<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                            ------------------------

                                   FORM 10-Q

  /X/    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999

                                       OR

  / /    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

                         COMMISSION FILE NUMBER 1-8692

                            ------------------------

                        PACIFIC GATEWAY PROPERTIES, INC.
             (Exact name of Registrant as specified in its charter)

                  NEW YORK                                  04-2816560
       -------------------------------                 -------------------
       (State or other jurisdiction of                    (IRS Employer
       incorporation or organization)                  Identification No.)

      930 MONTGOMERY STREET, SUITE 400,
          SAN FRANCISCO, CALIFORNIA                           94133
  ----------------------------------------                  ----------
  (Address of principal executive offices)                  (Zip Code)

       Registrant's telephone number, including area code (415) 398-4800

                                [NOT APPLICABLE]
   --------------------------------------------------------------------------
   (Former name, former address and former fiscal year, if changed since last
                                    report)

                            ------------------------

    Indicate by check mark whether the 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 the
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 practical date of July 30, 1999:

    3,933,536 shares of Common Stock, $1.00 par value and
    300,000 shares of Series 1 Convertible Preferred Stock, $1.00 par value.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
                        PACIFIC GATEWAY PROPERTIES, INC.

                                     INDEX

<TABLE>
<CAPTION>
                                                                                                      PAGE NUMBER
                                                                                                     -------------
<S>                <C>                                                                               <C>
Part I--Financial Information:

       Item 1.     Consolidated Financial Statements (Unaudited)

                   Condensed Consolidated Balance Sheets as of June 30, 1999 and December 31,
                     1998..........................................................................            3

                   Condensed Consolidated Statements of Operations for the Three and Six Months
                     Ended June 30, 1999 and 1998..................................................            4

                   Condensed Consolidated Statement of Stockholders' Equity for the Six Months
                     Ended June 30, 1999...........................................................            5

                   Condensed Consolidated Statements of Cash Flows for the Three and Six Months
                     Ended June 30, 1999 and 1998..................................................            6

                   Notes to Condensed Consolidated Financial Statements (Unaudited)................         7-11

       Item 2.     Management's Discussion and Analysis of Financial Condition and Results of
                     Operations....................................................................        12-16

Part II--Other Information:

       Item 1.     Legal Proceedings...............................................................        16-17

       Item 2.     Changes in Security.............................................................         None

       Item 3.     Defaults Upon Senior Securities.................................................         None

       Item 4.     Submission of Matters to a Vote of Security Holders.............................           17

       Item 5.     Other Information...............................................................         None

       Item 6.     Exhibits and Reports on Form 8-K................................................           17

Signatures.........................................................................................           18
</TABLE>

                                       2
<PAGE>
                        PACIFIC GATEWAY PROPERTIES, INC.

               CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                      AS OF          AS OF
                                                                   JUNE 30,   DECEMBER 31,
                                                                       1999           1998
                                                                   --------   ------------
<S>                                                                <C>        <C>
ASSETS

Cash and cash equivalents........................................  $  5,381     $  6,535
Restricted cash..................................................     1,585        1,573
Accounts receivable, prepaid taxes and other current assets......       246          230
Investment properties:...........................................    68,911       68,138
  Less--accumulated depreciation.................................   (17,835)     (16,205)
                                                                   --------   ------------
    Investment properties, net...................................    51,076       51,933
                                                                   --------   ------------
Property held for sale, net of accumulated depreciation and
  reserve for write-down to net realizable value of $2,733 at
  December 31, 1998..............................................        --        2,480
Deferred tax asset...............................................    11,284       10,216
Capitalized loan costs, net......................................       688          743
Capitalized lease commissions, rent concessions and other
  deferred costs, net............................................     1,884        1,841
                                                                   --------   ------------
    Total assets.................................................  $ 72,144     $ 75,551
                                                                   --------   ------------
                                                                   --------   ------------

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable, prepaid rent, tenant security deposits, accrued
  interest and other current liabilities.........................  $  2,409     $  3,453
Debt related to investment properties............................    45,023       48,707
Deferred tax liability...........................................    21,763       20,274
                                                                   --------   ------------
    Total liabilities............................................    69,195       72,434
                                                                   --------   ------------

STOCKHOLDERS' EQUITY
Common stock $1.00 par value:
  Authorized--10,000,000 shares
  Issued and outstanding--4,052,090 shares as of June 30, 1999
    and December 31, 1998........................................     4,052        4,052
Series 1 Convertible Preferred Stock $1.00 par value,
  $3,000,000 preference in liquidation:
  Authorized, issued and outstanding--300,000 shares.............     2,889        2,889
Paid-in-deficit..................................................    (8,968)      (8,968)
Retained earnings................................................     7,013        7,181
Treasury stock, at cost--118,554 common shares at June 30, 1999
  and December 31, 1998..........................................    (2,037)      (2,037)
                                                                   --------   ------------
  Total stockholders' equity.....................................     2,949        3,117
                                                                   --------   ------------
    Total liabilities and stockholders' equity...................  $ 72,144     $ 75,551
                                                                   --------   ------------
                                                                   --------   ------------
</TABLE>

The accompanying notes are an integral part of these condensed consolidated
financial statements.

                                       3
<PAGE>
                        PACIFIC GATEWAY PROPERTIES, INC.

            CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                                    FOR THE THREE MONTHS    FOR THE SIX MONTHS
                                                                                       ENDED JUNE 30,         ENDED JUNE 30,
                                                                                    --------------------    ------------------
                                                                                       1999         1998       1999       1998
                                                                                    -------      -------    -------    -------
<S>                                                                                 <C>          <C>        <C>        <C>
INVESTMENT PROPERTIES:
  Rental revenues...............................................................    $ 4,460      $ 4,595    $ 8,842    $ 8,064
  Operating expenses............................................................     (1,681)      (1,650)    (3,089)    (3,045)
  Interest expense..............................................................       (959)      (1,065)    (1,932)    (2,124)
  Depreciation and amortization.................................................       (950)        (991)    (1,874)    (1,810)
                                                                                    -------      -------    -------    -------
    Investment properties income................................................        870          889      1,947      1,085
General and administrative expenses.............................................       (414)        (254)      (982)      (694)
Other income, net...............................................................         85           30        157         54
                                                                                    -------      -------    -------    -------
Income before taxes.............................................................        541          665      1,122        445
Income tax provision............................................................       (204)        (275)      (442)      (192)
                                                                                    -------      -------    -------    -------
  Net income....................................................................    $   337      $   390    $   680    $   253
                                                                                    -------      -------    -------    -------
                                                                                    -------      -------    -------    -------
Preferred dividends.............................................................        (33)          --        (60)        --
                                                                                    -------      -------    -------    -------
  Net income available to common stockholders...................................    $   304      $   390    $   620    $   253
                                                                                    -------      -------    -------    -------
                                                                                    -------      -------    -------    -------

Income per common share, basic..................................................    $  0.08      $  0.10    $  0.16    $  0.06
                                                                                    -------      -------    -------    -------
                                                                                    -------      -------    -------    -------

Income per common share, diluted................................................    $  0.08      $  0.10    $  0.15    $  0.06
                                                                                    -------      -------    -------    -------
                                                                                    -------      -------    -------    -------
</TABLE>

The accompanying notes are an integral part of these condensed consolidated
financial statements.

                                       4
<PAGE>
                        PACIFIC GATEWAY PROPERTIES, INC.

      CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)

                     FOR THE SIX MONTHS ENDED JUNE 30, 1999

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                         SERIES 1
                                                        CONVERTIBLE
                                               COMMON    PREFERRED    PAID-IN-  RETAINED   TREASURY
                                               STOCK       STOCK      DEFICIT   EARNINGS    STOCK     TOTAL
                                               ------   -----------   -------   --------   --------   ------
<S>                                            <C>      <C>           <C>       <C>        <C>        <C>
Balance at December 31, 1998.................  $4,052   $    2,889    $(8,968)  $ 7,181    $ (2,037)  $3,117

  Net income.................................     --            60         --       620          --      680

  Dividends..................................     --           (60)        --      (788)         --     (848)
                                               ------   -----------   -------   --------   --------   ------

Balance at June 30, 1999.....................  $4,052   $    2,889    $(8,968)  $ 7,013    $ (2,037)  $2,949
                                               ------   -----------   -------   --------   --------   ------
                                               ------   -----------   -------   --------   --------   ------
</TABLE>

The accompanying notes are an integral part of these condensed consolidated
financial statements.

                                       5
<PAGE>
                        PACIFIC GATEWAY PROPERTIES, INC.

          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                 FOR THE THREE MONTHS    FOR THE SIX MONTHS
                                                                                    ENDED JUNE 30,         ENDED JUNE 30,
                                                                                 --------------------    -------------------
                                                                                    1999         1998      1999         1998
                                                                                 -------       ------    ------      -------
<S>                                                                              <C>           <C>       <C>         <C>
Cash flow from operating activities:
  Net income...................................................................  $   337       $  390    $  680      $   253
  Non-cash revenues and expenses included in net income:
    Depreciation and amortization..............................................      950          991     1,874        1,810
    Deferred taxes, net........................................................      196          275       421          185
    Gain on settlement of reimbursement obligation, net........................       --           --        (6)          --
  Change in assets and liabilities:
    Accounts receivable, prepaid taxes and other current assets................      186          112       (16)         (28)
    Accounts payable and other current liabilities.............................     (251)        (921)     (403)         632
                                                                                 -------       ------    ------      -------
  NET CASH GENERATED BY OPERATING ACTIVITIES...................................    1,418          847     2,550        2,852
                                                                                 -------       ------    ------      -------

Cash flow from investing activities:
  Additions to building and other improvements, capitalized lease commissions,
    rent concessions, and other deferred costs.................................     (715)        (900)   (1,003)      (2,871)
  Proceeds from sale of property, net..........................................       --           --     3,785           --
  (Increase) decrease in restricted cash.......................................      165            9       (12)         (20)
                                                                                 -------       ------    ------      -------
  NET CASH GENERATED BY (USED IN) INVESTING ACTIVITIES.........................     (550)        (891)    2,770       (2,891)
                                                                                 -------       ------    ------      -------

Cash flow from financing activities:
  Payment to settle reimbursement obligation...................................       --           --    (4,200)          --
  Borrowings under debt related to investment properties.......................       --        1,575        --        1,575
  Repurchase of warrants.......................................................       --           --        --       (1,007)
  Payments on debt.............................................................   (1,159)        (257)   (1,426)        (500)
  Payments of loan costs and fees..............................................       --          (41)       --          (41)
  Payment of dividends.........................................................     (467)          --      (848)          --
                                                                                 -------       ------    ------      -------
  NET CASH GENERATED BY (USED IN) FINANCING ACTIVITIES.........................   (1,626)       1,277    (6,474)          27
                                                                                 -------       ------    ------      -------

Increase (decrease) in cash and cash equivalents...............................     (758)       1,233    (1,154)         (12)
Balance at beginning of period.................................................    6,139          820     6,535        2,065
                                                                                 -------       ------    ------      -------
Balance at end of period.......................................................  $ 5,381       $2,053    $5,381      $ 2,053
                                                                                 -------       ------    ------      -------
                                                                                 -------       ------    ------      -------

Supplementary disclosures:
  Cash paid for interest.......................................................  $   960       $  960    $2,578      $ 1,992
                                                                                 -------       ------    ------      -------
                                                                                 -------       ------    ------      -------
  Cash paid for taxes..........................................................  $     9       $    6    $   10      $     7
                                                                                 -------       ------    ------      -------
                                                                                 -------       ------    ------      -------
  Non-cash transactions:
    Increase in paid-in-capital from repurchase of warrants....................  $    --       $   --    $   --      $   883
                                                                                 -------       ------    ------      -------
                                                                                 -------       ------    ------      -------
</TABLE>

The accompanying notes are an integral part of these condensed consolidated
financial statements.

