PS Business Parks, Inc.

2,000,000 Depositary Shares

Each Representing 1/1,000 of a Share of

7.950% Cumulative Preferred Stock, Series K

Liquidation Preference Equivalent to

$25.00 Per Depositary Share

Underwriting Agreement

New York, New York

June 24, 2004

Citigroup Global Markets Inc.

Credit Suisse First Boston LLC

A.G. Edwards & Sons, Inc.

Goldman, Sachs & Co.

RBC Dain Rauscher Inc.

Banc of America Securities LLC

Bear, Stearns & Co. Inc.

McDonald Investments Inc.

Wells Fargo Securities, LLC

As Representatives of the several Underwriters,

c/o Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

Ladies and Gentlemen:

PS Business Parks, Inc., a real estate investment trust (REIT) and a California corporation (the Company), proposes to sell to the several underwriters named in Schedule I hereto (the Underwriters), for whom you (the Representatives) are acting as representatives, an aggregate of 2,000,000 shares (the Firm Shares) of its Depositary Shares (the Depositary Shares) each representing 1/1,000th of a share of 7.950% Cumulative Preferred Stock, Series K, stated value $25.00 per share (the Preferred Stock). The Company also proposes to sell to the Underwriters up to an additional 300,000 shares (the Additional Shares) of Depositary Shares. The Firm Shares and the Additional Shares are collectively referred to as the Shares.

The shares of Preferred Stock represented by the Shares (the Preferred Shares) will, when issued, be deposited by the Company against delivery of Depositary Receipts (the Depositary Receipts) to be issued by American Stock Transfer & Trust Company, as Depositary (the Depositary), under a Deposit Agreement (the Deposit Agreement) among the Company, the Depositary and the holders from time to time of the Depositary Receipts issued thereunder. Each Depositary Receipt will represent one or more Depositary Shares.

The Company wishes to confirm as follows its agreement with you and the other several Underwriters on whose behalf you are acting, in connection with the several purchases of the Shares by the Underwriters.

The terms which follow, when used in this Agreement, shall have the meanings indicated:

Act shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.

amend, amendment or supplement with respect to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the filing of any document under the Exchange Act after the Effective Date of the Registration Statement, or the issue date of any Preliminary Prospectus or the Prospectus, as the case may be, deemed to be incorporated therein by reference.

Commission shall mean the United States Securities and Exchange Commission.

Effective Date shall mean each date that the Registration Statement and any post-effective amendment or amendments thereto became or become effective.

Exchange Act shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.

Execution Time shall mean the date and time that this Agreement is executed and delivered by the parties hereto.

Preliminary Prospectus shall mean any preliminary prospectus or preliminary prospectus supplement relating to the Shares and the Preferred Shares, in each case filed pursuant to Rule 424(b).

Prospectus shall mean the prospectus and any prospectus supplement relating to the Shares that is first filed pursuant to Rule 424(b) after the Execution Time.

Registration Statement shall mean the Registration Statement referred to in Section 4(a), including exhibits and financial statements, as amended at the Execution Time and, in the event any post-effective amendment thereto becomes effective prior to the Closing Date, shall also mean such registration statement as so amended.

Rule 424 refers to such rule under the Act.

(a) On the basis of the representations, warranties and agreements of the Company herein contained and subject to all the terms and conditions of this Agreement, the Company agrees to sell to the Underwriters and each Underwriter agrees, severally and not jointly, to purchase from the Company, at a purchase price of $24.2125 per share (the purchase price per share), the number of Firm Shares set forth opposite the name of such Underwriter in Schedule

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I hereto (or such number of Firm Shares increased as set forth in Section 9 hereof).

(b) The Company also agrees, subject to all the terms and conditions set forth herein, to sell to the Underwriters, and, upon the basis of the representations, warranties and agreements of the Company herein contained and subject to all the terms and conditions set forth herein, the Underwriters shall have the right to purchase from the Company, at the purchase price per share, plus accumulated dividends, if any, on an Additional Share to the date of purchase, pursuant to an option (the over-allotment option) which may be exercised at any time and from time to time prior to 9:00 P.M., New York City time, on the 30th day after the date of the Prospectus (or, if such 30th day shall be a Saturday or Sunday or a holiday, on the next business day thereafter when the American Stock Exchange is open for trading), up to an aggregate of 300,000 Additional Shares. Additional Shares may be purchased only for the purpose of covering over-allotments made in connection with the offering of the Firm Shares. Upon any exercise of the over-allotment option, each Underwriter, severally and not jointly, agrees to purchase from the Company the number of Additional Shares (subject to such adjustments as you may determine in order to avoid fractional shares) which bears the same proportion to the number of Additional Shares to be purchased by the Underwriters as the number of Firm Shares set forth opposite the name of such Underwriter in Schedule I hereto (or such number of Firm Shares increased as set forth in Section 9 hereof) bears to the aggregate number of Firm Shares.

The Company has been advised by you that the Underwriters propose to make a public offering of their respective portions of the Shares as soon after this Agreement has been entered into and the Registration Statement (as defined herein), and, if necessary, any post-effective amendment to the Registration Statement, has become effective as in your judgment is advisable and initially to offer the Shares upon the terms set forth in the Prospectus.

Delivery to the Underwriters of and payment for the Firm Shares shall be made at the office of Citigroup Global Markets Inc., 388 Greenwich Street, New York, NY 10013, at 10:00 A.M., New York City time, on June 30, 2004 (the Closing Date). The place of closing for the Firm Shares and the Closing Date may be varied by agreement between you and the Company.

