SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934

Filed by the Registrant [x]

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Check the appropriate box:

[ ] Preliminary Proxy Statement

[ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))

[x] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

Bedford Property Investors, Inc.
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(Name of Registrant as Specified in Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):

[x] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.

(1) Title of each class of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
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the offsetting fee was paid previously. Identify the previous
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(4) Date Filed:

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[Letterhead of Bedford Property Investors]

LOGO

Dear Stockholder:

The directors and officers join me in extending to you a cordial invitation to
attend our Annual Meeting of Stockholders. This meeting will be held on Friday,
May 16, 1997 at 1:00 p.m. at the Lafayette Park Hotel, 3287 Mount Diablo
Boulevard, Lafayette, California.

Enclosed please find the Notice of Meeting, Proxy Statement, and one of two
separate Proxy Cards, one to be used by Common Stockholders and the other to be
used by Preferred Stockholders. At this Meeting we are seeking to elect seven
directors, two of whom will be elected by the Preferred Stockholders, voting
separately as a single class, and five of whom will be elected by the Common
Stockholders, voting separately as a single class. In addition, the Common
Stockholders will also be asked to approve an amendment to the Company's Charter
to increase the authorized number of shares of the Company's Common Stock from
15 million to 50 million and to ratify the appointment of KPMG Peat Marwick LLP
as the Company's independent public accountants for the upcoming year.

Your management and Board of Directors unanimously recommend that you vote FOR
all nominees for directors and FOR the other proposals.

Please take time to review and vote on each proposal. Your vote is important.
Please remember to return your Proxy Card.

I hope to see you at the Annual Meeting.

Very truly yours,

/s/ Peter B. Bedford

Peter B. Bedford
Chairman of the Board and
Chief Executive Officer
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BEDFORD PROPERTY INVESTORS, INC.
270 LAFAYETTE CIRCLE
LAFAYETTE, CA 94549

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 16, 1997

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TO THE STOCKHOLDERS:

The Annual Meeting of Stockholders of Bedford Property Investors, Inc., a
Maryland corporation (the "Company"), will be held at the Lafayette Park Hotel,
3287 Mount Diablo Boulevard, Lafayette, California, on Friday, May 16, 1997 at
1:00 p.m. local time, to consider the following proposals:

1. Election of five directors by the holders of the Common Stock for the
ensuing year (the "Common Stock Directors");

2. Election of two directors by the holders of the Preferred Stock for the
ensuing year (the "Preferred Stock Directors");

3. To approve an amendment to the Company's Charter to increase the number
of authorized shares of the Company's Common Stock, par value $.02 per share
(the "Common Stock"), from 15 million to 50 million shares.

4. To ratify the appointment by the Board of Directors of the Company's
independent public accountants for the year ending December 31, 1997; and

5. To transact such other business as may properly come before the meeting.

Only stockholders of record at the close of business on March 31, 1997 are
entitled to notice of and to vote at the meeting and any adjournment or
postponement thereof.

STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. THE
PRESENCE AT THE MEETING, IN PERSON OR BY PROXY, OF STOCKHOLDERS ENTITLED TO CAST
A MAJORITY OF ALL THE VOTES ENTITLED TO BE CAST AT THE MEETING SHALL CONSTITUTE
A QUORUM. THIS PROXY STATEMENT IS ACCOMPANIED BY ONE OF TWO FORMS OF PROXY CARD:
ONE CARD FOR USE BY THE HOLDERS OF THE COMPANY'S COMMON STOCK AND THE OTHER CARD
FOR USE BY THE HOLDERS OF THE COMPANY'S PREFERRED STOCK. IF YOU CANNOT ATTEND
THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE APPROPRIATE PROXY CARD
IN THE ENCLOSED ENVELOPE AS PROMPTLY AS POSSIBLE.

By Order of the Board of Directors

/s/ Jennifer I. Mori

JENNIFER I. MORI
Secretary

April 14, 1997
Lafayette, California
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BEDFORD PROPERTY INVESTORS, INC.
270 LAFAYETTE CIRCLE
LAFAYETTE, CA 94549

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PROXY STATEMENT

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MAY 16, 1997
ANNUAL MEETING OF STOCKHOLDERS

INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors (the "Board of Directors" or the "Board") of Bedford
Property Investors, Inc., a Maryland corporation (the "Company"), of proxies
from the holders (the "Common Stockholders") of the Company's issued and
outstanding shares of Common Stock, par value $.02 per share (the "Common
Stock"), and from the holders (the "Preferred Stockholders" and, collectively
with the Common Stockholders, the "Stockholders") of the Company's Series A
Convertible Preferred Stock, par value $.01 per share (the "Preferred Stock"),
to be exercised at the Annual Meeting of Stockholders to be held on Friday, May
16, 1997, at 1:00 p.m., local time, and at any adjournment(s) or postponement(s)
of such meeting (the "Annual Meeting"), for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders. Unless otherwise
indicated, all information contained in this Proxy Statement, including, but not
limited to, Common Stock share numbers, share prices and per share amounts,
reflects a one-for-two reverse stock split of the Common Stock effected on March
29, 1996.

The purpose of the Annual Meeting is to consider and act upon the following
proposals:

1. Election of five directors by the holders of the Common Stock for
the ensuing year (the "Common Stock Directors");

2. Election of two directors by the holders of the Preferred Stock for
the ensuing year (the "Preferred Stock Directors");

3. To approve an amendment to the Company's Charter to increase the
authorized number of shares of Common Stock from 15 million to 50 million;

4. To ratify the appointment by the Board of Directors of the
Company's independent public accountants for the year ending December 31,
1997; and

5. To transact such other business as may properly be brought before
the Annual Meeting and any postponements or adjournments thereof.

This Proxy Statement and the enclosed Proxy Card are being mailed to the
Stockholders on or about April 16, 1997.

The holders of record of the shares of Common Stock at the close of
business on March 31, 1997 (the "Record Date") are entitled to notice of and to
vote at the Annual Meeting in relation to proposals 1, 3 and 4, above, on which
they will vote as a class. The holders of record of Preferred Stock at the close
of business on the Record Date are entitled to notice of and to vote at the
Annual Meeting only in relation to proposal 2, on which they will vote as a
separate class. At the close of business on the Record Date, 11,126,450 shares
of Common Stock and 8,333,334 shares of Preferred Stock were outstanding, each
of which is entitled to cast one vote (collectively, the Common Stock and
Preferred Stock are referred to herein as the "Outstanding Stock").
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The presence at the Annual Meeting, in person or by proxy, of Stockholders
holding shares entitled to cast a majority for each proposal of all the votes
entitled to be cast at the Annual Meeting shall constitute a quorum for the
transaction of business at the Annual Meeting. Abstentions and broker non-votes
(i.e., votes not cast by a broker or other record holder in "street" or nominee
name solely because such record holder does not have discretionary authority to
vote on the matter) will be counted toward the presence of a quorum. The Common
Stock Directors (Proposal 1) will be elected by a plurality of all the votes
cast at the Annual Meeting. Similarly, the Preferred Stock Directors (Proposal
2) will be elected by a vote of a plurality of the shares of Preferred Stock
voted at the Annual Meeting. Accordingly, abstentions as to the election of
directors will not affect the election of the candidates receiving the plurality
of votes. The affirmative vote of holders of a majority of all the outstanding
shares of Common Stock is required for the approval of the proposed charter
amendment (Proposal 3). Abstentions and broker non-votes as to this proposal
will have the same effect as votes against the proposal. The affirmative vote of
a majority of all the votes cast by holders of Common Stock is necessary for
ratification of the appointment of independent public accountants for the fiscal
year ending December 31, 1997 (Proposal 4). Abstentions as to this proposal will
not be counted as votes cast and will have no effect on the result of the vote
on this proposal.

Under the Maryland General Corporation Law ("MGCL"), holders of shares of
Outstanding Stock will not be entitled to appraisal rights with respect to such
shares with respect to any of the proposals.