                                       6
<PAGE>
                        PACIFIC GATEWAY PROPERTIES, INC.

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

               FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 1999

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    The accompanying unaudited condensed consolidated financial statements
should be read in conjunction with Pacific Gateway Properties, Inc.'s (the
"Company") 1998 Forms 10-K and 10-K/A for the year ended December 31, 1998 and
Form 10-Q for the quarter and six months ended June 30, 1998. These statements
have been prepared in accordance with the instructions of the Securities and
Exchange Commission Form 10-Q and do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.

    In the opinion of the Company, all material adjustments of a normal
recurring nature considered necessary for a fair presentation of results of
operations for the interim periods have been included. The results of
consolidated operations for the three and six months ended June 30, 1999 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1999.

    RECLASSIFICATIONS

    Certain prior year amounts have been reclassified to be consistent with
current year classifications.

    ESTIMATES AND ASSUMPTIONS

    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results will differ from those estimates.

2. REAL ESTATE PARTNERSHIP INVESTMENTS

    RINCON CENTER ASSOCIATES PARTNERSHIP (RCA)--SAN FRANCISCO, CALIFORNIA

    The Company owns general (non-managing) and limited partnership interests in
RCA totaling approximately 22.8% and, subject to the funding agreement entered
into with RCA's managing general partner, Perini Land & Development Company
(PL&D), (a wholly owned subsidiary of Perini Corporation), discussed below, is
responsible for 20% of cash requirements in excess of available financing. The
Company's minority, general (non-managing) and limited partnership interests in
RCA represent significant potential financial exposure. This exposure includes
and may not be limited to the potential tax liability associated with the
Company's negative tax basis, the joint and several guarantees provided by the
Company to the mortgage lender on Rincon Center Phase Two and the master lessor
on Rincon Center Phase One, and the potential tax liability that would exist
from the cancellation of debt in connection with a possible debt restructuring.
Except for the deferred income tax liabilities related to the tax that would
result from any gain recognized from the Company's negative tax basis in its
partnership interest, the accompanying financial statements do not include any
adjustments for these uncertainties.

    RCA sold Rincon Center Phase One to Chrysler MacNally Corporation (Chrysler)
in June 1988; subsequently, RCA leased the property back under a master lease
which is treated as an operating lease for financial reporting purposes. In July
1993, Chrysler completed a refinancing of Rincon Center Phase One. The maturity
date of this debt was July 1, 1998. Payments under the master lease agreement
may be adjusted to reflect adjustments in the rate of interest payable by
Chrysler on the Rincon Center Phase One debt. The master lease also permits
Chrysler to put the property back to RCA at stipulated prices

                                       7
<PAGE>
                        PACIFIC GATEWAY PROPERTIES, INC.

   NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

               FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 1999

2. REAL ESTATE PARTNERSHIP INVESTMENTS (CONTINUED)
beginning January 1998 if long-term financing meeting certain conditions is not
obtained. As of January 1, 1998, no new long term financing commitment had been
secured although negotiations with the current lender were then in progress. In
order to allow those discussions to continue, Chrysler agreed to temporarily
delay the enforcement of the purchase requirements. As discussed below,
negotiations with Citibank to refinance the debt secured by Rincon Center Phase
One and Rincon Center Phase Two have been discontinued and Citibank has
commenced foreclosure proceedings against Rincon Center Phase One and Rincon
Center Phase Two. Chrysler has purportedly exercised its "put" rights under the
lease and a "closing" scheduled for the end of July 1999 whereby the property
would be repurchased was ignored by RCA. The potential exists for Chrysler or a
receiver appointed for Rincon Center Phase One to seek enforcement of rights and
remedies under the Chrysler lease. As a result of the foregoing, RCA has
written-down the carrying value of the assets related to this segment of the
property by $17,150,000 in 1997 to the estimated net realizable value. On June
30, 1997, RCA filed a lawsuit against Chrysler in Superior Court in the State of
California, County of San Francisco. The lawsuit's primary cause of action
alleged that Chrysler breached the master lease and a certain letter agreement
because the rent payments due from RCA after the 1993 refinancing of Rincon
Center Phase One resulted in an increase in Chrysler's after tax rate of return
from rent payments. The managing general partner of RCA has reported to the
Company that this lawsuit has been settled by RCA with no significant recovery
to RCA.

    In September 1993, RCA completed a refinancing of Rincon Center Phase Two
with Citibank. The residential portion of Rincon Center Phase Two was being
financed with redevelopment bonds from the Redevelopment Agency of the City and
County of San Francisco, California, which were due December 1, 2006. The bonds
were secured by an irrevocable letter-of-credit issued by Citibank in the name
of RCA (the "Citibank L.C."). In the event that drawings were made on the
Citibank L.C., RCA has agreed to reimburse Citibank for such drawings pursuant
to the terms of the Reimbursement Agreement which is secured by a deed of trust
on Rincon Center Phase Two and other guarantees. During 1997, the Citibank L.C.
was due to expire. The Citibank L.C. had been renewed on numerous occasions.
However, as discussed below, Citibank has refused to renew the Citibank L.C.
further.

    A portion of the security for the Rincon Center Phase Two Construction Loan
Agreement was a $3.65 million letter-of-credit issued by Bank of America
National Trust and Savings Association (the Issuing Bank) on behalf of the
Company in favor of Citibank (the "Company L.C."). The Company L.C. was drawn by
Citibank prior to its expiration date of June 23, 1997. To the Company's
knowledge, Citibank is currently holding the $3.65 million in a separate
restricted account on behalf of RCA and has not applied said funds to any
outstanding debt of RCA.

