The owner of eight million square feet in 111 properties in the Silicon Valley said net income for the first quarter was $5.63 million ($0.07 per diluted common share), down 38% from $9.12 million ($0.10 per share) in the first quarter of 2008. FFO in the first quarter was $12.07 million ($0.11 per share), a 20% decline from $15.22 million ($0.14 per share) in the first quarter of 2008.

The company lost $2.76 million on its investments in marketable securities, which cut $0.02 per share from its profit and $0.03 from its FFO. The loss is the result of the company buying stock in Apartment Investment Management Co. AIV's share price has fallen since the shares were acquired in the fourth quarter of 2008.

In the past 52 weeks MSW's share price has traded as high as $12.45 [May 2, 2008] and as low as $5.60 [March 09, 2009]. A few days after its previous low on $5.69 in November, Mission West's board authorized the purchase of up to $5 million of its common stock on the open market. Instead, the company recently acquired stock in AIV at an average price of $9.55 per share after dividends. "We believe they are capable of making their dividend and we think there is some upside in the stock," CEO Carl Berg told investors during the company's fourth quarter conference call in early February.

AIV then promptly reported a greater-than-expected fourth quarter loss , warned that it its 2009 results would come in below Wall Street's already low forecasts, and announced plans to slash its dividend and cut at least 300 jobs. Shares of AIV closed out the fourth quarter at $5.85, down nearly 50% from $11.44 at the start of the year. Shares of Mission West, meanwhile, ended March at $6.40 per share, down only 13% from $7.41 at the start of the year. AIV's share price was back up to $6.99 this week, while MSW's was back up to $7.15.

"We're not worries about the short term," Berg told analysts late last week. "We bought this as a long-term hold for the next two or three years and we think it will be a terrific return."If not in its stock picks Mission West saw improvements in both occupancy and rent during the first three months of the year. Its average occupancy came in at 65.3% for the quarter, up 90 basis points from 64.4% in the same 2008 period. The average rent increased to $1.29 per square foot per month from $1.23 in the same 2008 period.

While not addressed in recent conference calls, the company's vacancy picture is not what it seems. Four percent of the vacancy is space for which it is being paid until 2011, company president Ray Marino said late last year. An additional 10% of the vacancy is related to the McCandless properties, which it is looking to sell for residential development. A key city approval is expected to occur in June.

Moreover, the company's vacancy and rates have been holding steady while the market as a wholes gives back space and lowers its rents, Berg said in response to a question about the obsolescence of the company's vacant space. While Berg isn't hot on the near-term prospects for Fremont, where the company has several vacancy buildings, he's confident that the current market will continue to benefit its portfolio.

"Las year the overall market had negative absorption and we had positive absorption," he said. "This quarter we had almost no change in occupancy and the market as a whole gave back three million square feet. We are running against the trend. People are being cost conscious. These kinds of conditions are perfect for or type of property."