All expenses in connection with the solicitation of proxies will be borne
by the Company. In addition to solicitation by mail, officers and directors of
the Company may also solicit proxies by mail, telephone, facsimile or in person.
Additionally, the Company may retain the services of a professional proxy
solicitation firm to assist in the solicitation of proxies, at a cost of
approximately $5,000 plus expenses, which would be borne by the Company.

This proxy statement is accompanied by one of two forms of proxy card: one
card is for use by the Common Stockholders and the other card is for use by the
Preferred Stockholders. The shares of Common Stock represented by properly
executed Common Stock proxy cards will be voted at the Annual Meeting as
indicated or, if no instruction is given, in favor of proposals 1, 3 and 4. The
shares of outstanding Preferred Stock represented by all properly executed
Preferred Stock proxy cards will be voted at the Annual Meeting as indicated or,
if no instruction is given, in favor of proposal 2. The Company does not
presently know of any other business which may come before the Annual Meeting.
Any person giving a proxy has the right to revoke it at any time before it is
exercised (a) by filing with the Secretary of the Company a duly signed
revocation or proxy bearing a later date or (b) by voting in person at the
Annual Meeting.

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PROPOSAL 1

ELECTION OF COMMON STOCK DIRECTORS

The Company's Charter provides that the Preferred Stockholders have the
right, subject to expansion in certain situations, to elect two members of the
Board of Directors annually and that the Common Stockholders have the right to
elect the remaining directors. The Company's Board of Directors is currently
composed of seven members. Accordingly, the Common Stockholders, voting as a
class, have the right to elect five members to the Board of Directors to serve
until the next annual meeting of Stockholders and until their respective
successors are duly elected and qualified.

The Board of Directors has nominated the five individuals listed below to
serve as directors of the Company. Management knows of no reason why any of
these nominees would be unable or unwilling to serve, but if any nominee should
be unable or unwilling to serve, the Common Stock proxies will be voted for the
election of such other persons for the office of director as management may
recommend in the place of such nominee.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE COMMON STOCKHOLDERS VOTE "FOR"
THE FIVE NOMINEES LISTED BELOW.

NAME AGE BUSINESS EXPERIENCE DURING PAST FIVE YEARS DIRECTOR SINCE
---------------------- --- ---------------------------------------------------- --------------

Claude M. Ballard 67 Mr. Ballard is also a Trustee of The Urban Land 1992
Institute, and a Limited Partner of the Goldman
Sachs Group, L.P. Mr. Ballard also serves on the
Board of Directors of CBL & Associates, a REIT, and
Taubman Center Properties, Inc., a REIT. He is also
a Trustee of Mutual Life Insurance Company of New
York, the Chairman of Merit Equity Partners, Inc., a
property acquisition and management company, and a
Director of Horizon Hotels, Inc., a hotel ownership
and management company. Mr. Ballard attended Memphis
State University and the University of Tennessee.
Peter B. Bedford 59 Mr. Bedford has been Chairman of the Board since May 1991
1992 and Chief Executive Officer since November
1992. Mr. Bedford has been engaged in the commercial
real estate business, primarily in the Western
United States, for over 30 years and has been
responsible for the acquisition, ownership,
development and management of an aggregate of
approximately 18 million square feet of industrial,
office and retail properties, as well as land, in 14
states. Mr. Bedford is the sole stockholder of
Bedford Property Holdings Limited ("BPHL"). Mr.
Bedford serves on the board of directors of
BankAmerica Corporation, Bixby Ranch Company, a real
estate investment company, and First American Title
Guarantee Co., a title insurance company. Mr.
Bedford is the recipient of numerous awards
recognizing his contributions to the real estate
industry and serves as a trustee of the Urban Land
Institute, a governor of the Urban Land Foundation
and an overseer of the Hoover Institution. His
previous experience also includes serving as Vice
Chairman of the National Realty Committee and of the
Hoover Institution and as Chairman of the Real
Estate Advisory Board of the Wharton School of
Business. Mr. Bedford received his B.A. in Economics
from Stanford University.

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NAME AGE BUSINESS EXPERIENCE DURING PAST FIVE YEARS DIRECTOR SINCE
---------------------- --- ---------------------------------------------------- --------------

Anthony M. Downs 65 Mr. Downs is a Senior Fellow at the Brookings 1992
Institution, a non-profit policy research
organization, and is a consultant to Salomon
Brothers Inc., and Aetna Realty Investors, the real
estate investment subsidiary of Aetna Life and
Casualty Company. Mr. Downs serves on the Board of
Directors of each of Pittway Corporation, a holding
company with equity interests in publishing and
manufacturing entities, General Growth Properties,
Inc., a REIT, Massachusetts Mutual Life Insurance
Co., the Urban Institute, the NAACP Legal and
Educational Defense Fund, Inc., the National Housing
Partnership Foundation, a developer of low-income
housing, and the Essex Property Trust, Inc. Mr.
Downs received a B.A. in International Relations and
Political Theory from Carlton College and an M.A.
and Ph.D. in Economics from Stanford University.
Anthony M. Frank 65 Mr. Frank served as Postmaster General of the United 1992
States from 1988 to 1992 and as Chairman and Chief
Executive Officer of First Nationwide Bank from 1971
to 1988. Prior to that time, he was Chairman of the
Federal Home Loan Bank of San Francisco, Chairman of
the California Housing Finance Agency, Chairman of
Independent Bancorp of Arizona, and the first
Chairman of the Federal Home Loan Mortgage
Corporation Advisory Board. Currently, he is
Chairman of Acrogen, Inc., a biotechnology company;
Chairman of Belvedere Capital Partners;
consultant/director of TransAmerica HomeFirst; a
residential mortgage company; and serves on the
Board of Directors of Crescent Real Estate Equities,
a REIT; Irvine Apartment Communities, a REIT;
Charles Schwab & Co., a brokerage firm;
Temple-Inland, Inc., a forest products company;
General American Investors Company, Inc., a
publicly-traded closed-end investment fund; Living
Centers of America, Inc., a company engaged in the
operation of long-term health care centers; and
Cotelligent, Inc., a temporary services company. Mr.
Frank received a B.A. from Dartmouth College and an
M.B.A. from the Tuck School of Business at
Dartmouth.
Martin I. Zankel, Esq. 62 Mr. Zankel is the Senior Partner of the law firm of 1992
Bartko, Zankel, Tarrant & Miller. His previous
experience includes serving as Chairman of the Board
of Directors, Chief Executive Officer and President
of Landsing Pacific Fund, Inc., a REIT. Mr. Zankel
received a B.S. from the University of California,
and his LL.D. from the Hastings College of the Law.

COMPENSATION OF DIRECTORS

Members of the Board of Directors who are not employees of the Company are
currently paid an annual retainer fee of $12,500 and an additional fee of $2,500
for each Board meeting attended. Any non-employee Director attending in person a
duly constituted meeting of a committee of the Board of Directors of which such
Director is a member receives, in addition to any other fees to which he or she
may be entitled, a separate meeting attendance fee equal to $2,500 for his or
her attendance in person at any such committee meeting not held on the same day,
the day preceding or the day following a regular or special meeting of the Board
of Directors. Any non-employee member of the Board of Directors who participates
in a regular or special meeting of the Board of Directors by conference
telephone or similar communications equipment receives $600 for each such
meeting. Non-Employee Directors are reimbursed for out-of-pocket expenses in
connection with attendance at meetings. If a non-employee member of the Board of
Directors travels to conduct a site inspection of a property to be acquired by
the Company, such Director is paid $1,000 per day

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and reimbursed for related travel expenses. Non-employee Directors receive no
other compensation for their services on behalf of the Company (except under the
1992 Directors' Stock Option Plan, as amended).

COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors held four regular meetings and no special meeting
during 1996. Each member of the Board of Directors attended at least 75% of the
aggregate number of meetings of the Board of Directors and the committees of
which he was a member during the last year.

