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): February 1, 2012

MISSION WEST PROPERTIES, INC.

(Exact name of registrant as specified in its charter)

Maryland	001-34000	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))

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 February 1, 2012, the Company issued a press release announcing its earnings results for the fourth quarter and full year ended December 31, 2011. 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 February 1, 2012

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: February 2, 2012	By:	/s/ Wayne N. Pham
		Wayne N. Pham
		Vice President of Finance

Exhibit 99.1

    Press Release

For Immediate News Release

February 1, 2012

Mission West Properties Announces Fourth Quarter and Full Year 2011 Operating Results

Cupertino, CA – Mission West Properties, Inc. (NASDAQ: MSW) reported today that Funds From Operations (“FFO”) for the quarter ended December 31, 2011, was approximately $16,624,000, 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 $11,182,000, or $0.11 per diluted common share, for the same period in 2010. The increase was primarily due to higher operating revenues from new leases and lower operating expenses. On a sequential quarter basis, FFO for the quarter ended September 30, 2011, was approximately $0.13 per diluted common share. For the year ended December 31, 2011, FFO increased to $60,693,000, or $0.57 per diluted common share, from FFO of $56,018,000, or $0.53 per diluted common share, for the year ended December 31, 2010. Realized and unrealized gain from investment in marketable securities and litigation proceeds accounted for approximately $0.05 per diluted common share for the year ended December 31, 2010.

Net income for the quarter ended December 31, 2011, was approximately $14,159,000 as compared to approximately $10,839,000 for the quarter ended December 31, 2010. Net income per diluted share available to common stockholders was approximately $0.14 for the quarter ended December 31, 2011, compared to $0.10 for the quarter ended December 31, 2010, a per share increase of approximately 40%. The increase was primarily due to higher operating revenues from new leases and lower operating expenses. For the quarters ended December 31, 2011 and 2010, gain from the sale of real estate accounted for approximately $0.03 and $0.05 per diluted common share, respectively. Net income for the year ended December 31, 2011, was approximately $38,901,000 as compared to approximately $36,495,000 for the year ended December 31, 2010. For the year ended December 31, 2011, net income per diluted share available to common stockholders was $0.40, up from $0.38 a year ago, a per share increase of approximately 5%. Realized and unrealized gain from investment in marketable securities and litigation proceeds accounted for approximately $0.05 per diluted common share for the year ended December 31, 2010.

Disposition Activity

On October 28, 2011, the Company disposed of one R&D property located at 1425-1455 McCandless Drive in Milpitas, California consisting of approximately 39,000 rentable square feet. A total net gain of approximately $3,891,000 was recognized and classified as discontinued operations on the total sales price of $7,320,000. The buyer issued a promissory note secured by a deed of trust on the property sold to the Company in the amount of $3,660,000 with an interest rate of 6.00% per annum. The principal amount of the note, together with accrued interest, will be due and payable on October 30, 2012.

On January 9, 2012, the Company disposed of three R&D properties located at 1680-1690 McCandless Drive, 1740-1768 McCandless Drive and 1810-1830 McCandless Drive in Milpitas, California consisting of approximately 165,000 rentable square feet. A total net gain of approximately $8,350,000 will be recognized and classified as discontinued operations on the total sales price of $21,780,000. The buyer issued an unsecured promissory note to the Company in the amount of $18,780,000 with an interest rate of 0% per annum. The total sales price encompasses the sum of the following amounts: a) The down payment price of $3,000,000; b) Yearly payments of $3,000,000 on the anniversary of the effective date for four years; and c) On the fifth year anniversary of the effective date, the buyer will pay the amount remaining of the unpaid portion of the total sales price.

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 108 properties totaling approximately 7.9 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,” “intend,” 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 from the Berg Group and other factors detailed in the Company’s registration statements, and periodic filings with the Securities & Exchange Commission.

MISSION WEST PROPERTIES, INC.