    On July 9, 1999, Citibank filed a statutory Notice of Default with respect
to the Rincon Center Phase One and Rincon Center Phase Two and, in conjunction
therewith, concurrently filed judicial foreclosure actions in San Francisco
Superior Court with respect to such properties and sought the appointment of
receivers for both projects. RCA's counsel opposed the appointment of receivers,
but on August 3, 1999, the court ordered receivers to be appointed for Rincon
Center Phase One and Rincon Center Phase Two. At this time, RCA no longer
controls either Rincon Center Phase One or Rincon Center Phase Two. The time
periods for a potential non-judicial foreclosure on the RCA properties are
proceeding and Citibank will be able to notice a judicial sale of the properties
on or about October 7, 1999. In addition, in conjunction with the initiation of
foreclosure actions, Citibank has refused to renew the Citibank L.C. with
respect to the Rincon Center Phase Two redevelopment bonds. As a result, the
Citibank L.C. has been

                                       8
<PAGE>
                        PACIFIC GATEWAY PROPERTIES, INC.

   NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

               FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 1999

2. REAL ESTATE PARTNERSHIP INVESTMENTS (CONTINUED)
drawn by the bond trustee and the bond trustee has commenced redemption
proceedings with respect to the redevelopment bonds. In turn, Citibank has made
formal demand on RCA for reimbursement under the Reimbursement Agreement.
Although efforts have been made by RCA to halt the redemption process, it is
unlikely that these efforts will be successful. The redemption of the
redevelopment bonds is likely to negatively impact the value of the Rincon
Center Phase Two asset.

    In 1996, the Company ceased recording any activity related to its interest
in RCA because (i) it had previously written-down its equity investment in and
loans to RCA to zero in 1995, and (ii) the Registrant currently has no
obligation, prospects or plans to invest further in or on behalf of RCA.

    In 1993, the Company entered into an agreement with RCA's managing general
partners, whereby such managing general partner agreed to advance funds to RCA
on behalf of the Company on an unsecured non-recourse basis, subject to interest
at prime plus 2% and certain annual fees (principal, unpaid interest and fees
are collectively referred to as the RCA Advances). This agreement does not
reduce the level of the Company's general and limited partnership interests in
RCA. The RCA Advances are only required to be repaid from the Company's share of
future distributions from RCA, if any. During the first six months of 1999 and
1998, RCA incurred net losses of approximately $6,542,000 and $7,991,000,
respectively. The RCA Advances amount to approximately $8,876,000 at June 30,
1999 and as noted above, are not recorded on the Company's financial statements
since (i) the RCA Advances are only required to be repaid from the Company's
share of future distributions from RCA, if any, (ii) the Company has no
intention or legal obligation to repay the RCA Advances other than from its
share of distributions from RCA, if any, and (iii) the Company does not
anticipate any material cash distributions by RCA in the foreseeable future. In
addition, as a counterclaim in the litigation relating to leasing commissions
described below the managing general partner is presently disputing the
continued validity of the funding letter in the litigation pending between
Perini Land & Development and the Company.

    On March 16, 1999, the Company filed a derivative suit asserting the rights
of RCA against Perini Land & Development and Perini Corporation, among others,
alleging that defendants were usurping the partnership's opportunity to purchase
the fee interest upon which Rincon Center sits from the fee owner. The fee
interest has subsequently been purchased by an entity in which Perini
Corporation or one of its affiliates holds an interest. The Company is seeking,
at minimum, to have a constructive trust in favor of RCA imposed on the interest
in such fee held directly or indirectly by Perini Corporation or its affiliates.
On April 30, 1999, these defendants answered the complaint, denying liability.
In addition, they filed a cross-complaint against the Company alleging that, by
filing the above-described action, the Company tortiously interfered with
cross-plaintiff's contract to purchase the fee interest. Cross-plaintiffs also
allege that the Company has anticipatorily repudiated an April 1998 term sheet
addressing a potential restructuring of the Rincon Center project, under which
cross-plaintiffs allege that the Company committed itself to provide $3.75
million in cash towards such restructuring. The Company denies that such term
sheet, which was never replaced as contemplated by a written agreement, binds it
at this time and, in any event, denies that Perini Land & Development has
complied or can comply with its terms. It is not known at this time what effect
the Citibank foreclosure proceedings will have on this litigation, if any.

    During 1997, the Company has asserted certain claims against RCA for payment
of commissions due for leasing and construction services provided to RCA by the
Company during 1996. The Company has not recorded these claims pending
resolution of this matter with RCA's managing general partner. Perini

                                       9
<PAGE>
                        PACIFIC GATEWAY PROPERTIES, INC.

   NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

               FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 1999

2. REAL ESTATE PARTNERSHIP INVESTMENTS (CONTINUED)
Land & Development has asserted various counterclaims in this action, including
challenging the validity of the 1993 funding agreement described above.

    Summary unaudited financial statement data for RCA is as follows (in
thousands):

<TABLE>
<CAPTION>
                                                         AS OF
                                               --------------------------
                                                   MAY 31,   DECEMBER 31,
                                                      1999           1998
                                               -----------   ------------
<S>                                            <C>           <C>
Investment properties, net...................  $   108,715    $  109,320
Other assets.................................        1,734         2,734
                                               -----------   ------------
                                               $   110,449    $  112,054
                                               -----------   ------------
                                               -----------   ------------

Debt.........................................  $    49,564    $   45,788
Amounts due to partners......................      206,281       201,118
Other liabilities............................       11,477        16,569
Partners' deficit............................     (156,873)     (151,421)
                                               -----------   ------------
                                               $   110,449    $  112,054
                                               -----------   ------------
                                               -----------   ------------
</TABLE>

<TABLE>
<CAPTION>
                                                    THREE MONTHS        THREE MONTHS         FIVE MONTHS          SIX MONTHS
                                                           ENDED               ENDED               ENDED               ENDED
                                                    MAY 31, 1999       JUNE 30, 1998        MAY 31, 1999       JUNE 30, 1998
                                                  --------------      --------------      --------------      --------------
<S>                                               <C>                 <C>                 <C>                 <C>
Revenue......................................     $        4,942      $        4,246      $        8,166      $        9,227
Expenses:
  Operating and lease expenses...............              3,947               3,161               6,503               6,497
  Interest expense...........................              3,765               4,608               6,031               9,153
  Depreciation expense.......................                642                 325               1,084               1,568
                                                  --------------      --------------      --------------      --------------
                                                           8,354               8,094              13,618              17,218
                                                  --------------      --------------      --------------      --------------
Net loss.....................................     $       (3,412)     $       (3,848)     $       (5,452)     $       (7,991)
                                                  --------------      --------------      --------------      --------------
                                                  --------------      --------------      --------------      --------------
</TABLE>

    As of the date of this report, the managing general partner of RCA had not
completed the financial
accounting for RCA. As a result, the Company has recorded unaudited revenue and
expenses for the first five months ended May 31, 1999 and has included the
actual unaudited balance sheet as of May 31, 1999. The revenue and expenses for
the three and six months ended June 30, 1998 are actual and unaudited.