The Company has an Audit Committee which consists of Messrs. Ballard
(Chairman), Downs, Frank and Nolan. The Audit Committee reviews the internal
controls of the Company and reviews the services performed and to be performed
by the independent accountants of the Company during the year. The members of
the Audit Committee also meet with the independent accountants to review the
scope and results of the annual audit. The Audit Committee met twice during
1996.

The Company also has a Compensation Committee which consists of Messrs.
Downs (Chairman), Ballard, Eastman and Frank. The Compensation Committee is
responsible, with respect to stock options, for the administration of stock
option plans of the Company, including the Employee Stock Option Plan and the
1992 Directors' Stock Option Plan, as amended. The Compensation Committee met
twice during 1996.

The Company also has a Nominating Committee which consists of Messrs.
Bedford (Chairman), Eastman, Frank and Zankel. The Nominating Committee is
responsible for submitting nominations for the various officers and for
directors, elections for whom are held at the annual meeting of Stockholders.
The Nominating Committee does not consider nominees proposed by Stockholders.
The Nominating Committee met once during 1996.

Messrs. Eastman and Nolan were placed on the Board in September 1995 in
connection with the sale of the Preferred Stock to Bed Preferred No. 1 Limited
Partnership.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Compensation Committee during 1996 were Messrs. Downs,
Ballard, Eastman and Frank. None of these individuals were officers or employees
of the Company at any time during the year ended December 31, 1996, nor have any
of these individuals ever been an officer of the Company or any of its
subsidiaries. In addition, none of the executive officers of the Company served
on the compensation committee of another entity or as a director of an entity
which employs any of the members of the Compensation Committee.

Martin I. Zankel, a director of the Company, and his associates provided
legal services to the Company for which his firm was paid, in the aggregate,
$213,000 in 1996.

On December 17, 1996, in a "Down REIT" transaction, the Company acquired an
industrial property in Modesto, California in exchange for 108,495 units of
limited partnership interest (the "Units") in Bedford Realty Partners, L.P (the
"Partnership"), a partnership in which the Company is the general partner.
Pursuant to this transaction, Martin I. Zankel, a member of the Board of
Directors of the Company, acquired 8,991 Units in exchange for his 9% ownership
interest in such property. Mr. Zankel did not participate in the approval of
this transaction. Each holder of the Units may, subject to certain limitations,
require that the Partnership redeem all or a portion of such holder's Units
beginning on March 17, 1997. Upon redemption, a holder will receive, at the
option of the Company, as general partner of the Partnership, either (i) a
number of shares of Common Stock equal to the number of Units redeemed or (ii)
cash in an amount equal to the average market value of the number of shares of
Common Stock the holder would have received pursuant to (i) above. In lieu of
the Partnership redeeming Units, the Company, as general partner, in its sole
discretion, has the right to assume directly and satisfy the redemption right of
the holder of the Units.

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PROPOSAL 2

ELECTION OF PREFERRED STOCK DIRECTORS

The Company's Charter provides that the Preferred Stockholders, voting as a
class, have the right, subject to expansion in certain situations, to elect two
members of the Board of Directors annually, to serve until the next annual
meeting of Stockholders and until their respective successors are duly elected
and qualified.

The Board of Directors has nominated the two individuals listed below to
serve as directors of the Company. Management knows of no reason why either of
these nominees would be unable or unwilling to serve, but if either nominee
should be unable or unwilling to serve, the Preferred Stock proxies will be
voted for the election of such other persons for the office of director as
management may recommend in the place of such nominee.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE PREFERRED STOCKHOLDERS VOTE
"FOR" THE TWO NOMINEES LISTED BELOW.

NAME AGE BUSINESS EXPERIENCE DURING PAST FIVE YEARS DIRECTOR SINCE
- ---------------------- --- ------------------------------------------------ --------------

Thomas G. Eastman 50 Mr. Eastman is a director and co-founder of 1995
Aldrich Eastman Waltch, a national real estate
investment advisor. He is a board member and
former Chairman of the National Association of
Real Estate Investment Managers. He is a Member
of the Urban Land Institute and its Finance and
Membership Committees. He is a Member of the
Executive Committee of the Institutional Real
Estate Clearinghouse. Mr. Eastman received a
B.A. from Stanford University and an M.B.A. from
Harvard University.
Thomas H. Nolan, Jr. 39 Mr. Nolan serves as a director of, and is 1995
responsible for the management of commingled
investment fund portfolios for, AEW Capital
Management, L.P. (AEW), a national real estate
investment adviser. Mr. Nolan joined AEW in
1984. Mr. Nolan serves on the Board of Directors
of Crocker Trust, Inc., a REIT, and the
Partnership Committee of the Taubman Realty
Group L.P. Mr. Nolan earned a B.B.A. in Business
Administration from the University of
Massachusetts.

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PROPOSAL 3

APPROVAL OF AMENDMENTS TO THE COMPANY'S CHARTER

On March 19, 1997, the Board of Directors unanimously adopted, subject to
Common Stockholder approval, an amendment to Article V the Company's Charter to
increase the authorized number of shares of Common Stock from 15 million to 50
million. The Common Stockholders are asked to approve the adoption of this
amendment to the Company's Charter.

DESCRIPTION OF THE PROPOSAL

The text of Article 5, as it is proposed to be amended, is as follows:

"Section 1. Authorized Shares. The total number of shares of stock which
the Corporation has authority to issue is 70,000,000 shares, of which
50,000,000 shares are shares of Common Stock, $0.02 par value per share
("Common Stock"), 10,000,000 shares are shares of Preferred Stock, $0.01
par value per share ("Preferred Stock"), and 10,000,000 shares are
shares of Series A Convertible Preferred Stock, $0.01 par value per
share ("Series A Preferred"). The aggregate par value of all authorized
shares of stock having a par value is $1,200,000."

The additional Common Stock to be authorized by adoption of the proposed
amendment would have rights identical to the currently outstanding Common Stock
of the Company. Adoption of the proposed amendment and issuance of the Common
Stock would not affect the rights of the holders of currently outstanding Common
Stock, except for effects incidental to increasing the number of shares of the
Common Stock outstanding, such as dilution of the earnings per share and voting
rights of current holders of Common Stock. The holders of Common Stock do not
presently have preemptive rights to subscribe for the additional Common Stock
proposed to be authorized.

Under the Company's current Charter, the Company has the authority to issue
15,000,000 shares of Common Stock, $0.02 par value per share. At the close of
business on the Record Date, 11,126,450 shares of Common Stock were outstanding
and held of record by 501 holders. Accordingly, as of the Record Date, after
taking into account the 1,400,000 shares reserved for issuance upon the exercise
of options granted under the Company's option plans, the 900,000 shares of
Common Stock currently reserved for issuance pursuant to the Company's Dividend
Reinvestment and Stock Purchase Plan and the 95,049 shares of Common Stock
potentially issuable upon the redemption of certain units of limited partnership
in Bedford Realty Partners, L.P., there remained approximately 1,478,501 of
Common Stock available for issuance.

Beginning on September 18, 1997, the 8,333,334 shares of Preferred Stock
currently outstanding will become convertible into shares of Common Stock. The
conversion rate for these shares of Preferred Stock is currently set at 1/2
share of Common Stock for each share of Preferred Stock. Accordingly, the
Company may be required to issue as many as 4,166,667 shares of Common Stock
pursuant to these conversion provisions. If the Company is unable to obtain
shareholder approval for the proposed amendment to its Charter, it would have an
insufficient number of shares of Common Stock authorized to satisfy the
Preferred Stockholders' conversion rights. The proposed amendment would provide
for approximately 32,311,834 shares of Common stock available for issuance,
assuming full conversion of the Preferred Stock into Common Stock at the current
conversion rate.

