SECURITIES AND EXCHANGE COMMISSION
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 14, 2003
KEYSTONE PROPERTY TRUST
| Maryland | 1-12514 | 84-1246585 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
200 Four Falls Corporate Center, Suite 208
West Conshohocken, PA 19428
(Address of Principal Executive Offices)(Zip Code)
Registrant’s telephone number, including area code:
(484) 530-1800
| ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS | ||||||||
| ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS | ||||||||
| SIGNATURES | ||||||||
| LIMITED LIABILITY PARTNERSHIP AGREE. OF KPJV, LLP | ||||||||
The purpose of this filing is to report the closing of the Capital Business Center (“Capital Business Center”) acquisition and the closing of the joint venture with the Mercantile Safe Deposit and Trust Company as Trustee for the AFL-CIO Building Investment Trust (the “BIT JV”).
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
BIT JV Properties Disposition
On February 14, 2003, the Company entered into a joint venture agreement (the “Agreement”) with the Mercantile Safe Deposit and Trust Company as Trustee for the AFL-CIO Building Investment Trust (“AFL-CIO”) forming a joint venture (the “BIT JV”), to own industrial warehouse properties. The Company sold six properties and contributed two properties (such eight properties, the “BIT JV Properties”) located in New Jersey, Indiana and Pennsylvania consisting of approximately 2.0 million square feet to the joint venture at a price of $90.3 million. The Company obtained a 20% ownership interest in the BIT JV and Keystone Realty Services, Inc. will be the exclusive management agent of the properties owned by the BIT JV. The AFL-CIO was unaffiliated with the Company and its subsidiary partnerships at the time of this transaction.
The properties sold or contributed to the BIT JV are as follows:
| Leaseable | Occupancy | Year Built/ | ||||||||||||||
| Property Address | Location | Square Feet | January 31, 2003 | Renovated | Major Tenants | |||||||||||
| 34 Englehard Drive(1) | Cranbury, NJ | 203,404 | 100.0 | % | 1979 | Setco, Inc. | ||||||||||
| 6829 Ruppsville Road(1) | Allentown, PA | 100,000 | 100.0 | % | 1986 | TruServ Corporation | ||||||||||
| 6831 Ruppsville Road(1) | Allentown, PA | 80,000 | 100.0 | % | 1987 | Vanguard Manufacturing, Inc. | ||||||||||
| 7520 Morris Court(1) | Allentown, PA | 154,156 | 83.9 | % | 1989 | J.C. Penney Company, Inc. | ||||||||||
| 7566 Morris Court(1) | Allentown, PA | 111,300 | 100.0 | % | 1991 | G&T Industries, Inc. | ||||||||||
| 4400 West 96th Street(2) | Indianapolis, IN | 100,000 | 100.0 | % | 1998 | Support Net | ||||||||||
| 501 Airtech Drive(2) | Plainfield, IN | 495,740 | 100.0 | % | 2000 | Brightpoint North America, Inc. | ||||||||||
| 558 Airtech Drive(1) | Plainfield, IN | 798,096 | 100.0 | % | 2001 | Belkin Corporation | ||||||||||
| Total | 2,042,696 | |||||||||||||||
| (1) | The Company sold these six properties to the BIT JV. | |
| (2) | The Company contributed these two properties to the BIT JV. |
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Capital Business Center Acquisition
On February 20, 2003, the Company, through Keystone Operating Partnership L.P. (the “Operating Partnership”), acquired Capital Business Center which is a portfolio of properties consisting of six warehouse buildings located near Harrisburg, Pennsylvania totaling approximately 1.6 million square feet. Total consideration for this acquisition was approximately $47.9 million, including closing costs, and was funded using proceeds from the Company’s February 2003 offering and borrowings under the Company’s line of credit facility. The sellers of the Capital Business Center, Capital Lane Property Holding, LP and Capital Lane Property Holding II, LP, were unaffiliated entities at the time of the acquisition. The Company has placed the Capital Business Center portfolio in service as operating properties in its Operating Partnership.
The properties acquired by the Company are located in Middletown, PA as follows:
| Leaseable | Occupancy | Year Built/ | ||||||||||
| Property Address | Square Feet | January 31, 2003 | Renovated | Major Tenants | ||||||||
| 400 First Street, Bldg. 1 | 167,500 | 100.0 | % | 1959/1996 | Exel Logistics, Inc. | |||||||
| 401 First Street | 490,140 | 100.0 | % | 1963/1996 | Exel Logistics, Inc. | |||||||
| 500 Industrial Lane | 115,890 | 100.0 | % | 1970/1996 | Exel Logistics, Inc. | |||||||
| 400 First Street, Bldg. 6 | 242,824 | 100.0 | % | 1998 | SED International, Inc. | |||||||
| 600 Hunter Lane | 216,387 | 100.0 | % | 1996 | United Fixtures Company | |||||||
| 300 Hunter Lane | 321,333 | 100.0 | % | 1996 | Electrolux Home Products | |||||||
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| Total | 1,554,074 | |||||||||||
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The Company based its determination of the purchase price of Capital Business Center and the sales price of the BIT JV Properties on the expected cash flow, physical condition, location, competitive advantages, existing tenancies and opportunities to retain and attract tenants. The prices were determined through arm’s length negotiations between the Company and the applicable third parties. The Company has determined that the acquisition of Capital Business Center is significant under the rules and regulations of the Securities and Exchange Commission.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
| (a) | Pro Forma Financial Information | ||
| Incorporated by Reference in a Current Report on Form 8-K filed with the Securities and Exchange Commission on February 10, 2003 (dated January 31, 2003). | |||
| (b) | Financial Statement of Business Disposed/Acquired | ||
| Incorporated by Reference in a Current Report on Form 8-K filed with the Securities and Exchange Commission on February 10, 2003 (dated January 31, 2003). | |||
| (c) | Exhibits | ||
| 10.1 Limited Liability Partnership Agreement of KPJV, LLP, a Delaware limited liability partnership. |
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SIGNATURES
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, thereunto duly authorized.
| KEYSTONE PROPERTY TRUST | ||||||||||
| Date: February 28, 2003 | By | /s/ Jeffrey E. Kelter | ||||||||
| Jeffrey E. Kelter | ||||||||||
| President and Chief Executive Officer | ||||||||||
| Date: February 28, 2003 | By | /s/ Timothy E. McKenna | ||||||||
| Timothy E. McKenna | ||||||||||
| Senior Vice President and Chief Financial Officer | ||||||||||
| Date: February 28, 2003 | By | /s/ J. Peter Lloyd | ||||||||
| J. Peter Lloyd | ||||||||||
| Vice President
and Chief Accounting Officer |
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