3. DEBT

    WESTON OFFICE BUILDING

    In May 1999, the Company paid off approximately $897,000 in mortgage debt on
this property. The Company did not incur any prepayment penalties in connection
with this debt.

                                       10
<PAGE>
                        PACIFIC GATEWAY PROPERTIES, INC.

   NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

               FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 1999

4. PER SHARE DATA

    Basic earnings per share is computed as earnings divided by weighted average
shares, excluding the dilutive effects of stock options and other potentially
dilutive securities. Outstanding stock options enter into the weighted average
shares outstanding when computing diluted earnings per share using the Treasury
Stock Method.

    The number of weighted average common shares and potential common shares
used in the earnings per share calculations for the three and six months ended
June 30, 1999 and 1998, are as follows:

<TABLE>
<CAPTION>
                                               FOR THE THREE MONTHS   FOR THE SIX MONTHS
                                                  ENDED JUNE 30,        ENDED JUNE 30,
                                               --------------------  --------------------
                                                    1999       1998       1999       1998
                                               ---------  ---------  ---------  ---------
<S>                                            <C>        <C>        <C>        <C>
Basic........................................  3,933,536  3,899,596  3,933,536  3,899,596
Stock options................................     95,498    150,597     89,099    128,751
                                               ---------  ---------  ---------  ---------
Diluted......................................  4,029,034  4,050,193  4,022,635  4,028,347
                                               ---------  ---------  ---------  ---------
                                               ---------  ---------  ---------  ---------
</TABLE>

    The Company's Series 1 Convertible Preferred Stock was excluded from diluted
earnings per share for the three and six months ended June 30, 1999 as inclusion
would have been anti-dilutive.

                                       11
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

INTRODUCTION

    Pacific Gateway Properties, Inc. (the "Registrant") is a New York
corporation formed in 1984 for the purpose of investing and managing income
producing real estate. The Registrant's overall business plan has been to
assemble a substantial portfolio of income producing properties. The Registrant
historically focused its property acquisitions in the following markets:
Northern California, Arizona, Florida and Massachusetts. The Registrant's
long-term objectives continue to be maximizing net cash flow from operations and
achieving growth through appreciation of asset values. The current strategic
plan of the Registrant is to focus on real estate investments on the West Coast
with a specific emphasis on the San Francisco Bay Area. The current investment
emphasis is on commercial properties which require aggressive management and
leasing in order to maximize their potential values. This strategy is influenced
by the following factors: (1) the Registrant's current property portfolio is
concentrated on the West Coast; and (2) the Registrant believes that geographic
concentration will enhance operational efficiencies.

    The following discussion should be read in conjunction with the Registrant's
Forms 10-K and 10-K/A for 1998, quarterly report on Form 10-Q for the quarter
ended March 31, 1999, quarterly reports on Forms 10-Q and 10-Q/A for the quarter
and six months ended June 30, 1998, and in conjunction with the Unaudited
Condensed Consolidated Balance Sheets, Statements of Income and Cash Flows and
the notes thereto. Unless otherwise defined in this report, or unless the
context otherwise requires, the capitalized words or phrases used in this
section either (i) describe accounting terms that are used as line items in such
financial statements, or (ii) have the meanings ascribed to them in such
financial statements and the notes thereto.

FINANCIAL CONDITION

    CAPITAL IMPROVEMENTS, TENANT IMPROVEMENTS AND OTHER DEFERRED COSTS--During
the three and six months ended June 30, 1999, there were additions to investment
properties amounting to approximately $707,000 and $995,000, respectively, for
tenant improvements, capital improvements and other deferred costs which
includes leasing commissions. Additionally, the Registrant incurred $41,000 of
loan fees in the second quarter of 1998 relating to the new debt financing. The
Registrant anticipates further additions to investment properties of
approximately $1,200,000 during the remainder of 1999, which will be funded from
cash, restricted cash, and future cash flow generated by operating activities.

    FINANCING--Approximately $262,000 and $528,000 of debt principal was repaid
in the three and six months ended June 30, 1999, respectively, as scheduled debt
amortization. In addition, in May 1999 the Registrant paid off approximately
$897,000 in mortgage debt on its Weston (Florida) property. The Company did not
incur any prepayment penalty in connection with this debt.

MATERIAL CHANGES IN RESULTS OF OPERATIONS

    INVESTMENT PROPERTIES--During the first six months of 1999, the income from
investment properties was $1,947,000 compared to income of $1,085,000 during the
first six months of 1998. During the second quarter of 1999 the income from
investment properties was $870,000 compared to income of $889,000 for the second
quarter of 1998. The increase of $861,000 in income from investment properties
for the first six months of 1999 is attributable to new leases completed during
1998 leading to increased occupancy and renewal of existing leases at higher
rates, offset by approximately $137,000 net decrease in rental revenue due to
the sale of the 410 First Avenue property. Occupancy increased from
approximately 93% at June 30, 1998 to approximately 98% at June 30, 1999.

    The decrease in rental revenues in the three months ended June 30, 1999 is
related to a $340,000 one-time lease buyout received in 1998 from a tenant at
Walnut Creek Executive Park, and approximately $60,000 in rental revenue
received from the tenant at the 410 First Avenue property sold in January 1999.