The purpose of the increase in authorized shares is to provide sufficient
shares of Common Stock to satisfy the conversion rights of the Preferred Stock
and to provide additional shares of Common Stock that could be issued for
corporate purposes without further stockholder approval unless required by
applicable law or regulation. Future uses for these additional shares could
include effecting acquisitions of other businesses or properties, increasing the
shares available for issuance pursuant to the Company Stock Dividend and
Dividend Reinvestment Plan, paying stock dividends, providing equity incentives
to employees, officers or directors and securing additional financing for the
operation of the Company through the issuance of additional shares. The Board of
Directors believes that it is in the best interests of the Company to have
additional shares of Common stock authorized at this time in order to alleviate
the expense and delay of holding a special meeting of stockholders if and when
there is a need to issue additional shares of Common Stock. The Company is

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continually evaluating various alternatives for raising additional capital
through the sale of its Common Stock, including increasing the number of shares
authorized under its Dividend Reinvestment and Stock Purchase Plan and making
shares available for sale pursuant to an underwritten public offering. The
Company anticipates completion of one or more of these financing events during
1997.

The additional shares of Common Stock that would become available for
issuance if the proposed amendment were adopted could also be used by the
Company to oppose a hostile takeover attempt or delay, defer or prevent changes
of control of the Company. For example, without further stockholder approval,
the Board of Directors could strategically sell shares of Common Stock in a
private transaction to purchasers who would oppose a takeover or favor the
current Board of Directors. Although this proposal to increase the number of
authorized shares of Common Stock has been prompted by business and financial
considerations, not by the threat of any hostile takeover attempt (nor is the
Board of Directors currently aware of any such attempts directed at the
Company), stockholders nevertheless should be aware that approval of the
proposal could facilitate future efforts by the Company to deter, defer or
prevent changes of control of the Company, including transactions in which the
stockholders might otherwise receive a premium for their shares over then-
current market prices.

VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS

An amendment to the Company's Charter requires, under Section 2-104(b)(4)
of the MGCL and the Company's Charter, the affirmative vote of a majority of the
votes entitled to be cast on the matter. Accordingly, failure to vote for this
amendment, even by abstaining or by failing to be represented at the Annual
Meeting, constitutes a vote against the amendment. If the amendment is adopted,
it will become effective upon filing of the Articles of Amendment with the State
department of Assessments and Taxation of Maryland. THE BOARD UNANIMOUSLY
RECOMMENDS THAT YOU VOTE "FOR" THIS AMENDMENT TO THE COMPANY'S CHARTER (AS SET
FORTH IN EXHIBIT A ATTACHED HERETO). IN THE ABSENCE OF INSTRUCTIONS TO THE
CONTRARY, PROXIES SOLICITED IN CONNECTION WITH THIS PROXY STATEMENT WILL BE SO
VOTED.

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PROPOSAL 4

RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS

KPMG Peat Marwick LLP, Certified Public Accountants, served as independent
accountants of the Company for the fiscal year ended December 31, 1996. The
Board of Directors, acting upon the recommendation of its audit committee, has
appointed KPMG Peat Marwick LLP to audit the financial statements of the Company
for the fiscal year ending December 31, 1997. A representative of KPMG Peat
Marwick LLP is expected to be present at the Annual Meeting and will have the
opportunity to make a statement if he so desires and will be available to
respond to appropriate questions from Stockholders.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE COMMON STOCKHOLDERS VOTE "FOR"
RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS INDEPENDENT
ACCOUNTANTS OF THE COMPANY.

INFORMATION REGARDING EXECUTIVE OFFICERS

EXECUTIVE OFFICERS OF THE COMPANY

The following five persons serve as executive officers of the Company:

NAME AGE BUSINESS EXPERIENCE DURING PAST FIVE YEARS OFFICER SINCE
- -------------------- --- ------------------------------------------------------ -------------

Peter B. Bedford 59 Mr. Bedford has been Chairman of the Board since May 1992
1992 and Chief Executive Officer since November 1992.
As of March 31, 1997, Mr. Bedford assumed the
responsibilities of chief financial officer. Mr.
Bedford has been engaged in the commercial real estate
business, primarily in the Western United States, for
over 30 years and has been responsible for the
acquisition, ownership, development and management of
an aggregate of approximately 18 million square feet
of industrial, office and retail properties, as well
as land in 14 states. Mr. Bedford is the sole
stockholder of BPHL. Mr. Bedford serves on the board
of directors of BankAmerica Corporation, Bixby Ranch
Company, a real estate investment company, and First
American Title Guarantee Co., a title insurance
company. Mr. Bedford is the recipient of numerous
awards recognizing his contributions to the real
estate industry and serves as a trustee of the Urban
Land Institute, a governor of the Urban Land
Foundation and an overseer of the Hoover Institution.
His previous experience also includes serving as Vice
Chairman of the National Realty Committee and of the
Hoover Institution and as Chairman of the Real Estate
Advisory Board of the Wharton School of Business. Mr.
Bedford received his B.A. in Economics from Stanford
University.

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NAME AGE BUSINESS EXPERIENCE DURING PAST FIVE YEARS OFFICER SINCE
- -------------------- --- ------------------------------------------------------ -------------

James R. Moore 56 Mr. Moore joined the Company as Vice President of 1995
Property/Asset Management in September 1995. From 1983
to 1994, he was Managing Director of the San Francisco
office of Cushman and Wakefield, an international
commercial real estate services firm. Mr. Moore was
also a branch manager and commercial real estate
broker at Cushman and Wakefield. He has served on the
Board of Trustees of The Lindsay Museum in Walnut
Creek, California since 1984. Mr. Moore has studied at
the Commercial Investment Real Estate Institute and
has lectured at the University of San Francisco and
San Francisco State University. He received a B.A. in
History from the University of California at Berkeley,
an M.B.A. from the University of San Francisco and is
currently working toward a Doctor of Business
Administration at Golden Gate University.
Robert E. Pester 40 Mr. Pester has been Vice President of Acquisitions of 1994
Bedford Acquisitions, Inc. since February 1994. Prior
to joining Bedford Acquisitions, Inc., he was a real
estate investment consultant from 1992 to 1993,
President of the Development Division of BPHL from
1989 to 1992 and Vice President of Cushman & Wakefield
in Northern California from 1980 to 1989. Mr. Pester
received a B.S. in Economics and in Political Science
from the University of California at Santa Barbara.
Hanh Kihara 49 Ms. Kihara has been the Controller of the Company 1993
since May 1993. Prior to joining the Company, she was
Controller and Assistant Controller of BPHL from 1990
to 1993. From 1986 to 1990, Ms. Kihara was a Manager
of Armstrong, Gilmour and Associates, a certified
public accounting firm. Ms. Kihara has been a
certified public accountant since 1989. Ms. Kihara
received a B.S. in Administration and Accounting from
California State University -- Hayward.

COMPENSATION OF NAMED EXECUTIVE OFFICERS

The following table sets forth information regarding compensation paid by
the Company for services rendered during the past three years for the four most
highly compensated executive officers of the Company who were employed by the
Company as of December 31, 1996 (collectively, the "Named Executive Officers").
No executive officer other than the Named Executive Officers earned more than
$100,000 on an annualized basis in any year. The salary of the Vice
President -- Acquisitions was, as of December 31, 1994, paid by BPI
Acquisitions, a separate division of the Company which was funded by Mr.
Bedford, and as of

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January 1, 1995 was paid by Bedford Acquisitions, Inc. See "Certain
Relationships and Related Transactions -- Funding of Acquisition and Financing
Costs."

