8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 14, 2010

MISSION WEST PROPERTIES, INC.

(Exact name of registrant as specified in its charter)

Maryland	1-8383	95-2635431
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

10050 Bandley Drive, Cupertino, CA 95014

(Address of principal executive offices, zip code)

 Registrant’s telephone number, including area code: (408) 725-0700

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

      o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

      o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

      o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

      o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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ITEM 2.02.    RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

(a)   The following information is being furnished by the Company as required for Item 2.02(a) of this report and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934:

On July 14, 2010, the Company issued a press release announcing its earnings results for the second quarter ended June 30, 2010. The press release is attached to this Current Report as Exhibit 99.1 and is incorporated by reference in response to Item 2.02(a) of this report.

ITEM 9.01.    FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits.

Exhibit No.                      Description                                                                                     

99.1                                  Mission West Properties, Inc. Press Release dated July 14, 2010.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

       MISSION WEST PROPERTIES, INC.

Date: July 15, 2010                                                                                      By: /s/ Wayne N. Pham                                           

                                                                      Wayne N. Pham

                                                                                                      Vice President of Finance

EX-99.1 CHARTER

Exhibit 99.1

[Missing Graphic Reference]   Press Release

For Immediate News Release

July 14, 2010

Mission West Properties Announces Second Quarter 2010 Operating Results

Cupertino, CA – Mission West Properties, Inc. (NASDAQ: MSW) reported today that Funds From Operations (“FFO”) for the quarter ended June 30, 2010 was approximately $16,559,000, or $0.16 per diluted common share, (considering the potential effect of all O.P. units being exchanged for shares of the Company’s common stock) as compared to approximately $14,189,000, or $0.13 per diluted common share, for the same period in 2009. Realized gain from investment in marketable securities accounted for approximately $2,215,000, or $0.02 per diluted common share, and litigation proceeds accounted for approximately $903,000, or $0.01 per diluted common share, for the quarter ended June 30, 2010. Unrealized gain from investment in marketable securities accounted for appr oximately $2,433,000, or $0.02 per diluted common share, for the quarter ended June 30, 2009. A net increase in the provision related to the Hellyer Avenue Limited Partnership litigation accounted for approximately $1,300,000 in interest expense, or ($0.01) per diluted common share, for the quarter ended June 30, 2009. On a sequential quarter basis, FFO for the quarter ended March 31, 2010 was approximately $0.16 per diluted common share. For the six months ended June 30, 2010, FFO increased to $33,066,000, or $0.31 per diluted common share, from FFO of $26,259,000, or $0.25 per diluted common share, for the six months ended June 30, 2009. Realized gain from investment in marketable securities and litigation proceeds accounted for approximately $0.05 per diluted common share for the six months ended June 30, 2010.

Net income for the quarter ended June 30, 2010 was approximately $10,041,000 as compared to approximately $7,189,000 for the quarter ended June 30, 2009. Net income per diluted share available to common stockholders was approximately $0.11 for the quarter ended June 30, 2010 compared to $0.08 for the quarter ended June 30, 2009, a per share increase of approximately 38%. Net income for the six months ended June 30, 2010 was approximately $20,185,000 as compared to approximately $12,823,000 for the six months ended June 30, 2009. For the six months ended June 30, 2010, net income per diluted share available to common stockholders was $0.22, up from $0.15 a year ago, a per share increase of approximately 47%. Realized gain from investment in marketable securities and litigation proceeds accounted for approximately $0.05 per diluted commo n share for the six months ended June 30, 2010.

The Company’s cost of marketable securities was approximately $6,610,000. During the holding period, the Company received approximately $298,000 in cash dividends. In the second quarter of 2010, the Company sold all of its marketable securities realizing a net cash gain of approximately $9,601,000.

Company Profile

Mission West Properties, Inc. operates as a self-managed, self-administered and fully integrated REIT engaged in the management, leasing, marketing, development and acquisition of commercial R&D properties, primarily located in the Silicon Valley portion of the San Francisco Bay Area. Currently, the Company manages 112 properties totaling approximately 8.1 million rentable square feet. For additional information, please contact Investor Relations at 408-725-0700.

