During the fourth quarter of 2001, Mission West acquired one R&D property in San Jose, which added 98,500-sf of rentable space at a cost of $6.7 million. This property is a part of the ONI Systems campus at 5905-5965 Silver Creek Valley Road and was acquired from the Berg Group under the Berg Land Holdings Option Agreement. The combined first year unleveraged cash return for both phases at 5905-5965 Silver Creek is approximately 22%.

"The company's financial results reflect a solid performance for 2001 in light of the difficult economic times in Silicon Valley and in the U.S. economy in general," says Carl E. Berg, Chairman and CEO of Mission West. "Since many of Silicon Valley's companies are continuing to experience financial difficulties, we feel that it is prudent to establish a reserve relating to potential realization of tenant related assets." "Based on what we know today about our current tenants and the overall market, we feel confident that we will be able to maintain a dividend of $0.96 per share for 2002," added Mr. Berg.

Mission West acquired a total of eight properties during 2001, including the Silver Creek Valley property, from the Berg Group under the Berg Land Holdings Option Agreement, consisting of approximately 747,000 rentable square feet for a total acquisition cost of approximately $80.7 million with a combined weighted average first year anticipated unleveraged cash return of approximately 18.4%. In addition, Mission West acquired two properties from the Berg Group consisting of 127,000 rentable square feet in a $23.2 million transaction. The combined weighted average first year anticipated unleveraged cash return for these properties is approximately 19.2%.