SUMMARY COMPENSATION TABLE

LONG-TERM
COMPENSATION
---------------------
SECURITIES
UNDERLYING
ANNUAL COMPENSATION OPTIONS/SARS
---------------------------- --------------------- ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS SARS COMPENSATION(8)
- ---------------------------------------- ---- -------- -------- ------ ----- ---------------

Management of Bedford Property
Investors:
Peter B. Bedford...................... 1996 $150,000 $100,000(4) 10,000(5) -0- $ 6,435
Chief Executive Officer 50,000(6)(7)
1995 $150,000 $ 50,000 5,000(5) -0- $ 6,418
20,000(6) -0-
1994 $150,000 -0- 5,000(5) -0- $ 3,897
25,000(6)
Donald A. Lorenz(1)................... 1996 $150,000 $ 90,000 50,000(6)(7) -0- $ 5,835
Executive Vice President and 1995 $150,000 $ 87,133 25,000(6)(7) -0- $ 2,668
Chief Financial Officer 1994 $ 25,000 -0- -0- -0- $ 38
James R. Moore(2)..................... 1996 $150,000 $ 50,000 50,000(6)(7) -0- $ 135
Vice President Property/Asset 1995 $ 50,000 -0- -0- -0- $ 41
Management
Hanh Kihara........................... 1996 $ 75,000 $ 25,000 10,000(6)(7) -0- $ 1,635
Controller 1995 $ 72,300 $ 20,000 5,000(6) -0- $ 1,635
1994 $ 71,400 -0- 5,000(6) 5,000 $ 135
Management of Bedford Acquisitions,
Inc.:
Robert E. Pester(3)................... 1996 $150,000 $200,000 50,000(6)(7) -0- $ 5,835
Vice President -- Acquisitions 1995 $150,000 $149,933 25,000(6)(7) -0- $ 2,668
1994 $133,558 -0- 10,000(6)(7) 5,000 $ 90

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

(1) Mr. Lorenz did not commence full-time employment with the Company until
January 1, 1995. From September 1, 1994 to December 31, 1994 he was a
part-time employee. Mr. Lorenz resigned from his position with the Company
as of March 31, 1997.

(2) Mr. Moore commenced employment with the Company on September 1, 1995.

(3) Mr. Pester commenced employment with the Company in February 1994.
Commencing January 1, 1995, Mr. Pester was employed by Bedford Acquisitions,
Inc. All of Mr. Pester's compensation was paid by Bedford Acquisitions,
Inc., a California corporation wholly-owned by Mr. Bedford. See "Certain
Relationships and Related Transactions -- Funding of Acquisitions and
Financing Costs."

(4) 50% of Mr. Bedford's 1996 bonus was paid by Bedford Acquisitions, Inc., a
California corporation wholly-owned by Mr. Bedford. See "Certain
Relationships and Related Transactions -- funding of Acquisitions and
Financing Costs."

(5) Represents stock options granted pursuant to the 1992 Directors' Stock
Option Plan, as amended.

(6) Represents stock options granted pursuant to the Employee Stock Option Plan.

(7) The stock options granted to certain executives pursuant to the Employee
Stock Option Plan on May 16, 1996 initially expired 90 days after the grant
date. However, the options included a provision extending the expiration
date in certain circumstances. Specifically, for each option exercised by an
executive, the expiration date on one of that executives' remaining options
was extended until May 16, 2006. Pursuant to this provision, Mr. Bedford,
Mr. Lorenz, Mr. Moore and Mr. Pester each exercised 25,000 options, thereby
extending the expiration date on their remaining options granted in 1996.
Ms. Kihara elected not to exercise any options granted to her in 1996. Thus,
all of Ms. Kihara's 10,000 options have expired. In addition, each executive
was entitled to finance the exercise of his or her options pursuant to the
Management Stock Acquisition Program. Under the program, options exercised
by key members of management within ninety days of the grant date may be
exercised and paid for either in cash or with a notes payable to the
Company. All of the options exercised by Mr. Bedford, Mr. Lorenz, Mr. Moore
and Mr. Pester were financed with note payable to the Company. See "Certain
Relationships and Related Transactions -- Indebtedness of Management."

(8) Includes auto allowance (in an aggregate amount of $13,200 for 1996, $6,900
for 1995 and $3,800 for 1994), premiums paid by the Company for term life
insurance (in an aggregate amount of $675 for 1996, $530 for 1995 and $360
for 1994) and matching contributions under the Company's 401(k) Plan (in an
aggregate amount of $6,000 for 1996 and $6,000 for 1995). The Company's
401(k) Plan was implemented in 1995.

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OPTION GRANTS

The following table sets forth certain information concerning options
granted during 1996 to the Named Executive Officers.

OPTION GRANTS IN 1996

INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------------------------------------- VALUE OF ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF STOCK
SECURITIES TOTAL OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO OPTION TERM
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION -----------------------
NAME GRANTED FISCAL YEAR PRICE DATE 5% 10%
- ----------------------- ---------- ------------- -------- ---------- -------- ----------

Peter B. Bedford....... 10,000(2) N/A $14.22 11/16/2006 $ 89,429 $ 226,630
50,000(3)(4) 18.7% $13.00 5/16/2006 $408,782(5) $1,035,933(5)
Donald A. Lorenz(1).... 50,000(3)(4) 18.7% $13.00 5/16/2006 $408,782(5) $1,035,933(5)
James R. Moore......... 50,000(3)(4) 18.7% $13.00 5/16/2006 $408,782(5) $1,035,933(5)
Hahn Kihara............ 10,000(3)(4) 3.7% $13.00 N/A $102,196(5) $ 258,984(5)

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

(1) Mr. Lorenz resigned from his position with the Company as of March 31, 1997.

(2) Stock Options granted pursuant to 1992 Directors Stock Option Plan, as
amended, which options vest and become exercisable six months from the date
of grant.

(3) Stock Options granted pursuant to Employee Stock Option Plan.

(4) See footnote 7 to the Summary Compensation Table on page 13.

(5) The potential realizable value assumes for each employee that all of the
options granted in 1996 were still outstanding, even though each of Mr.
Bedford, Mr. Lorenz, Mr. Moore and Mr. Pester has already exercised 25,000
options and Ms. Kihara's options have expired.

AGGREGATE OPTION EXERCISES IN 1996 AND VALUES AT YEAR-END 1996

The following table sets forth information regarding the number of shares
acquired and value realized for options exercised by the Named Executive
Officers during the year ended December 31, 1996 and the number and aggregate
dollar value of unexercised options held at the end of 1996.

AGGREGATED OPTIONS/SAR
EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTIONS/SAR VALUES

VALUE OF SECURITIES
NUMBER OF SECURITIES UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/SARS AT YEAR-END OPTIONS AT YEAR-END(1)
ACQUIRED ON VALUE ----------------------------- -----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------- ----------- -------- ----------- ------------- ----------- -------------

Peter B. Bedford....... -0-(2) -0- 50,000 -0- $ 875,000 -0-
25,000(3)(4) $ 3,125 23,750 46,250 $ 415,625 $ 809,375
Donald A. Lorenz(5).... 25,000(3)(4) $21,875 -0- 25,000 -0- $ 437,500
Robert E. Pester....... 25,000(3)(4) $ 3,125 -0- 25,000 -0- $ 437,500
James R. Moore......... 25,000(3)(4) $ 3,125 7,500 32,500 $ 131,250 $ 568,750

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

(1) For all unexercised in-the-money options, assumes a fair market value at
December 31, 1996 of $17.50 per share of Common Stock, which is the last
transaction in the Common Stock on the New York Stock Exchange as of that
date.

(2) Stock Options granted pursuant to the 1992 Directors' Stock Option Plan, as
amended.

(3) Stock Options granted pursuant to the Employee Stock Option Plan.

(4) See footnote 7 to the Summary Compensation Table on page 13.

(5) Mr. Lorenz resigned from his position with the Company as of March 31, 1997.

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EMPLOYMENT AGREEMENT WITH PETER B. BEDFORD

On February 16, 1993, the Company entered into an employment agreement with
Mr. Bedford, Chairman and Chief Executive Officer, and amended the agreement on
September 18, 1995. Pursuant to the amended employment agreement, Mr. Bedford
has agreed to serve as Chairman and Chief Executive Officer of the Company on a
substantially full-time basis until the agreement's expiration on September 18,
2000. After September 18, 2000, the agreement will be automatically renewed for
additional one-year terms unless either party gives the other notice of
non-renewal. Under the employment agreement, the Company agrees to pay Mr.
Bedford a salary of not less than $150,000 per annum, plus an automobile and
parking allowance. The amended employment agreement provides for a severance
payment to Mr. Bedford equal to one year's salary in the event that the Company
terminates his employment without cause or Mr. Bedford resigns under specified
circumstances, or due to a change in control of the Company.

BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Overview

During 1996 the members of the Compensation Committee were Messrs. Downs,
Eastman, Frank and Zankel. The Compensation Committee is responsible for the
general compensation policies of the Company, and in particular is responsible
for setting and administering the policies that govern executive compensation.
The Compensation Committee evaluates the performance of management and
determines the compensation levels for all executive officers.

The primary objectives of the Company's compensation policies and programs
are (i) to attract and retain key executives, (ii) to reward performance by
these executives which benefits the Stockholders, and (iii) to align the
financial interests of the Company's executive officers directly with those of
the Stockholders. The primary elements of executive officer compensation are
base salary, annual cash bonus, and stock option awards. The salary is based on
factors such as related experience, level of responsibility, and comparison to
similar positions in comparable companies. The annual cash bonuses are based on
the Company's performance measured against attainment of financial and other
objectives, and on individual performance. Stock option awards are intended to
align the executive officer's interest with those of the Stockholders, and are
determined based on the executive officer's level of responsibility, number of
options previously granted, and contributions toward achieving the goals and
objectives of the Company. Additional information on each of these compensation
elements follows.

Salaries

Base salaries for the executive officers are adjusted annually, following a
review by the Chairman and Chief Executive Officer (the "CEO") of the Company.
In completing the review, performance of the individual with respect to specific
objectives is evaluated, as are increases in responsibility and salaries for
similar positions. Comparisons are made to the total compensation packages of
other publicly traded real estate investment trusts of similar size, with a
comparable number of properties and employees. These comparisons are completed
through a review of various public filings as well as through a review of the
results of the REIT Executive Compensation Survey sponsored by the National
Association of Real Estate Investment Trusts (NAREIT). When all reviews are
completed, the CEO makes a recommendation to the Compensation Committee for its
review and final approval.

With respect to the CEO, the Compensation Committee considers a number of
factors in setting his compensation, the most important of which are the level
of compensation paid to chief executive officers of other real estate investment
trusts, the success of the Company's recent acquisitions of new properties, and
his importance to the Company's efforts to raise capital in the public markets.
The current base salary for Mr. Bedford, the Company's CEO, is less than the
average for chief executive officers of similar real estate investment trusts.
However, his total compensation is deemed appropriate in view of the stock
options he holds and his significant equity ownership.

In light of the relatively low salaries of the Company's executive
officers, the Compensation Committee has not developed a position regarding the
Internal Revenue Code provision limiting deductions for salaries to $1 million
per person.

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17

Annual Bonuses

Annual bonuses are awarded on a discretionary basis and reflect both
Company and individual performance. The Compensation Committee considers
numerous qualitative and quantitative factors in determining these bonus awards,
including the amount of equity capital raised, the success of the Company's
acquisition program and the growth in the Company's funds from operations, after
adjustment for lease commissions, tenant improvements and other capital
expenditures.

Stock Option Awards

Stock options are an integral part of each executive officer's compensation
and are utilized by the Company to provide an incentive to the officer, and to
align the interests of the executive with those of the Stockholders by providing
him with a financial interest in the Company. Options granted by the
Compensation Committee under the Company's Employee Stock Option Plan are made
at fair market value on the date of the grant, vest over various time periods of
up to five years and expire after ten years. In making grants, the Compensation
Committee takes into account the executive officer's contributions to the
Company, scope of responsibilities, salary and the number of options previously
granted. The executive officers were granted a significant number of options in
1996, as the Compensation Committee sought to implement its overall strategy of
aligning the financial interests of the executive officers with those of the
Stockholders.

COMPENSATION COMMITTEE

A. M. Downs (Chairman)

T. G. Eastman

A. M. Frank

M. I. Zankel

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and any person who owns more than ten percent
(10%) of a registered class of the Company's equity securities, to file reports
of ownership on Form 3 and changes in ownership on Form 4 or 5 with the
Securities and Exchange Commission (the "SEC"). Such officers, directors and ten
percent (10%) stockholders are also required by SEC rules to furnish the Company
with copies of all Section 16(a) forms that they file.

Based solely on its review of copies of such reports received or written
representations from certain reporting persons, the Company believes that all
Section 16(a) filing requirements applicable to its officers, directors and ten
percent (10%) stockholders during the fiscal year ended December 31, 1996 were
complied with.

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18

STOCK PRICE PERFORMANCE GRAPH

The following line graph illustrates a five-year comparison of the
cumulative total stockholder return on the Common Stock against the cumulative
total return of the Standard & Poor's 500 Composite Stock Index and the SNL
Securities Corporate Performance Index Value of all publicly-traded real estate
investment trusts ("REITs") holding greater than a 75% equity interest in their
REIT-qualifying assets. The graph assumes that $100 was invested on December 31,
1991 in the Common Stock and the indices, and that all dividends were reinvested
throughout the period.

FIVE YEAR CUMULATIVE TOTAL STOCKHOLDER RETURN

MEASUREMENT PERIOD
(FISCAL YEAR COVERED) BEDFORD PROPERTY S&P 500 EQUITY REITS

12/31/91 100.00 100.00 100.00
12/31/92 125.00 107.62 115.96
12/31/93 199.66 118.47 139.15
12/31/94 237.76 120.03 144.36
12/31/95 329.52 165.13 166.13
12/31/96 439.60 202.69 225.85

TOTAL STOCKHOLDER RETURN

YEAR ENDING BEDFORD PROPERTY INVESTORS S&P 500 EQUITY REITS
------------------------------- -------------------------- ------- ------------

12/31/91....................... $ 100.00 $100.00 $ 100.00
12/31/92....................... $ 125.00 107.62 115.96
12/31/93....................... $ 199.66 118.47 139.15
12/31/94....................... $ 237.76 120.03 144.36
12/31/95....................... $ 329.52 165.13 166.13
12/31/96....................... $ 439.60 202.69 225.85

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as of March 15, 1997, with
respect to directors, certain employees of the Company and each person who is
known by the Company to own beneficially more than 5% of the shares of its
Preferred Stock or its Common Stock, and with respect to shares of Common Stock
owned beneficially by all directors and officers of the Company as a group.

TITLE OF NUMBER OF SHARES PERCENT OF
CLASS NAME AND ADDRESS BENEFICIALLY OWNED CLASS
- ------------ -------------------------- ------------------ ----------

Preferred Bed Preferred No. 1 8,333,334 100%
Stock
Limited Partnership
225 Franklin Street
Boston, MA 02110-2803
Common Stock Peter B. Bedford 1,019,663(1) 9.0%
Common Stock Anthony M. Downs 50,500(2) (7)
Common Stock Anthony M. Frank 50,500(3) (7)
Common Stock Claude M. Ballard 50,000(4) (7)
Common Stock Martin I. Zankel 68,991(5) (7)
Common Stock Thomas G. Eastman 50,000(6) (7)
Common Stock Thomas H. Nolan, Jr. 50,000(8) (7)
Common Stock Robert E. Pester 71,250(9) (7)
Common Stock Donald A. Lorenz(10) 57,100(11) (7)
Common Stock James R. Moore 32,005(12) (7)
Common Stock Hanh Kihara 13,750(13) (7)
Common Stock All directors and officers 1,513,759(14) 13.0%
as a group (12 persons)

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

(1) Includes 140,000 shares owned by Mr. Bedford's children (as to which Mr.
Bedford has sole voting power and may be deemed to be the beneficial
owner), 7,500 shares owned by Mr. Bedford's wife (as to which Mr. Bedford
has shared voting power and may be deemed to be beneficial owner), 50,000
shares owned by the Grindstone Trust (Mr. Bedford disclaims beneficial
ownership to these shares), and 81,250 shares of Common Stock subject to
options which are currently exercisable or will become exercisable within
60 days of March 31, 1997.

