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                                                                  EXHIBIT 10.50


BURNHAM PACIFIC



August 28, 2000


Mr. James W. Gaube
18340 River Edge Lane
Lake Oswego, OR  97034

RE:  SEPARATION AGREEMENT

Dear Jim:

         This document, upon your signature, will constitute the agreement
between you, James W. Gaube ("Gaube") and Burnham Pacific Operating Partnership,
L.P., BPP Services, Inc. and Burnham Pacific Properties, Inc. (collective, the
"Company"), on the terms of your separation from employment with the Company. It
is understood that both parties want to preclude any dispute between them
arising from your employment, your separation or any other matter with the
Company.

1.       It is understood and agreed that:

         a.       September 30, 2000 will be your last day of employment with
                  the Company (the "Effective Termination Date"). You will be
                  paid all unused accrued vacation as of September 30, 2000.

         b.       You will be compensated at your current salary and continue to
                  receive all of your current benefits (including, medical
                  insurance, dental insurance, 401(k) and other current
                  benefits) through the Effective Termination Date. COBRA and
                  insurance conversion information are attached to this letter.
                  If you are a participant in our 401(k) Plan, Wells Fargo Bank
                  our Plan Administrator, will provide you under separate cover
                  the distribution options regarding your personal account.

         c.       As of the Effective Termination Date, you will cease to have
                  any signing authority on behalf of the Company or its
                  subsidiaries. In addition, you shall no longer carry the title
                  of Executive Vice President or Chief Investment Officer.

         d.       Effective October 1, 2000, you will have no further rights
                  under that certain Senior Executive Severance Agreement dated
                  as of June 30, 1999, as amended


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                  (the "Severance Agreement"), and such Severance Agreement
                  shall be deemed terminated as of August 19, 2000.

         e.       Effective October 1, 2000, you will have no further rights
                  under that certain Phantom Shares Agreement dated as of August
                  1, 1999, as amended (the "Phantom Agreement"), and such
                  Phantom Agreement shall be deemed terminated as of October 1,
                  2000.

         f.       Effective October 1, 2000, you will have no further rights as
                  a member or otherwise under that certain Limited Liability
                  Company Agreement of Burnham Pacific Employees LLC, dated as
                  of June 1, 1999, as amended (the "LLC Agreement"), and,
                  pursuant to Section 7.02 of such LLC Agreement, the Units held
                  by you shall automatically cease to be issued and outstanding
                  as of June 1, 2000.

         g.       Effective October 1, 2000, you will cooperate with Scott C.
                  Verges to accommodate the transfer of your share in BPP
                  Services, Inc. to Mr. Verges pursuant to the terms of the
                  applicable documents of BPP Services, Inc. In consideration
                  for the terms of this Separation Agreement, the transfer price
                  for all of such shares pursuant to Section 11.03 of the
                  applicable documents shall be stipulated to be $100.00.

2.       In order to assist you in making this transition, and in consideration
         of your acceptance of this Separation Agreement by your signing and
         returning this Agreement within the stated time period, and
         relinquishing your rights under the agreements recited in Paragraph 1
         above, the Company will provide the following:

         a.       Commencing on the Effective Termination Date and continuing
                  until September 30, 2001, the Company will pay your monthly
                  COBRA premium.

         b.       At the Company's election, the Company will issue a press
                  release subject to approval by both parties.

         c.       Except to the extent arising out of Gaube's gross negligence
                  or intentional misconduct, the Company shall indemnify, defend
                  and hold Gaube harmless from any and all loss, cost, damage or
                  expense arising out of, or related to the ownership,
                  management or development of any of the Company's properties.

         d.       Following the full execution of this Separation Agreement, the
                  parties shall each fully cooperate with the other to answer
                  questions, participate in meetings, provide testimony and
                  provide information relating to activities of Gaube or the
                  Company during the term of Gaube's employment at no expense to
                  Gaube.

         e.       As a severance payment, the Company shall pay to you, in the
                  manner described below, the sum of Two Hundred Fifty Thousand
                  Dollars ($250,000), less deductions authorized and required by
                  law (the "Severance Payment"). The Severance Payment shall be
                  paid in 24 equal installments, commencing on October 1, 2000
                  and on the fifteenth day and last day of the month thereafter
                  until

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                  and including September 30, 2001 (the "Severance Period");
                  provided, however, that within 30 days after the occurrence of
                  a Change in Control (as defined in the Severance Agreement),
                  the full amount of any unpaid portion of the Severance Payment
                  shall be paid to Gaube, the Severance Period shall end, and
                  the Company shall have no further obligation to pay the
                  Severance Payment to Gaube.

         f.       In addition, the Company will assign its interest in office
                  space located at 10135 SE Sunnyside Road, Suite 250,
                  Clackamas, Oregon (the "Assignment Premises") to a new entity
                  that is to be formed by Gaube, effective upon consent of the
                  lessor. Any such assignment shall be subject to landlord
                  entering into a Modification Agreement with the new entity
                  that modifies certain terms and conditions of the office
                  lease. If the lessor consents to the assignment and the lease
                  is modified as referenced above, the new entity will assume
                  the Company's obligations as to the Assignment Premises. The
                  Company further agrees to sell the furniture, fixtures and
                  equipment in the Assignment Premises to the new entity for
                  their fair market value pursuant to a liquidator's appraisal
                  on or before October 1, 2000. The Company will cooperate with
                  Gaube in the transition period regarding the use of the
                  Assignment Premises, furniture, fixture and equipment.