SELECTED FINANCIAL DATA

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

STATEMENTS OF OPERATIONS
	Three Months Ended Dec 31, 2011			Three Months Ended Dec 31, 2010			Twelve Months Ended Dec 31, 2011			Twelve Months Ended Dec 31, 2010
OPERATING REVENUES:
Rental income	$	20,608		$	19,487		$	83,574	(6)	$	81,037
Tenant reimbursements		4,704			3,467			17,701			14,868
Other income		1,666			472			3,581			2,590
Total operating revenues		26,978			23,426			104,856			98,495
OPERATING EXPENSES:
Operating and maintenance		3,079			3,910			11,174			13,020
Real estate taxes		2,195			2,903			10,980			12,084
General and administrative		831			558			2,378			2,219
Depreciation and amortization		5,923	(1)		5,533	(1)		22,839	(1)		22,122	(1)
Total operating expenses		12,028			12,904			47,371			49,445
Operating income		14,950			10,522			57,485			49,050
OTHER INCOME (EXPENSES):
Equity in (loss) earnings of unconsolidated joint venture		(4	)		33			27			303
Interest income		334			51			515			102
Realized gain and unrealized loss from investment, net		-			-			-			4,067
Interest expense		(4,725	)		(5,304	)		(20,505	)		(20,068	)
Interest expense – related parties		(152	)		(149	)		(631	)		(988	)
Income from continuing operations		10,403			5,153			36,891			32,466
Discontinued operations:
Gain from disposal of discontinued operations		3,891			6,199			3,891			6,199
Loss from discontinued operations		(135	)		(513	)		(1,881	)		(2,170	)
Income from discontinued operations		3,756			5,686			2,010			4,029
Net income		14,159			10,839			38,901			36,495
Net income attributable to noncontrolling interests		(11,038	)		(8,654	)		(29,626	)		(28,022	)
Net income available to common stockholders	$	3,121		$	2,185		$	9,275		$	8,473
Income per share from continuing operations:
Basic	$	0.11		$	0.06		$	0.40		$	0.36
Diluted	$	0.11		$	0.06		$	0.39		$	0.35
Income per share from discontinued operations:
Basic	$	0.03		$	0.04		$	0.01		$	0.03
Diluted	$	0.03		$	0.04		$	0.01		$	0.03
Net income per share to common stockholders:
Basic	$	0.14		$	0.10		$	0.41		$	0.39
Diluted	$	0.14		$	0.10		$	0.40		$	0.38
Weighted average shares of common stock (basic)		22,585,110			22,076,694			22,489,475			21,973,599
Weighted average shares of common stock (diluted)		23,013,187			22,198,946			22,917,552			22,121,724
Weighted average O.P. units outstanding		82,700,925			83,209,341			82,796,560			83,310,364

FUNDS FROM OPERATIONS	Three Months Ended Dec 31, 2011			Three Months Ended Dec 31, 2010			Twelve Months Ended Dec 31, 2011			Twelve Months Ended Dec 31, 2010
Funds from operations	$	16,624		$	11,182		$	60,693		$	56,018
Funds from operations per share (2)	$	0.16		$	0.11		$	0.57		$	0.53
Outstanding common stock		22,586,020			22,135,770			22,586,020			22,135,770
Outstanding O.P. units		82,700,015			83,150,265			82,700,015			83,150,265
Weighted average O.P. units and common stock    outstanding (diluted)		105,714,112			105,408,287			105,714,112			105,432,088
FUNDS FROM OPERATIONS CALCULATION	Three Months Ended Dec 31, 2011			Three Months Ended Dec 31, 2010			Twelve Months Ended Dec 31, 2011			Twelve Months Ended Dec 31, 2010
Net income	$	14,159		$	10,839		$	38,901		$	36,495
Add:
Depreciation and amortization		6,399			6,526			25,859			25,840
Depreciation and amortization in      unconsolidated joint venture		60			60			238			238
Less:
Noncontrolling interests in joint ventures		(103	)		(44	)		(414	)		(356	)
Gain on sale of real estate		(3,891	)		(6,199	)		(3,891	)		(6,199	)
Funds from operations	$	16,624		$	11,182		$	60,693		$	56,018
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 operations 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 Dec 31, 2011			Three Months Ended Dec 31, 2010			Twelve Months Ended Dec 31, 2011			Twelve Months Ended Dec 31, 2010
Total properties, end of period		111			111			111			111
Total square feet, end of period		8,039,947			8,011,026			8,039,947			8,011,026
Average monthly rental revenue per square foot (3)	$	1.34		$	1.25		$	1.25		$	1.30
Occupancy for leased properties (7)		72.6	%		69.9	%		72.6	%		69.9	%
Straight-line rent	$	(877	)	$	(481	)	$	(1,291	)	$	(770	)
Leasing commissions	$	679		$	812		$	1,087		$	1,753
Non-recurring capital expenditures	$	670		$	1,142		$	2,442		$	2,841