The matters described herein contain forward-looking statements.  Such statements can be identified by the use of forward-looking terminology such as “will,” “anticipate,” “estimate,” “expect,” “intends,” or similar words.  Forward-looking statements involve a number of risks, uncertainties or other factors beyond the Company’s control, which may cause material differences in actual results, performance or other expectations.  These factors include, but are not limited to, the ability to complete acquisitions under the Berg Land Holdings Option Agreement with the Berg Group and other factors detailed in the Company’s registration statements, and periodic filings with the Securities & Exchange Commission.< /div>

MISSION WEST PROPERTIES, INC.

SELECTED FINANCIAL DATA

(In thousands, except share, per share and property data amounts)

	Three Months Ended Jun 30, 2010			Three Months Ended Jun 30, 2009			Six Months Ended Jun 30, 2010			Six Months Ended Jun 30, 2009
OPERATING REVENUES:
Rental income	$	20,670		$	20,424		$	41,484		$	41,080
Tenant reimbursements		4,042			4,315			8,483			9,115
Other income		1,204			302			1,862			622
Total operating revenues		25,916			25,041			51,829			50,817
OPERATING EXPENSES:
Operating and maintenance		3,088			3,921			6,032			6,475
Real estate taxes		3,424			3,351			6,643			6,748
General and administrative		563			623			1,081			1,154
Depreciation and amortization		6,057	(1)		6,334	(1)		11,978			12,279
Total operating expenses		13,132			14,229			25,734			26,656
Operating income		12,784			10,812			26,095			24,161
OTHER INCOME (EXPENSES):
Equity in earnings of unconsolidated joint venture		147			75			224			164
Interest and dividend income		-			1,125			50			1,065
Realized gain from investment		2,215			-			2,215			-
Unrealized gain (loss) from investment		-			2,433			1,852			(324	)
Interest expense		(4,778	)		(7,085	)		(9,627	)		(11,891	)
Interest expense – related parties		(327	)		(171	)		(624	)		(352	)
Net income		10,041			7,189			20,185			12,823
Net income attributable to noncontrolling interests		(7,581	)		(5,404	)		(15,267	)		(9,607	)
Net income available to common stockholders	$	2,460		$	1,785		$	4,918		$	3,216
Net income per share to common stockholders:
Basic	$	0.11		$	0.08		$	0.22		$	0.15
Diluted	$	0.11		$	0.08		$	0.22		$	0.15
Weighted average shares of common stock (basic)		21,957,654			21,766,343			21,919,632			21,691,029
Weighted average shares of common stock (diluted)		22,123,527			21,899,906			22,090,313			21,835,545
Weighted average O.P. units outstanding		83,326,965			83,508,833			83,362,225			83,584,147

FUNDS FROM OPERATIONS
Funds from operations	$	16,559	$	14,189	$	33,066	$	26,259
Funds from operations per share (2)	$	0.16	$	0.13	$	0.31	$	0.25
Outstanding common stock		21,959,070		21,770,211		21,959,070		21,770,211
Outstanding O.P. units		83,326,965		83,504,965		83,326,965		83,504,965
Weighted average O.P. units and common stock    outstanding (diluted)		105,450,492		105,408,739		105,452,538		105,419,692

