Mail Stop 4561
August 31, 2005
Mr. Carl E. Berg
Chief Executive Officer
Mission West Properties, Inc.
10050 Bandley Drive
Cupertino, CA 95014
Re: Mission West Properties, Inc.
Form 10-K for Fiscal Year Ended December 31, 2004
Filed March 16, 2005
File No. 0-25235
Dear Mr. Berg:
We have reviewed your filing and have the following
comments.
We have limited our review to only your financial statements and
related disclosures and do not intend to expand our review to
other
portions of your document. Where indicated, we think you should
revise your document in response to these comments. If you
disagree,
we will consider your explanation as to why our comment is
inapplicable or a revision is unnecessary. Please be as detailed
as
necessary in your explanation. In some of our comments, we may
ask
you to provide us with information so we may better understand
your
disclosure. After reviewing this information, we may raise
additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form 10-K for the year ended December 31, 2004
Item 7, Management`s Discussion and Analysis of Financial
Condition
and Results of Operations - Funds from Operations, page 44
1. We note that you use FFO as a measure of performance. You also
indicate that, "along with cash flows from operating activities,
financing activities and investing activities, it provides
investors
with an understanding of our ability to incur and service debt and
make capital expenditures" which suggests that you also use FFO as
a
liquidity measure. Please tell us and in future filings revise
your
disclosure to clarify whether you use FFO as a measure of
operating
performance or liquidity and explain why you believe FFO is a
useful
indicator of operating performance or liquidity. Further, if you
consider FFO to be a measure of liquidity, please also revise your
reconciliation of FFO to the most comparable financial measure
presented in accordance with GAAP. Refer to Item 10(e)(i) of
Regulation S-K.
Item 7A, Quantitative and Qualitative Disclosures About Market
Risk,
page 48
2. Your disclosure here and in Note 2 on page 61 is not consistent
with respect to the fair value of your fixed rate debt. Please
revise your disclosure in future filings to correctly disclose the
fair value of fixed rate debt and update your related discussion,
as
necessary.
Note 2, Summary of Significant Accounting Policies - Impairment of
Long-lived Assets, page 57
3. We note from your disclosure on page 16 that you have numerous
properties with average 2004 occupancies of 0%, 0% occupancy as of
December 31, 2004, or both. We also note that you recognized an
impairment loss related to the one asset held for sale at December
31, 2004. Please tell us how you determined the fair value of the
remaining properties with minimal or no occupancy at December 31,
2004 when measuring any impairment loss under SFAS 144. Please
also
tell us whether any of these properties are subject to the
restriction disclosed on page 11 and how this restriction was
considered in determining the fair value of such property. Refer
to
paragraphs 22-24 of SFAS 144.
Item 9A, Report of Management on Internal Control Over Financial
Reporting, page 85
4. In future filings, please disclose the conclusions of your
principal executive and principal financial officers regarding the
effectiveness of your disclosure controls and procedures as of the
end of the period covered by the report. Refer to Item 307 of
Regulation S-K.
Item 15, Exhibits, Financial Statement Schedules and Reports on
Form
8-K, page 88
5. Please revise your certifications filed as Exhibits 31.1, 31.2
and
31.3 to reflect the language exactly as set forth in Item
601(b)(31)
of Regulation S-K.
As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response. You may wish to provide us with marked copies of
the amendment to expedite our review. Please furnish a cover
letter
with your amendment and proposed revisions that keys your
responses
to our comments and provides any requested information. Detailed
cover letters greatly facilitate our review. Please file your
cover
letter on EDGAR. Please understand that we may have additional
comments after reviewing your amendment and responses to our
comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision. Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Amanda Sledge, Staff Accountant, at (202)
551-
3473 or the undersigned at (202) 551-3431 if you have questions.
Sincerely,
Josh Forgione
Staff Accountant
Mr. Carl E. Berg
Mission West Properties, Inc.
August 31, 2005
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