LEASE ROLLOVER SCHEDULE:

Year	# of Leases	Rentable Square Feet	2011 Base Rent (5)
2011	-	-	$3,745,880
2012 (4)	9	425,587	6,754,892
2013	7	361,923	5,217,260
2014	22	1,823,675	30,259,873
2015	8	587,437	9,178,835
2016	8	394,806	5,957,657
2017	12	727,552	7,831,158
2018	5	431,606	4,058,174
2019	2	212,480	3,567,224
2020	3	208,768	4,327,563
Thereafter	1	105,000	3,809,319
Total	77	5,278,834	$84,707,835

BALANCE SHEETS
	December 31, 2011			December 31, 2010
Assets
Investments in real estate:
Land	$	306,474		$	322,076
Buildings and improvements		745,962			790,424
Real estate related intangible assets		3,561			3,240
Total investments in properties		1,055,997			1,115,740
Accumulated depreciation and amortization		(229,221	)		(224,027	)
Assets held for sale, net		54,361			3,267
Net investments in properties		881,137			894,980
Investment in unconsolidated joint venture		3,558			3,830
Net investments in real estate		884,695			898,810
Cash and cash equivalents		-			3,988
Restricted cash		-			6,892
Deferred rent		16,650			17,941
Other assets, net		35,142			40,653
Total assets	$	936,487		$	968,284
Liabilities and Equity
Liabilities:
Mortgage notes payable	$	331,166		$	345,770
Mortgage note payable – related parties		7,139			7,721
Revolving line of credit		3,305			-
Interest payable		1,606			1,659
Security deposits		4,317			4,605
Prepaid rent		5,836			6,526
Dividends and distributions payable		13,687			15,793
Accounts payable and accrued expenses		16,344			16,239
Total liabilities		383,400			398,313
Commitments and contingencies.
Equity:
Stockholders’ equity:
Common stock, $.001 par value		23			22
Additional paid-in capital		175,900			172,568
Distributions in excess of accumulated earnings		(32,962	)		(30,520	)
Total stockholders’ equity		142,961			142,070
Noncontrolling interests in operating partnerships		410,126			427,901
Total equity		553,087			569,971
Total liabilities and equity	$	936,487		$	968,284

(1)   Includes approximately $406 and $124 in amortization expense for the three months ended December 31, 2011 and 2010, respectively, and $981 and $708 in amortization expense for the years ended December 31, 2011 and 2010, 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.

(2)   Calculated on a fully diluted basis. Assumes conversion of all 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. Properties classified as assets held for sale were excluded from the 2011 calculation.

(4)   Excludes seven month-to-month leases for approximately 88,000 rentable square feet and approximately $494 in cash rent.

(5)   Base rent reflects cash rent.

(6)   Includes a one-time rent adjustment of approximately $1,638 from a tenant dispute resolution.

(7)   The occupancy rate at December 31, 2011, excludes properties classified as assets held for sale.