[Mission West Letterhead]



                                                                 ______ __, 1998

Dear Shareholder:

You are cordially invited to attend a Special Meeting of Shareholders of Mission
West  Properties  ("Mission  West") to be held on ______ __, 1998, at 9:00 a.m.,
Pacific  Standard  Time,  at 10050 Bandley  Drive,  Cupertino,  California  (the
"Mission West Special Meeting").

At the  Mission  West  Special  Meeting,  you  will  be  asked  to  approve  the
reincorporation of Mission West in the State of Maryland which intends to become
a real estate  investment trust ("REIT") for federal income tax purposes for the
1998 tax year,  as well as certain  other  transactions  intended to  effectuate
Mission West's desire to become  actively  engaged in the business of owning and
operating real estate as a self-administered,  self-managed and fully integrated
REIT including:

o       Approval of the sale of 6,495,058  shares of Mission West's common stock
        for $4.50 per share to a group of accredited investors.

o       Ratification  of Mission  West's  becoming the sole general  partner and
        acquiring  an  approximately  12.11%  interest in each of four  existing
        limited partnerships (the "Operating  Partnerships"),  of which I and my
        family and affiliates  own  approximately  83% of the total  partnership
        interests as limited partners.

o       Approval  of the  acquisition  by Mission  West of the right to acquire,
        through  the  Operating  Partnerships,  certain  commercial  R&D pending
        building developments  consisting of approximately 1.02 million rentable
        square  feet from my family,  affiliates  and me for cash or  additional
        limited partnership interests, at our option.

o       Approval  of  the  acquisition  of an  option  with  respect  to  future
        developments on land currently held by my family, affiliates and me.

o       The issuance of up to  93,398,705  shares of Common Stock  issuable upon
        the  redemption or exchange of 93,398,705  units of limited  partnership
        interests  held by or issuable to the limited  partners in the Operating
        Partnership, including 33,919,072 units issuable upon the acquisition of
        the pending development projects mentioned above.

o       Approval  of the  Company's  merger  with its  wholly  owned  subsidiary
        Mission West Properties, Inc., a Maryland corporation.

Your Board of Directors believes that all of these transactions are fair to, and
in the best  interests  of,  Mission  West and its  shareholders.  The Board has
unanimously  approved the transactions and unanimously  recommends that you vote
in favor of the related proposals submitted to the shareholders.

The  accompanying  Proxy  Statement/Prospectus   provides  detailed  information
concerning  the   transactions,   the  reasons  for  your  Board  of  Directors'
recommendation   and  certain   additional   information,   including,   without
limitation,  the  information  set forth under the heading "RISK FACTORS," which
describes,  among other items,  potential  adverse  effects for the Mission West
shareholders.  We urge you to carefully  consider all of the  information in the
Proxy  Statement/Prospectus.  It is  important  that your shares of Mission West
common stock be represented at the Mission West Special  Meeting,  regardless of
the number of shares you hold. Therefore, please complete, sign, date and return
your  proxy  card as soon as  possible,  whether  or not you plan to attend  the
Mission West Special Meeting.  This will not prevent you from voting your shares
in person if you subsequently choose to attend the Mission West Special Meeting.

                               Sincerely,



                               Carl E. Berg
                               Chairman of the Board