EXHIBIT 10.45.3


June 3, 2004

Mr. Carl Berg
Mission West Properties, Inc.
10050 Bandley Drive
Cupertino, CA 95014

Re:      Proposed Renewal of $80,000,000.00 Loan Facility to
         Mission West Properties, L.P.

Dear Carl,

Pursuant to our  conversation,  I am pleased to present you with a brief outline
of  terms  and  conditions  for  the  proposed  renewal  of the  loan  facility,
referenced above.

     The proposed 90-day renewal should provide a reasonable  amount of time for
the new auditors to complete their audit and certification of MSW financials and
to complete our underwriting  and  documentation of the planned 2-year term loan
that will replace this existing facility.


                            SUMMARY OF RENEWAL TERMS

-    90 day renewal until September 6, 2004.
-    Monthly  principal   payments  of  $215,000.00  to  begin  June  30,  2004.
     Outstanding   balance  due  at  Loan   maturity  if  new  2-year  loan  not
     consummated.
-    Guarantors,  amounts  guaranteed,  liquidity and net worth  requirements of
     guarantor to remain unchanged.
-    Borrower covenants to remain unchanged.
-    The  following  terms  must  be met  before  July  6,  2004  otherwise  the
     outstanding principal amount will be due at that time.

     1)   Either identify additional collateral property acceptable to lender at
          lender's sole discretion, with minimum loanable value of $5.3MM at 70%
          Loan  to   value   ratio,   or   reduce   principal   outstanding   to
          $74,690,000.00.  Provide 1st  priority  lien in the form of a recorded
          Deed of Trust or make principal reduction payment.
     2)   If additional collateral property is to be provided, lender will order
          appraisal,  title search, and environmental phase I. If ALTA survey is
          not available,  Title Insurance  policy must be free of exceptions due
          to lack of survey, otherwise survey will be required.
     3)   Receipt  of a copy of MSW  management's  action  plan in  response  to
          Independent Counsels recommendations to the Audit Committee.

<PAGE>

Mr. Carl Berg                                                        Page 2 of 2
Mission West Properties, Inc.

-    Work Fee: All legal and other costs are for the account of the  Borrower(s)
     and  Guarantor(s)  payable upon demand  whether or not the  transaction  is
     ultimately consummated.
-    All other terms remain  unchanged  from  original  loans with  exception to
     updated CUSA loan document provisions.

The  purpose of this  proposal  letter is to set forth the terms and  provisions
constituting  the basis for extending the existing loan.  Formal credit approval
has been  obtained  subject to the above SUMMARY OF RENEWAL  TERMS.  Please sign
below to indicate your  acceptance of the renewal terms and return to me at your
earliest convenience.

We at the Citigroup  Private Bank greatly  appreciate the opportunity to provide
you with this proposal and look forward to working with you on this transaction.

         Yours truly,

         /s/ Bryan V. Lord
         Bryan V. Lord
         Vice President


<TABLE>
<CAPTION>
<S>                                        <C>
Borrower-Mission West Properties, L.P.

By: /s/ Carl E. Berg
   -------------------------------
Its:  CEO of GP
    ------------------------------

Guarantor-Mission West Properties, Inc.     Guarantor-Mission West Properties, L.P. I

By:  /s/ Carl E Berg                        By:  /s/ Carl E. Berg
   -------------------------------             ---------------------------------
Its:  CEO of GP                             Its:  CEO of GP
    ------------------------------              --------------------------------

Guarantor-Mission West Properties, L.P. II  Guarantor-Mission West Properties, L.P. III

By:  Carl E. Berg                           By:  /s/ Carl E. Berg
   -------------------------------             ---------------------------------
Its:  CEO of GP                             Its:  CEO of GP
    ------------------------------              --------------------------------
</TABLE>