(2) Includes 25,000 shares subject to options which are currently exercisable
or will become exercisable within 60 days of March 31, 1997

(3) Includes 50,000 shares subject to options which are currently exercisable
or will become exercisable within 60 days of March 31, 1997.

(4) Includes 50,000 shares subject to options which are currently exercisable
or will become exercisable within 60 days of March 31, 1997.

(5) Includes 8,991 partnership units convertible into 8,991 shares of Common
Stock and 50,000 shares subject to options which are currently exercisable
or will become exercisable within 60 days of March 31, 1997. See "Certain
Relationships and Related Transactions."

(6) Includes 50,000 shares subject to options which are currently exercisable
or will become exercisable within 60 days of March 31, 1997.

(7) Less than 1%.

(8) Includes 50,000 shares subject to options which are currently exercisable
or will become exercisable within 60 days of March 31, 1997.

(9) Includes 13,750 shares subject to options which are currently exercisable
or will become exercisable within 60 days of March 31, 1997.

(10) Mr. Lorenz resigned from his position with the Company as of March 31,
1997.

(11) Includes 6,250 shares subject to options which are currently exercisable or
will become exercisable within 60 days of March 31, 1997.

(12) Includes 6,250 shares subject to options which are currently exercisable or
will become exercisable within 60 days of March 31, 1997.

(13) Includes 12,750 shares subject to options which are currently exercisable
or will become exercisable within 60 days of March 31, 1997.

(14) Includes 8,991 partnership units convertible into 8,991 shares of Common
Stock and options to purchase 395,250 shares which are currently
exercisable or become exercisable within 60 days of March 31, 1997.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

FUNDING OF ACQUISITION AND FINANCING COSTS

Due to the Company's limited financial resources, its activities relating
to the acquisition of new properties and debt and equity financings are
currently performed by Bedford Acquisitions, Inc., ("Bedford Acquisitions"), a
corporation wholly owned by Peter B. Bedford, the Company's Chairman and Chief
Executive Officer, pursuant to a written contract dated January 1, 1995. The
contract provides that Bedford Acquisitions is obligated to provide services to
the Company with respect to the Company's acquisition and financing activities,
and that Bedford Acquisitions is responsible for the payment of its expenses
incurred in connection therewith. Such expenses include certain costs incurred
by the Company on behalf of Bedford Acquisitions, including the cost of officers
and directors insurance coverage under the Company's insurance policy. Bedford
Acquisitions also paid one-half of Mr. Bedford's bonus ($50,000) and all of Mr.
Pester's compensation in 1996. Bedford Acquisitions must submit to the Company a
direct cost estimate for the Company's approval relating to each acquisition or
financing, setting forth the estimated timing and amount of all projected
Bedford Acquisitions costs relating to the acquisition or financing. Pursuant to
the contract, Mr. Bedford is obligated to make the payments of Bedford
Acquisitions' expenses described above if Bedford Acquisitions fails to make any
such payments in a timely fashion, provided that Mr. Bedford is not obligated to
pay any such amounts exceeding $1 million or following a termination of Bedford
Acquisitions' obligations based on the expiration or termination of the term of
the contract. The contract provides that Bedford Acquisitions is to be paid a
fee in an amount equal to the lesser of (i) 1 1/2% of the gross amount raised in
financings or the aggregate purchase price of property acquisitions, or (ii) an
amount equal to (a) the aggregate amount of approved expenses funded by Bedford
Acquisitions through the time of such acquisition or financing minus (b) the
aggregate amount of fees previously paid to Bedford Acquisitions pursuant to
such arrangement. In no event will the aggregate amount of fees paid to Bedford
Acquisitions exceed the aggregate amount of costs funded by Bedford
Acquisitions. The agreement with Bedford Acquisitions will expire on January 1,
1998.

From February 1993 through December 1994, the Company's activities relating
to debt and equity financings and the acquisition of new properties were handled
under arrangements similar to the current arrangement with Bedford Acquisitions
through BPI Acquisitions, a separate division within the Company. This division
operated under an arrangement with Mr. Bedford whereby he provided acquisitions
and financing personnel, allocable overhead costs and the costs of all due
diligence conducted prior to an acquisition. Upon the completion of a financing
or the acquisition of a property, Mr. Bedford was paid a fee by the Company
substantially identical to that described above. In no event could the aggregate
amount of fees paid to Mr. Bedford exceed the aggregate amount of costs funded
by Mr. Bedford.

As of December 31, 1996, the Company had paid Mr. Bedford and Bedford
Acquisitions an aggregate of approximately $4,853,000 for acquisition and
financing activities performed since February 1993 pursuant to the foregoing
arrangements which was approximately $250,000 less than 1.5% of the gross amount
raised in completed financings and the aggregate purchase price of acquired
properties. Of this amount, approximately $1,808,000 was paid during 1996. The
Company believes that since the fees charged under the foregoing arrangements
(i) have been and continue to be comparable to those charged by other sponsors
of real estate investment entities or other third-party service providers and
(ii) have been and continue to be charged only for services on acquired
properties or completed financings, such fees were and continue to be properly
includable in direct acquisition costs and capitalized as part of the asset or
financing activities. If the Company were to discontinue this arrangement, its
acquisition and financing activities would have to be paid by the Company, as
incurred, out of cash from operations or borrowings and certain of such costs
would be reflected as operating expenses in its statement of operations rather
than being capitalized. For example, without the above-described arrangements
with Mr. Bedford and Bedford Acquisitions, the Company may have incurred
substantial operating expenses relating to acquisition and financing activities;
if the Company had employed the same personnel and incurred the same expenses as
Bedford Acquisitions, net income and funds from operations for the year ended
December 31, 1996 each would have been reduced by approximately $863,000 (or
$.09 per common share assuming full dilution) compared to the corresponding
amounts actually reported

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21

for that period. The Company intends to discontinue this fee arrangement if and
when its operating results permit it to sustain acquisition and financing
activities internally. However, the termination of this arrangement prior to
that time would likely require the Company to decrease its acquisition and
financing efforts, which could have a material adverse effect on the Company's
ability to grow.

ACQUISITIONS INVOLVING AFFILIATES

OTHER TRANSACTIONS

On June 8, 1994, Kingswood Realty Advisors, Inc. ("Kingswood") filed a
petition in the United States Bankruptcy Court for the Northern District of
California for protection from its creditors under Chapter 11 of the United
States Bankruptcy Code (the "Bankruptcy Code"). On September 8, 1994, Kingswood
converted its case to an action under Chapter 7 of the Bankruptcy Code.
Kingswood's case was closed and a final decree entered by the Court on February
21, 1996. Mr. Bedford was president, director and sole shareholder of Kingswood.

Martin I. Zankel, a member of the Board of Directors of the Company, and
his associates provide legal services to the Company for which his firm was
paid, in the aggregate, $213,000 in 1996.

INDEBTEDNESS OF MANAGEMENT

In September 1995, the Company established a Management Stock Acquisition
program. Under the program, options exercised by key members of management
within thirty days of the grant date may be exercised and paid for either in
cash or with a note payable to the Company. Such note bears interest at 7.5% or
the Applicable Federal Rate as defined by the Internal Revenue Service,
whichever is higher. Each note is due five years after the date of its issuance
or within ninety days from termination of employment, with interest payable
quarterly. During 1996, Mr. Bedford, Mr. Lorenz, Mr. Moore and Mr. Pester, all
of whom are executive officers of the Company, each exercised options for 25,000
shares of Common Stock in exchange for notes payable to the Company. The notes,
of $325,000 each, bear interest at 7.5% per annum. In 1995, Mr. Lorenz and Mr.
Pester also borrowed $287,500 pursuant to this program. As of February 28, 1997,
$282,434, $520,423, $306,071 and $405,164 in principal amount were outstanding
under the notes owed by Mr. Bedford, Mr. Lorenz, Mr. Moore and Mr. Pester,
respectively.