FUNDS FROM OPERATIONS CALCULATION	Three Months Ended Jun 30, 2010			Three Months Ended Jun 30, 2009			Six Months Ended Jun 30, 2010			Six Months Ended Jun 30, 2009
Net income	$	10,041		$	7,189		$	20,185		$	12,823
Add:
Depreciation and amortization		6,556			6,994			12,963			13,411
Depreciation and amortization in      unconsolidated joint venture		60			60			119			119
Less:
Noncontrolling interests in joint ventures		(98	)		(54	)		(201	)		(94	)
Funds from operations	$	16,559		$	14,189		$	33,066		$	26,259
Funds From Operations (“FFO”) is a non-GAAP financial measurement used by real estate investment trusts (“REITs”) to measure and compare operating performance. As defined by NAREIT, FFO represents net income (loss) (computed in accordance with GAAP, accounting principles generally accepted in the United States of America), excluding gains (or losses) from debt restructuring and sales of property, plus real estate related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets) and after adjustments for unconsolidated partnerships and joint ventures. Management considers FFO to be an appropriate supplemental measure of the Company’s operating and financial performance because when compared year over year, it reflects the impact to operatio ns from trends in occupancy rates, rental rates, operating costs, general and administrative expenses and interest costs, providing a perspective not immediately apparent from net income. In addition, management believes that FFO provides useful information about the Company’s financial performance when compared to other REITs since FFO is generally recognized as the industry standard for reporting the operations of REITs. FFO should neither be considered as an alternative for net income as a measure of profitability nor is it comparable to cash flows provided by operating activities determined in accordance with GAAP. FFO is not comparable to similarly entitled items reported by other REITs that do not define them exactly as we define FFO.
PROPERTY AND OTHER DATA:	Three Months Ended Jun 30, 2010			Three Months Ended Jun 30, 2009			Six Months Ended Jun 30, 2010			Six Months Ended Jun 30, 2009
Total properties, end of period		112			111			112			111
Total square feet, end of period		8,088,923			8,047,569			8,088,923			8,047,569
Average monthly rental revenue per square foot (3)	$	1.31		$	1.29		$	1.32		$	1.29
Occupancy for leased properties		64.1	%		66.1	%		64.1	%		66.1	%
Straight-line rent	$	9		$	238		$	(228	)	$	560
Leasing commissions	$	445		$	204		$	445		$	320
Capital expenditures	$	-		$	-		$	-		$	-

LEASE ROLLOVER SCHEDULE:

Year	# of Leases		Rentable Square Feet			2010 Base Rent (5)
2010		9		197,285	(4)	$	2,832,921
2011		15		739,221			11,312,732
2012		15		1,015,838			15,383,370
2013		7		460,320			6,150,363
2014		15		1,301,930			22,685,061
2015		8		620,801			9,873,161
2016		3		160,600			3,421,708
2017		5		349,949			4,955,733
Thereafter		3		284,756			5,869,497
Total		80		5,130,700		$	82,484,546

BALANCE SHEETS
	June 30, 2010			December 31, 2009
Assets
Investments in real estate:
Land	$	324,563		$	320,911
Buildings and improvements		799,849			799,649
Real estate related intangible assets		3,240			3,240
Total investments in properties		1,127,652			1,123,800
Accumulated depreciation and amortization		(216,131	)		(204,153	)
Net investments in properties		911,521			919,647
Investment in unconsolidated joint venture		3,901			3,828
Net investments in real estate		915,422			923,475
Cash and cash equivalents		5,465			986
Restricted cash		89			197
Restricted investment in marketable securities		-			12,069
Deferred rent receivables		18,483			18,711
Other assets, net		32,944			30,951
Total assets	$	972,403		$	986,389
Liabilities and Equity
Liabilities:
Mortgage notes payable	$	312,508		$	318,818
Mortgage note payable – related parties		7,996			8,261
Note payable – related parties		27,771			9,325
Revolving line of credit		-			14,466
Interest payable		1,478			1,573
Security deposits		4,871			4,849
Deferred rental income		5,860			6,539
Dividends and distributions payable		15,793			15,791
Accounts payable and accrued expenses		10,455			9,638
Total liabilities		386,732			389,260
Commitments and contingencies.
Equity: (6)
Stockholders’ equity:
Common stock, $.001 par value		22			22
Additional paid-in capital		171,275			170,606
Distributions in excess of accumulated earnings		(27,452	)		(25,784	)
Total stockholders’ equity		143,845			144,844
Noncontrolling interests in operating partnerships		441,826			452,285
Total equity		585,671			597,129
Total liabilities and equity	$	972,403		$	986,389

(1)   Includes approximately $301 and $159 in amortization expense for the three months ended June 30, 2010 and 2009, respectively, and $461 and $319 in amortization expense for the six months ended June 30, 2010 and 2009, respectively, for the amortization of in-place lease value intangible asset pursuant to the Business Combinations Topic of the Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”).

(2)   Calculated on a fully diluted basis. Assumes conversion of O.P. units outstanding into the Company’s common stock.

(3)   Average monthly rental revenue per square foot has been determined by taking the cash base rent for the period divided by the number of months in the period, and then divided by the average occupied square feet in the period.

(4)   Excludes five month-to-month leases for approximately 53,000 rentable square feet.

(5)   Base rent reflects cash rent.

(6)   Reflects adoption of the Consolidation Topic of the FASB ASC.

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