Lender,  as Beneficiary,
and recorded in the official records of Santa Clara County,  California on April
8, 2003 as document  number  16947181,  and guaranteed by that certain  Guaranty
(the  "Guaranty"),  dated as of April  8,  2003  executed  by Carl E.  Berg,  an
individual,  Mission West Properties,  L.P. I, a Delaware  limited  partnership,
Mission West  Properties,  L.P. II, a Delaware  limited  partnership and Mission
West  Properties,  L.P.  III,  a  Delaware  limited  partnership  (collectively,
"Guarantor").  Borrower and Guarantor have also executed and delivered to Lender
that certain Environmental  Indemnity Agreement (the "Environmental  Indemnity")
dated  April  8,  2003.  The  Note,  the  Deed  of  Trust,  the  Guaranty,   the
Environmental  Indemnity and the other  documents,  instruments  and  agreements
evidencing or securing the Loan are hereinafter  referred to collectively as the
"Loan Documents".

     B. Borrower has  requested  and Lender has agreed,  subject to the terms of
this Amendment,  to modify the terms of the Note to extend the Maturity Date (as
defined in the Note).

     NOW,  THEREFORE,  in  consideration  of the  foregoing  and for other  good
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, Lender and Borrower hereby agree as follows:

                                    AGREEMENT

     1.   DEFINITIONS.  Except as  modified  herein,  terms  defined in the Note
          shall have the same meaning when used in this Amendment.

     2.   MODIFICATION  TO NOTE.  On and after the date of this  Amendment,  the
          definition of "Maturity  Date" set forth in Paragraph 1(a) of the Note
          shall be amended and  modified to mean  September 6,  2004;  provided,
          however,  that  the  foregoing  amendment  is  subject  to  Borrower's
          satisfaction  of  the  condition  subsequent  described  in  Section 3
          hereof.  In the  event  that  Borrower  shall  fail  to  satisfy  such
          condition subsequent in accordance with the terms of Section 3 hereof,
          then  notwithstanding  the extension of the Maturity Date as set forth
          herein,  such failure  shall  constitute an Event of Default under the
          Loan Documents and Lender may, in its  discretion,  declare all of the
          indebtedness  evidenced by the Note to be immediately  due and payable
          and may exercise the other remedies available to Lender under the Loan
          Documents or at law or in equity.

     3.   CONDITION  SUBSEQUENT.  Lender's agreement to extend the Maturity Date
          as set forth in Section 2 above is subject to the  satisfaction of the
          condition  subsequent set forth in this Section 3. Not later than July
          6, 2004  Borrower  shall either  (a) grant to Lender a first  priority
          lien on commercial real property acceptable to Lender in Lender's sole
          and absolute  discretion owned by Borrower in fee simple and having an
          "as-is" market value of not less than $7,570.000,00 as determined by a
          subsequently  ordered appraisal in form and substance  satisfactory to
          Lender (the "Additional Property"), or (b) make a principal prepayment
          in  respect  of the  indebtedness  evidenced  by the Note in an amount
          sufficient  to reduce the  outstanding  principal  balance  thereof to
          $74,690,000.00. In the event that Borrower elects to grant to Lender a
          first priority lien on the  Additional  Property as provided in clause
          (a) above, Borrower shall be responsible for all of Lender's costs and
          expenses   incurred  in  connection   therewith,   including   without
          limitation,  Lender's review of an ALTA/ACSM land survey, an appraisal
          of the Additional  Property,  a Phase I environmental  site assessment
          with  respect to the  Additional  Property,  the fees and  expenses of
          Lender's outside  counsel,  and the premiums for a new policy of title
          insurance  or  endorsements  to  Lender's  existing  policy  of  title
          insurance.  In the event that Borrower elects to pay the  indebtedness
          evidenced by the Note as provided in clause (b) above,  Borrower shall
          pay any prepayment premium required pursuant to the terms of Paragraph
          14 of the Note.

<PAGE>

     4.   REAFFIRMATION  OF NOTE AND OTHER LOAN  DOCUMENTS.  Except as  modified
          pursuant to Section 2  hereof,  the Note is unmodified  and remains in
          full force and effect.

     5.   CONDITIONS  PRECEDENT.  Before this Amendment becomes  effective,  the
          following  conditions  shall be satisfied in a manner  satisfactory to
          Lender in the  exercise of its  reasonable  judgment:  (a) no Event of
          Default shall have occurred and be continuing and no other event shall
          have  occurred  and be  continuing  if the event,  with  notice or the
          passage  of time or both,  would be such an Event of  Default;  (b) if
          requested  by  Lender,   Borrower   shall  have  provided  such  title
          endorsements as Lender may request to insure the continuing first-lien
          priority of the Deed of Trust;  (c) no material  adverse  change shall
          have occurred, or be reasonably likely to occur, in the Property or in
          Borrower's  or  any  Guarantor's  business  conditions  (financial  or
          otherwise),  operations,  properties or prospects, or ability to repay
          the Loan; and (d) each Guarantor shall have executed the reaffirmation
          of its obligations attached hereto.