OTHER INFORMATION

A copy of the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, may be obtained, without charge, by writing to Jennifer
I. Mori, Secretary, Bedford Property Investors, Inc., 270 Lafayette Circle,
Lafayette, CA 94549.

18
22

OTHER MATTERS

The Board of Directors knows of no matter to be presented at the Annual
Meeting other than those set forth in the Notice of Meeting and described in
this Proxy Statement. If, however, any other business should properly come
before the meeting, it is the intention of the persons named in the accompanying
proxy to vote in accordance with their discretion on such matters.

STOCKHOLDER PROPOSALS

Proposals of Stockholders intended to be presented at the annual meeting of
Stockholders to be held in 1998 must be received by the Company at its principal
executive offices no later than March 17, 1998 for inclusion in the Company's
Proxy Statement and form of proxy relating to that meeting. Such proposals must
meet the requirements of the rules of the Securities and Exchange Commission
relating to stockholder proposals.

By Order of the Board of Directors,

/s/ Jennifer I. Mori

April 14, 1997 Jennifer I. Mori
Secretary

19
23

EXHIBIT A

ARTICLES OF AMENDMENT OF
CHARTER
OF
BEDFORD PROPERTY INVESTORS, INC.

THIS IS TO CERTIFY THAT:

FIRST: The charter of Bedford Property Investors, Inc., a Maryland
corporation (the "Corporation"), is hereby amended by deleting existing Section
1 of Article V and adding a new Section 1 as follows:

Section 1. Authorized Shares. The total number of shares of stock
which the Corporation has authority to issue is 70,000,000 shares, of which
50,000,000 shares are shares of Common Stock, $0.02 par value share
("Common Stock"), 10,000,000 shares are shares of Preferred Stock, $0.01
par value per share ("Preferred Stock"), and 10,000,000 shares are shares
of Series A Convertible Preferred Stock, $.01 par value per share ("Series
A Preferred"). The aggregate par value of all authorized shares of stock
having a par value is $1,200,000.

SECOND: The total number of shares of stock which the Corporation had
authority to issue immediately prior to this amendment was 15,000,000 shares of
Common Stock, $0.02 par value per share, 10,000,000 shares of Preferred Stock,
$0.01 par value per share, and 10,000,000 shares of Series A Convertible
Preferred Stock, $0.01 par value per share, having an aggregate par value of
$500,000.

THIRD: The total number of shares of stock which the Corporation has
authority to issue, pursuant to the charter of the Corporation as hereby
amended, is 50,000,000 shares of Common Stock, $0.02 par value per share,
10,000,000 shares of Preferred Stock, $0.01 par value per share, and 10,000,000
shares of Series A Convertible Preferred Stock, $0.01 par value per share,
having an aggregate par value of $1,200,000.

FOURTH: The amendment to the charter of the Corporation as set forth above
has been duly advised by the board of directors and approved by the Stockholders
of the Corporation as required by law.

FIFTH: The undersigned President acknowledges these Articles of Amendment
to be the corporate act of the Corporation and as to all matters or facts
required to be verified under oath, the undersigned President acknowledges that
to the best of his knowledge, information and belief, these matters and facts
are true in all material respects and that this statement is made under the
penalties for perjury.

IN WITNESS WHEREOF, the Corporation has caused these Articles to be signed
in its name and on its behalf by its President and attested to by its Secretary
on this day of , 1997.

ATTEST: BEDFORD PROPERTY INVESTORS, INC.

By:

--------------------------------------
Its President (seal)

By:

--------------------------------------
Its Secretary (seal)

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24
(THIS PROXY IS TO BE USED BY COMMON STOCKHOLDERS ONLY)

BEDFORD PROPERTY INVESTORS, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS

THIS PROXY IS SOLICITED BY MANAGEMENT

The undersigned stockholder of Bedford Property Investors, Inc., a
Maryland corporation (the "Company"), hereby appoints Jennifer I. Mori and
Hahn Kihara, and each of them, as proxies for the undersigned, with full
power of substitution in each of them, to attend the Annual Meeting of
Stockholders of the Company to be held on Friday, May 16, 1997 at 1:00 p.m. at
the Lafayette Park Hotel, 3287 Mount Diablo Boulevard, Lafayette, California,
and at any adjournment(s) or postponement(s) thereof, to cast on behalf of the
undersigned all votes that the undersigned is entitled to cast at such meeting
and otherwise to represent the undersigned at the meeting, with the same effect
as if the undersigned were present. The undersigned hereby acknowledges receipt
of the Notice of Annual Meeting of Stockholders and the accompanying Proxy
Statement and revokes any proxy previously given with respect to such shares.

(Continued and to be signed on reverse side.)

FOLD AND DETACH HERE

1. Election of Common Stock Directors
Nominees: Clauda M. Ballard; Peter B. Bedford;
Anthony M. Downs; Anthony M. Frank; Martin I. Zankel.

[ ] FOR ALL NOMINEES [ ] WITHHOLD AS TO ALL NOMINEES

[ ] FOR ALL NOMINEES(S) (Except as written below.)

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

2. Approval of the amendment to the Company's Charter to increase the
number of authorized shares of the Company's Common Stock, par value
$.02 per share, from 15,000,000 to 50,000,000.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. Ratification of appointment by the Company's Board of Directors of KPMG
Peat Marwick LLP to serve as Company's independent accountants for
fiscal year ending December 31, 1997.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

and in the discretion of the proxies on any other matters coming before
the meeting or any adjournment(s) or postponement(s) thereof.

[ ] MARK HERE IF YOU PLAN TO ATTEND THE MEETING

THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST IN ACCORDANCE WITH
THE SPECIFICATIONS MADE. IF THIS PROXY IS EXECUTED BUT NO SPECIFICATION IS MADE,
THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST FOR THE FOREGOING
PROPOSALS AND OTHERWISE IN THE DISCRETION OF THE PROXIES AT THE MEETING OR ANY
ADJOURNMENT(S) OR POSTPONEMENT(S) THEREOF.

Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope.

Signature(s) Dated ,1997
---------------------------------------------- ----------

Please sign exactly as name appears hereon and date. If the shares are held
jointly, each holder should sign. When signing as an attorney, executor,
administrator, trustee, guardian or as an officer signing for a corporation or
other entity, please give full title under signature.

FOLD AND DETACH HERE

25
(THIS PROXY IS TO BE USED BY PREFERRED STOCKHOLDERS ONLY)

BEDFORD PROPERTY INVESTORS, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS

THIS PROXY IS SOLICITED BY MANAGEMENT

The undersigned stockholder of Bedford Property Investors, Inc., a
Maryland corporation (the "Company"), hereby appoints Jennifer I. Mori and
Hahn Kihara, and each of them, as proxies for the undersigned, with full
power of substitution in each of them, to attend the Annual Meeting of
Stockholders of the Company to be held on Friday, May 16, 1997 at 1:00 p.m. at
the Lafayette Park Hotel, 3287 Mount Diablo Boulevard, Lafayette, California,
and at any adjournment(s) or postponement(s) thereof, to cast on behalf of the
undersigned all votes that the undersigned is entitled to cast at such meeting
and otherwise to represent the undersigned at the meeting, with the same effect
as if the undersigned were present. The undersigned acknowledges receipt
of the Notice of Annual Meeting of Stockholders and the accompanying Proxy
Statement and revokes any proxy previously given with respect to such shares.

(Continued and to be signed on the reverse side.)

FOLD AND DETACH HERE

1. Election of Preferred Stock Directors
Nominees: Thomas G. Eastman; Thomas H. Nolan, Jr.

[ ] FOR ALL NOMINEES [ ] WITHHOLD AS TO ALL NOMINEES

[ ] For both Nominees (Except as written below)

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

[ ] MARK HERE IF YOU PLAN TO ATTEND THE MEETING

Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope.

Signature(s) Dated ,1997
------------------------------------------------- -------

FOLD AND DETACH HERE