Delivery to the Underwriters of and payment for any Additional Shares to be purchased by the Underwriters shall be made at the aforementioned office of Citigroup Global Markets Inc. at such time on such date (the Option Closing Date), which may be the same as the Closing Date but shall in no event be earlier than the Closing Date nor earlier than three nor later than ten business days after the giving of the notice hereinafter referred to, as shall be specified in a written notice from you on behalf of the Underwriters to the Company of the Underwriters determination to purchase a number, specified in such notice, of Additional Shares. The place of closing for any Additional Shares and the Option Closing Date for such Shares may be varied by agreement between you and the Company.

Certificates for the Firm Shares and for any Additional Shares shall be registered in such names and in such denominations as you shall request prior to 1:00 P.M., New York City time,

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on the second business day preceding the Closing Date or any Option Closing Date, as the case may be. Such certificates shall be made available to you in New York City for inspection and packaging not later than 9:30 A.M., New York City time, on the business day immediately preceding the Closing Date or the Option Closing Date, as the case may be. The certificates evidencing the Firm Shares and any Additional Shares to be purchased hereunder shall be delivered to you on the Closing Date or the Option Closing Date, as the case may be, against payment of the purchase price therefor by wire transfer of immediately available funds to the order of the Company.

The Company and PS Business Parks, L.P., a limited partnership under the laws of the state of California (the Operating Partnership, and together with the Company, the Primary Entities), jointly and severally, represent and warrant to and agree with the Underwriters that:

(a) The Company has filed with the Commission a registration statement, file number 333-112969, on Form S-3, including the related prospectus included in the Registration Statement, for the registration under the Act, of the offering and sale of, interalia, the Shares. The Company may have filed one or more amendments thereto, including each related prospectus, and one or more prospectus supplements thereto, each of which has previously been furnished to the Representatives. The Company has filed with, or transmitted for filing to, or shall promptly hereafter file with or transmit for filing to, the Commission a prospectus supplement (the Prospectus Supplement) specifically relating to the Shares pursuant to Rule 424 under the Act. The Company has included or will include in such Registration Statement, as amended at the Execution Time, and in the Prospectus Supplement all information required by the Act and the rules thereunder to be included therein with respect to the Shares and the offering thereof. As filed, such Registration Statement, as so amended, and form of final prospectus contained in the Registration Statement and Prospectus Supplement, or such final prospectus and Prospectus Supplement, contains or will contain all required information with respect to the Shares and the offering thereof and, except to the extent the Representatives shall agree in writing to a modification, shall be in all substantive respects in the form furnished to the Underwriters prior to the date hereof or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes as the Company has advised the Representatives, prior to the Execution Time, will be included or made therein.

(b) On the Effective Date, the Registration Statement did or will, and, when the Prospectus Supplement is first filed in accordance with Rule 424(b) and on the Closing Date, the Prospectus will, comply in all material respects with the requirements of the Act and the rules thereunder; on the Effective Date, the Registration Statement did not or will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading; and, on the date of any filing pursuant to Rule 424(b) and on the Closing Date, the Prospectus will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however,

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that the Company makes no representations or warranties as to the information contained in or omitted from the Registration Statement or the Prospectus in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Underwriter through the Representatives specifically for inclusion in the Registration Statement or the Prospectus. The Registration Statement has become effective under the Act, and no stop order suspending the effectiveness of the Registration Statement is in effect and no proceedings for such purpose are pending before or, to the knowledge of the Primary Entities, threatened by, the Commission.

(c) The documents incorporated or deemed to be incorporated by reference into the Registration Statement and the Prospectus pursuant to Item 12 of Form S-3 under the Act (the Incorporated Documents), at the time they were or hereafter are filed with the Commission, complied or will comply in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission thereunder, and, when read together with the other information in the Prospectus, at the date of the Prospectus, as of the Closing Date and any later date on which Additional Shares are to be purchased, did not and will not include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(d) Ernst & Young LLP, an accounting firm that audited certain financial statements and supporting schedules included in, or incorporated by reference into, the Registration Statement and the Prospectus, are, and during the periods covered by such reports were, independent public accountants as required by the Act. PricewaterhouseCoopers LLP, an accounting firm that also audited certain financial statements and supporting schedules included in, or incorporated by reference into, the Registration Statement and the Prospectus, are, and during the periods covered by such reports were, independent public accountants as required by the Act.

(e) The financial statements (including the notes and schedules thereto) included in, or incorporated by reference into, the Registration Statement and the Prospectus present fairly the financial position of the respective entity or entities or group presented therein at the respective dates indicated and the results of their operations for the respective periods specified; except as otherwise stated in the Registration Statement and Prospectus, said financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis; the supporting schedules included or incorporated by reference in the Registration Statement and the Prospectus present fairly the information included or incorporated therein and have been prepared on a basis consistent, except as may be noted therein, with that of the financial statements included in, or incorporated by reference into, the Registration Statement and the Prospectus and the books and records of the respective entities presented therein. The summary and selected financial data included in, or incorporated by reference into, the Prospectus present fairly the information shown therein as at the respective dates and for the respective periods specified, and the summary and selected financial data have been presented on a basis consistent with the financial statements so set forth in the Prospectus and other financial information. Pro forma financial information included in or incorporated by reference into the Registration Statement and the Prospectus has been

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