         g.       The Company has acknowledged that Gaube upon terminating
                  employment with the Company will be hiring certain Company
                  employees. Gaube's assumption of the CalPERS relationship
                  requires that the new Gaube entity possibly requires the
                  continued use of office space at the Company's current
                  locations in both San Diego and San Francisco for the Company
                  employees to be hired. To aid in preventing any disruption in
                  the management of CalPERS assets, the Company agrees to permit
                  the new Gaube entity that eight to continue to use office
                  space at both locations for a period of time not to exceed
                  December 31, 2000.* The employees at the Gaube entity shall
                  have reasonable use of conference rooms, lunchrooms, restrooms
                  and other common areas just as if they continued as employees
                  of the Company. The Gaube entity is agreeable to the
                  reasonable relocation of the employees' office/workstation
                  locations within the leased premises a an accommodation to the
                  Company to assist with any logistic issues.

                  The Company additionally agrees that the employees of the
                  Gaube entity shall have continued use of all systems and
                  information necessary for the continued operation of the
                  CalPERS assets up to December 31, 2000.

                  The Company agrees to reasonably work with the Gaube entity in
                  the transition of the CalPERS assets from the Company to the
                  Gaube entity.

                  The Company further agrees to sell to the Gaube entity
                  furniture, fixtures and equipment from the San Diego and San
                  Francisco offices, that the Company no

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*     (or such shorter time if the San Francisco office lease is terminated).

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                  longer has a need, at the fair market value pursuant to a
                  liquidator's appraisal, on or before December 31, 2000.

                  As consideration for the above, the Gaube entity agrees to pay
                  to the Company rent based upon the space in which the new
                  Gaube entity occupies. Such rental rate shall be reasonably
                  negotiated between the Company an the Gaube entity and shall
                  be based upon the current rent paid by the Company.

3.       The parties agree not to disclose the terms of this Separation
         Agreement, the benefits being paid under it o the facts of these
         payments, except that the parties may disclose this information to
         those individuals that have a need to know in order for them to render
         professional or financial services or as may be required by law, rule
         or regulation.

4.       Except as set fort in Section 2(g), you also agree to preserve as
         confidential and not use or disclose any of the Company's trade
         secrets, confidential knowledge, data or other proprietary information
         relation to technology, customers, products, business plans, financial
         or organizational information or other subject matter pertaining to any
         business of the Company or any of its clients, customers, or licensees
         from this day forward.

5.       You agree to unconditionally and forever release and discharge the
         Company and all of its subsidiaries, officers, directors, and
         employees, and each of them, of an from any and all debts, claims,
         liabilities, demands and cause of action of every kind, nature and
         description, including but not limited to any claim under federal,
         state or local law, including the Age Discrimination in Employment Act,
         the Family Medical Leave Act and any other laws pertaining to
         employment or employment discrimination which you have or may have or
         could assert against the Company as of the date of the Agreement. In
         addition, the Company unconditionally and forever releases, and
         discharges you of and from any and all debts, claims, liabilities,
         demands and cause of action of every kind, nature and description,
         which the Company has or may have or could assert against you as of the
         date of the Agreement, except to the extent arising out of your gross
         negligence or intentional misconduct. Notwithstanding the above, the
         Company shall continue to provide to Gaube the indemnity protections
         provided to Gaube in the Indemnity Agreement previously executed by the
         parties. (Attached hereto as Exhibit "A")

6.       It is further understood and agreed that as part of the consideration
         and inducement for the execution of this Agreement, you and the Company
         specifically waive the provisions of Section 1542 of the California
         Civil Code, and any equivalent law of any state, which reads as
         follows:

         "A general release does not extend to claims which the creditor does
         not know or suspect to exist in his favor at the time of executing the
         release, which if known by him must have materially affected his
         settlement with the debtor."

7.       You represent that no promise, inducement or other agreement not
         expressly contained or referenced in this Separation Agreement has been
         made conferring any benefit upon you; that this Separation Agreement
         and the Indemnity Agreement contain the entire agreement between us
         with respect to any benefit conferred upon you; and that all prior

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         agreements; understandings, oral agreements and writings are expressly
         superseded by this Separation Agreement and are of no further force and
         effect.

8.       This Separation Agreement is entered into governed by the laws of the
         State of California.

9.       You will have until 9:00 A.M. on September 15, 2000, to accept the
         terms of this Separation Agreement. Should you have any questions
         regarding the release terms and conditions contained in this Agreement,
         you are advised to consult with your own personal legal/tax advisor.

10.      To accept this Agreement, please date and return it to Donna D. Godbout
         in the enclosed confidential envelope.


Very truly yours,


/s/ DONNA D. GODBOUT
--------------------
Donna D. Godbout
Vice President



By signing this letter, I acknowledge that I have had an opportunity to review
this Separation Agreement carefully, consult with advisors of my choice, that I
understanding the terms of the Separation Agreement, and I voluntarily agree to
them.



        /s/ J. W. GAUBE                                   9/8/00
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James W. Gaube                                             Date