                                       12
<PAGE>
The increase in operating expenses is primarily due to higher occupancy at the
Registrant's California properties. Interest expense decreased to $1,932,000
during the first six months of 1999 from $2,124,000 during the first six months
of 1998 primarily as a result of inclusion in interest expense for the first six
months of 1998 of $208,000 related to the settlement obligation which was
eliminated when the 410 First Avenue property was sold. Depreciation and
amortization expense increased as a result of commencing depreciation of
expenditures capitalized during 1998 and early 1999 relating to the Registrant's
leasing activities and capital improvement projects, offset by depreciation
expense no longer incurred on the 410 First Avenue property. In addition, the
Registrant wrote off $96,000 of unamortized leasing costs related to the lease
buyout at Walnut Creek Executive Park in the second quarter of 1998.

    GENERAL AND ADMINISTRATIVE EXPENSES--General and administrative expenses in
the first six months of 1999 amounted to $982,000 compared to $694,000 for the
first six months of 1998. General and administrative expenses for the second
quarter of 1999 and 1998 were $414,000 and $254,000, respectively. The increase
is primarily attributable to increases in personnel costs and professional
services.

    OTHER INCOME, NET--Other income, net, consisting primarily of interest
income, was $157,000 and $54,000 during the first six months of 1999 and 1998,
respectively. The increase is primarily due to the additional cash invested
resulting from the issuance of Series 1 Convertible Preferred Stock as more
fully discussed in the Registrant's 1998 Form 10-K.

    INCOME TAX BENEFIT (PROVISION)--A tax provision of $204,000 and $442,000 has
been recorded in connection with the net income for the three and six months
ended June 30, 1999, respectively, at rates that approximate the effective
statutory rate. A tax provision of $275,000 and $192,000 was recorded in
connection with the net income for the three and six months ended June 30, 1998,
respectively. These amounts have been recorded in accordance with Statement of
Financial Accounting Standards No. 109.

LIQUIDITY AND CAPITAL RESOURCES

REGULATION AND SUPERVISION

    Many jurisdictions have adopted laws and regulations relating to the
ownership of real estate. Compliance with these requirements from time to time
may require capital expenditures by the Registrant (for example, expenditures
necessary in order to comply with the Americans with Disabilities Act or changes
in local building or other codes). In addition, the Registrant may from time to
time have to expend capital for environmental control facilities. While the
ownership of real estate may entail environmental risks and liabilities to the
owner, the Registrant's management is sensitive to environmental issues and is
not currently aware of and does not presently expect any material effects on
current or future capital expenditures, earnings or competitive position
resulting from compliance with present federal, state or local environmental
control provisions.

DISCUSSION OF KNOWN TRENDS, EVENTS AND UNCERTAINTIES

    The economic climate for commercial real estate has shown signs that rental
rates and property values have stabilized and in selected markets has improved.
Notwithstanding a stabilizing real estate market, tenants may or may not
continue to renew leases as they expire or may renew on less favorable terms.
Conditions differ in each market in which the Registrant's properties are
located. Because of the continuing uncertainty of future economic developments
in each market, the impact these developments will have on the Registrant's
future cash flow and results of operations is uncertain.

    Inflation, inflationary expectations and their effect on interest rates may
affect the Registrant in the future by changing the underlying value of the
Registrant's real estate or by impacting the costs of financing the Registrant's
operations.

                                       13
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

    The bulk of the Registrant's resources are committed to relatively
non-liquid real estate assets. These assets, due to their value and cash flow,
have provided the Registrant with an ability to generate capital as required,
both internally and externally, through asset-based financings. In addition,
since 1992, assets or portions thereof were sold to provide further liquidity.

    The Registrant has taken several actions to generate and conserve cash, and
continues to review and analyze alternative actions. At the same time, the
Registrant is seeking to retain value and identify future opportunities for
investment. At June 30, 1999, the Registrant had approximately $5.4 million of
unrestricted cash, approximately $1.6 million of restricted cash, investment
properties with a net book value of approximately $51.1 million, total
non-recourse mortgage debt of approximately $45.0 million and stockholders'
equity of $2.9 million. Given the Registrant's desire to increase its liquidity,
the Registrant has actively pursued the sale of selected real estate assets in
the past, has restructured and refinanced its mortgage debt, and has entered
into an agreement with the managing general partner of RCA to limit the
Registrant's cash obligations to RCA. The Registrant continues to evaluate
various alternatives to improve its liquidity through debt refinancing and the
sale of properties which do not fit within its long term strategy. Funds raised
in the preceding fashion would be used for tenant improvements and other capital
requirements, certain mandatory debt reductions, and possible new investments.

    The Registrant is also obligated to fund reserves for building and tenant
improvements, leasing commissions and debt service in connection with its
mortage loans on Walnut Creek Executive Park, North Tucson Business Center and
South Bay Office Tower. Scheduled funding under the various loan agreements
during the twelve month period ending June 30, 2000, will amount to
approximately $621,672 and will be funded from future cash flow generated by
operating activities.

    Scheduled principal maturities on the above described debt during the twelve
month period ending June 30, 2000, will amount to approximately $1,047,000.
Approximately $528,000 of debt principal was repaid in the six months ended June
30, 1999 as scheduled debt amortization. In addition, in May 1999 the Registrant
paid off approximately $897,000 in mortgage debt on its Weston (Florida)
property.