     6.   BORROWER'S  REPRESENTATIONS AND WARRANTIES.  Borrower hereby reaffirms
          all of the  representations  and  warranties  set  forth  in the  Loan
          Documents and further  represents and warrants that:  (a) the recitals
          set forth  above in the  Recitals  are  true,  accurate  and  correct;
          (b) Borrower  is the sole legal and beneficial  owner of the Property;
          (c) the  Deed of  Trust  constitutes  a  valid,  first  priority  lien
          encumbering  the Property and there are no other  mortgages,  deeds of
          trust or other such liens  encumbering  the  Property  or any  portion
          thereof;  (d) this Amendment  constitutes the legal, valid and binding
          obligation  of  Borrower  enforceable  in  accordance  with its terms;
          (e) the  execution,  delivery and  performance  of this  Amendment are
          within Borrower's power and authority and have been duly authorized by
          all requisite  partnership action, and are not in contravention of any
          law,  or  of  Borrower's   certificate   of  limited   partnership  or
          partnership agreement;  (f) there exists no Event of Default under the
          Note or any other Loan Document; and (g) there are no offsets, claims,
          counterclaims, cross-claims or defenses with respect to the Loan.

     7.   GOVERNING LAW;  SEVERABILITY.  This Amendment shall be governed by and
          construed  under  the  internal  laws  (as  opposed  to  the  laws  of
          conflicts) of the State of California. In the event that any provision
          or clause  of this  Amendment  is  construed  by a court of  competent
          jurisdiction to be void,  invalid or unenforceable,  such construction
          shall not affect other provisions of this Amendment which can be given
          effect without the void,  invalid or unenforceable  provision,  and to
          this  end  the  provisions  of  this  Amendment  are  declared  to  be
          severable.

     8.   CAPTIONS. Titles and headings appearing in this Amendment are intended
          solely for means of  reference  and are not  intended to modify any of
          the provisions of this Amendment.

     9.   ENTIRE  AGREEMENT.  This Amendment  constitutes  the entire  agreement
          between Borrower and Lender with respect to the subject matter of this
          Amendment  and may not be modified or amended in any manner  except in
          writing executed and delivered by Borrower and Lender.

     10.  COUNTERPARTS. This Amendment may be executed in multiple counterparts,
          each of  which,  taken  together,  shall  constitute  one and the same
          agreement.

<PAGE>

     IN WITNESS  WHEREOF,  this  Amendment has been duly executed as of the date
set forth above.

                                        BORROWER:

                                        MISSION WEST PROPERTIES, L.P.,
                                        a Delaware limited partnership

                                        By:      Mission West Properties, Inc.,
                                                 a Maryland corporation
                                                 its general partner

                                                 By:  /s/ Carl E. Berg
                                                    ----------------------------
                                                       Carl E. Berg
                                                       Chief Executive Officer




                                        LENDER:

                                        CITICORP USA, INC.,
                                        a Delaware corporation


                                        By:  /s/ David Taylor
                                           -------------------------------------
                                           David Taylor
                                           Vice President

<PAGE>

                           REAFFIRMATION OF GUARANTORS

     Guarantor  hereby (a)  represents and warrants to Lender that, if Guarantor
is a partnership, the execution, delivery, and performance of this Reaffirmation
are within its partnership powers and have been duly authorized by all necessary
partnership  action;  (b)  represents and warrants to Lender that the execution,
delivery, and performance of this Reaffirmation shall not constitute a breach of
any other  document,  instrument or agreement to which it is a party or by which
its  property is bound;  (c)  consents to the  amendment  of the Loan  Documents
pursuant to and on the terms stated in the Amendment,  including but not limited
to the extension of the Maturity Date to September 6, 2004; (d) acknowledges and
reaffirms its obligations owing to Lender under the Guaranty,  the Environmental
Indemnity and any other Loan Documents to which it is a party; and (e) ratifies,
affirms, reaffirms, acknowledges, confirms agrees that each of the Guaranty, the
Environmental  Indemnity and any other Loan  Documents to which it is a party is
and shall remain in full force and effect and represents a valid and enforceable
obligation of the Guarantor.

                                         GUARANTOR:


                                         /s/ Carl E. Berg
                                         ---------------------------------------
                                         CARL E. BERG, an individual



                                         MISSION WEST PROPERTIES, L.P. I,
                                         a Delaware limited partnership

                                         By:      Mission West Properties, Inc.,
                                                  a Maryland corporation
                                                  its general partner

                                                  By:/s/ Carl E. Berg
                                                     ---------------------------
                                                     Carl E. Berg
                                                     Chief Executive Officer


                                         MISSION WEST PROPERTIES, L.P. II,
                                         a Delaware limited partnership

                                         By:      Mission West Properties, Inc.,
                                                  a Maryland corporation
                                                  its general partner

                                                  By:/s/ Carl E. Berg
                                                     ---------------------------
                                                     Carl E. Berg
                                                     Chief Executive Officer


                                         MISSION WEST PROPERTIES, L.P. III,
                                         a Delaware limited partnership

                                         By:      Mission West Properties, Inc.,
                                                  a Maryland corporation
                                                  its general partner

                                                  By:/s/ Carl E. Berg
                                                     ---------------------------
                                                     Carl E. Berg
                                                     Chief Executive Officer