    The Registrant's minority, general (non-managing) and limited partnership
interests in RCA represent significant potential financial exposure. This
exposure includes, and may not be limited to, the potential tax liability
associated with the Registrant's negative tax basis in the partnership, the
joint and several guarantees provided by the Registrant to the mortgage lender
on Rincon Center Phase Two and the master lessor on Rincon Center Phase One, and
the potential tax liability that would exist from the cancellation of debt in
connection with a possible debt restructuring. Additionally, RCA's managing
general partner agreed to advance funds to RCA on behalf of the Registrant on an
unsecured non-recourse basis, subject to interest at prime plus 2% and certain
annual fees (principal, unpaid interest, and fees are collectively referred to
as the RCA Advances). As indicated previously, RCA's managing general partner is
seeking to void the letter agreement under which these loans were made and is
also seeking restitution of the loans advanced. The RCA Advances amount to
approximately $8,876,000 at June 30, 1999, and are not recorded by the
Registrant since (i) the RCA Advances are only required to be repaid from the
Registrant's share of future distributions from RCA, if any, (ii) the Registrant
has no intention or legal obligation to repay the RCA Advances other than from
its share of distributions from RCA, if any, and (iii) the Registrant does not
anticipate any material cash distributions by RCA in the foreseeable future.
Although the managing general partner of RCA had entered into negotiations to
refinance the debt secured by Rincon Center Phase One and Rincon Center Phase
Two, the negotiations have been discontinued and the lender, Citicorp Real
Estate, Inc. (CREI), has commenced foreclosure proceedings with respect to both
Rincon Center Phase One and Rincon Center Phase Two. Citibank has refused to
renew the Citibank L.C. on Rincon Center Phase Two and, as a result, the
Citibank L.C. has been drawn by the bond trustee and the redevelopment agency
bonds relating to Rincon Center Phase Two are in the process of being redeemed.
In turn, Citibank has made formal demand on RCA for reimbursement under

                                       14
<PAGE>
the Reimbursement Agreement. In addition, the master lessor has purportedly
exercised its "put" rights under the master lease. Receivers have been appointed
for Rincon Center Phase One and Rincon Center Phase Two. The Registrant is not
the managing partner of RCA and does not control negotiations, if any, with
CREI, Citibank or Chrysler. Neither the managing partner nor the Registrant can
give any assurance that further negotiations will occur or, if further
negotiations do occur, that any resolution will be reached or that any
resolution will result in a favorable outcome to RCA or the Registrant.

    Except as described above, at June 30, 1999, the Registrant's material
capital expenditures over the next twelve months or beyond are expected to be
funded from restricted cash or future cash flow generated by operating
activities. Ongoing repair and maintenance expenditures are expected to be
funded from cash flow generated by operating activities. Future tenant
improvements and leasing commissions will be funded from restricted cash, cash
flow generated by operating activities and funds generated from future debt
refinancings or property sales, if any.

    The Registrant continued to experience more stabilized operating results in
its wholly owned properties during the first and second quarters of 1999, and
except for RCA, presently expects this trend to continue based on the
Registrant's current assessment of market, economic and other factors. In
addition, the completion of certain leasing transactions has continued to reduce
the level of vacancy (to approximately 1%) in the Registrant's portfolio. The
Registrant is continuing to aggressively pursue new leases on currently
available space and renew existing leases as they expire.

YEAR 2000 COMPLIANCE

    The inability of computers, software and other equipment utilizing
microprocessors to recognize and properly process data fields containing a
two-digit year is commonly referred to as the Year 2000 compliance issue. As the
Year 2000 approaches, such systems may be unable to accurately process certain
date-based information. As used by the Registrant, "Year 2000 ready" means that
a system will function in the Year 2000 without modification or adjustment, or
with a one-time manual adjustment.

    THE REGISTRANT'S STATE OF READINESS.  The Registrant utilizes a number of
computer software programs and operating systems across its entire organization
including applications used in financial business systems and various
administrative functions. The Registrant has established an action plan for
addressing Year 2000 issues. The Registrant's action plan for addressing Year
2000 compliance issues in its information technology ("IT") and non-IT systems
covers four phases: (i) identification of all IT and non-IT systems; (ii)
assessment of Year 2000 issues; (iii) repair of IT and non-IT systems, if
necessary; and (iv) creation of a contingency plan to address any potential Year
2000 failures. The Registrant is also contacting third parties with which it
deals (such as financial institutions and vendors) to evaluate their Year 2000
readiness and determine whether any Year 2000 failure will affect their ability
to perform as the Year 2000 approaches and arrives.

    As of June 30, 1999, the Registrant has completed the first two phases of
its Year 2000 action plan with respect to its IT systems. The Registrant has
identified all of its IT systems, assessed the Year 2000 readiness of these
systems (which involved review and testing by internal personnel) and has begun
to make necessary repairs. As of December 31, 1998, the Registrant has completed
its Year 2000 action plan with respect to its non-IT systems. The Registrant has
identified all of its non-IT systems (which are comprised of embedded systems
contained in its properties), assessed the Year 2000 readiness of these systems
through review and testing and concluded that any failure of these systems to be
Year 2000 ready is not reasonably likely to have a material adverse effect on
the Registrant's financial condition and results of operations. The Registrant
is scheduled to complete all four phases of its Year 2000 initiative with
respect to its IT systems no later than August 31, 1999.

    The Registrant has received assurances from a majority of its suppliers and
third parties with which it interacts that they have addressed their Year 2000
issues. The Registrant is evaluating these assurances for their adequacy and
accuracy and, in cases where the Registrant has not received assurances from
third

                                       15
<PAGE>
parties, is initiating further mail or phone correspondence. As a general
matter, the Registrant is vulnerable to failures by third parties to address
their own Year 2000 issues. The Registrant relies heavily upon third parties for
utility services, maintenance labor, financial services, building materials and
office supplies. There can be no assurance that the Registrant's suppliers and
other third parties will adequately address their Year 2000 issues, and any such
issues could have a material adverse affect upon the Registrant's financial
condition and results of operations.

    COST OF ADDRESSING THE REGISTRANT'S YEAR 2000 ISSUES.  The Registrant has
not spent a material amount of financial resources to remediate Year 2000
problems and does not anticipate that it will spend a material amount of
financial resources to remediate Year 2000 problems in the future. The costs of
such remediation will be paid out as part of the Registrant's general and
administrative expenses or operating expenses for property level remediation.

    RISKS OF THE REGISTRANT'S YEAR 2000 ISSUES.  Based upon the Registrant's
assessment and remediation efforts to date, and the planned, normal
course-of-business upgrades, management believes that any residual Year 2000
risk is limited to non-material, non-critical business applications and support
hardware. No assurance can be given, however, that all of the Registrant's
systems will be Year 2000 ready or that non-compliance, if any, will not have a
material adverse effect on the Registrant's future liquidity or results of
operations or ability to service debt. In addition, the failure to address Year
2000 issues by the Registrant's suppliers and other third parties with which it
interacts could have a material adverse effect upon the Registrant's financial
condition and results of operations.

    THE REGISTRANT'S CONTINGENCY PLANS.  The Registrant's Year 2000 action plan
calls for the Registrant to develop a Year 2000 contingency plan. The Registrant
will develop such a plan if the results of its Year 2000 action plan identify
risks of a Year 2000 failure.

FORWARD-LOOKING STATEMENTS; FACTORS THAT MAY AFFECT OPERATING RESULTS

    Certain information included in this Form 10-Q and other materials filed or
to be filed by the Registrant with the Securities and Exchange Commission may
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking information
involves known and unforeseen risks, uncertainties and other factors that may
cause actual results or performance to be materially different from those
expressed or implied by such forward-looking statements. These risks and
uncertainties include, but are not limited to, uncertainties affecting the real
estate business generally, such as lease renewals and the financial stability of
tenants, general economic conditions and conditions in the Registrant's markets,
risks relating to acquisitions and dispositions of properties, risks relating to
interest rate levels and fluctuations, the availability of financing, and
regulatory risks. Given these and other risks described elsewhere in this Form
10-Q, investors are cautioned not to place undue reliance on any forward-looking
statements.

ITEM 1.  LEGAL PROCEEDINGS.

    On March 20, 1997, the Registrant filed a Complaint in the San Francisco
Superior Court, Case No. 985464, against Rincon Center Associates and Perini
Land and Development Company seeking to recover approximately $812,000 in
commissions due for leasing and construction services performed for Rincon
Center. The Complaint has been answered and a Cross-Complaint has been filed.
The Cross-Complaint seeks indemnity concerning the claim for leasing commissions
on the ground that the Registrant is also a general partner of RCA, and further
seeks to rescind or otherwise avoid the effect of a letter agreement of June 22,
1993, regarding non-recourse loans from Perini Land and Development Company to
the Registrant, together with restitution of amounts loaned to the Registrant
pursuant to such letter agreement. A trial in this matter is presently scheduled
for February 2000, however the case is only in the beginning stages of
discovery, and no trial has been held. The Registrant is not in a position at
this time to

                                       16
<PAGE>
opine as to the likelihood or remoteness of liability, or the amount of damages
should liability be established.

    On March 16, 1999, the Registrant filed a derivative suit asserting the
rights of RCA against Perini Land & Development and Perini Corporation, among
others, alleging that defendants were usurping the partnership's opportunity to
purchase the fee interest upon which Rincon Center sits from the fee owner. The
fee interest has subsequently been purchased by an entity in which Perini
Corporation or one of its affiliates holds an interest. The Registrant is
seeking, at minimum, to have a constructive trust in favor of RCA imposed on the
interest in such fee held directly or indirectly by Perini Corporation or its
affiliates. On April 30, 1999, these defendants answered the complaint, denying
liability. In addition, they filed a cross-complaint against the Registrant
alleging that, by filing the above-described action, the Registrant tortiously
interfered with cross-plaintiffs' contract to purchase the fee interest.
Cross-plaintiffs also allege that the Registrant has anticipatorily repudiated
an April 1998 term sheet addressing a potential restructuring of the Rincon
Center project, under which cross-plaintiffs allege that the Registrant
committed itself to provide $3.75 million in cash towards such restructuring.
The Registrant denies that such term sheet, which was never replaced as
contemplated by a written agreement, binds it at this time and, in any event,
denies that Perini Land & Development has complied or can comply with its terms.

    As more fully discussed in the Registrant's Condensed Consolidated Financial
Statements, on July 9, 1999, Citibank filed a statutory Notice of Default with
respect to the Rincon Center Phase One and Rincon Center Phase Two and, in
conjunction with, concurrently filed judicial foreclosure actions in San
Francisco Superior Court with respect to such properties and sought the
appointment of receivers for both projects.

    The Registrant is involved in various other claims and lawsuits incidental
to its business. In the opinion of the Registrant, these other claims and
lawsuits in the aggregate will not have a material adverse impact on the
Registrant's financial condition.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    A Special in Lieu of Annual Meeting of Shareholders of the Registrant was
held on April 26, 1999 and was described in the Registrant's Form 10-Q for the
three month period ended March 30, 1999. The information set forth at Item 4 of
such Form 10-Q is hereby incorporated by reference. Among other things, the
shareholders authorized the reincorporation of the Registrant to Maryland and
authorized the Board of Directors to make an election to be treated as a real
estate investment trust ("REIT") under federal tax laws. The Registrant
currently anticipates that the reincorporation of the Registrant will be
effected during the third quarter; the Board of Directors of the Registrant has
not reached a final determination with respect to REIT election.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

    a)  Exhibits:

<TABLE>
<CAPTION>
   NO.     DESCRIPTION
   ---     --------------------------------------------------------------------------------------------------
<C>        <S>
       27  Financial Data Schedule
</TABLE>

                                       17
<PAGE>
                                   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 by the
undersigned thereunto duly authorized.

<TABLE>
<S>                                            <C>
                                               PACIFIC GATEWAY PROPERTIES, INC.
                                               Registrant

Date: August 13, 1999                          /s/ Raymond V. Marino
                                               --------------------------------------------
                                               Raymond V. Marino
                                               President and Chief Executive Officer
                                               (Principal Executive and Financial Officer)

Date: August 13, 1999                          /s/ Melanie L. Adkins
                                               --------------------------------------------
                                               Melanie L. Adkins
                                               Controller--Corporate
                                               (Principal Accounting Officer)

Date: August 13, 1999                          /s/ Neil C. Marck
                                               --------------------------------------------
                                               Neil C. Marck
                                               Controller--Management Company
                                               (Principal Accounting Officer)
</TABLE>

                                       18