Keystone Property Trust Releases Updated Third Quarter Results Reflecting Changes Due to the Deferral of FASB Statement 150

Keystone Property Trust Releases Updated Third Quarter Results Reflecting
Changes Due to the Deferral of FASB Statement 150 


WEST CONSHOHOCKEN, Pa., Nov. 3  /PRNewswire-FirstCall/ -- Keystone Property
Trust  today released updated financial results for the third quarter of 2003
solely due to the Financial Accounting Standard Board's ("FASB") October 29,
2003 announcement that certain provisions of Statement of Financial Accounting
Standard No. 150, "Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity" ("FASB 150"), related to the
accounting for the minority interest of consolidated subsidiaries with finite
lives, will be indefinitely deferred.  In the Company's October 21, 2003 press
release announcing third quarter earnings, the Company had recorded a charge of
$224,000 or $0.01 per diluted share for the cumulative effect of an accounting
change related to this provision of FASB 150.

Due to the revised accounting treatment the Company has revised its third
quarter earnings, previously reported on October 21, 2003, to eliminate this
$224,000 charge.  Accordingly, the Company is now reporting net income allocated
to common shareholders for the quarter of $3.8 million, or $0.17 per diluted
share, as compared with a net loss of $19.6 million, or $1.01 per diluted share,
for the third quarter of 2002.  Net income allocated to common shareholders for
the nine months ended September 30, 2003 was $12.4 million, or $0.57 per diluted
share, as compared with a net loss of $13.3 million, or $0.70 per diluted share,
for the nine months ended September 30, 2002.

There was no change in the company's reported Funds from Operations ("FFO") per
share information as the amount originally recorded due to the provisions of
FASB 150 was reflected as the cumulative effect of an accounting change. 
Established NAREIT guidelines for the computation of FFO provide that the
cumulative effect of an accounting change is excluded from the calculation of
FFO for any reporting period.

The accompanying financial results for the third quarter and the nine months
ended September 30, 2003 are an update to the press release of October 21, 2003
and reflect the accounting treatment in accordance with the recent FASB
announcement on FASB 150.

Keystone Property Trust, with headquarters in West Conshohocken, Pennsylvania,
is a fully integrated real estate investment trust with a current portfolio of
127 properties, including properties under development, aggregating 31 million
square feet in the Eastern half of the United States. For more information,
contact Aleathia M. Hoster at [phone], send email to  or visit the
Company website at http://www.keystoneproperty.com/.

This press release may contain statements which constitute forward looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding the intent, belief or current expectations
of the Company, its trustees, or its officers with respect to the future
operating performance of the Company and the result and the effect of legal
proceedings.  Investors are cautioned that any such forward looking statements
are not guarantees of future performance and involve risks and uncertainties,
and that actual results may differ materially from those in the forward looking
statements as a result of various factors. Important factors that could cause
such differences are described in the Company's periodic filings with the
Securities and Exchange Commission, including the Company's Form 10-K and
quarterly reports on Form 10-Q.

                             For the three months    For the nine months
                              ended September 30,     ended September 30,
                                 (unaudited)              (unaudited)
                                2003        2002        2003        2002
  REVENUE:
  Rents                       $18,807     $21,517     $53,851     $63,295
  Reimbursement revenue and
   other income                 3,825       3,425      10,717       9,984
       Total revenue           22,632      24,942      64,568      73,279
  OPERATING EXPENSES:
  Property operating
   expenses                     1,060       1,876       3,521       5,549
  Real estate taxes             2,513       2,554       6,878       7,446
  General and administrative    2,397       2,028       7,676       5,980
  Employee termination costs        -         930           -         930
  Depreciation and
   amortization                 5,641       5,021      15,772      15,575
  Provision for asset
   impairment                       -      30,200           -      30,200
       Total operating
        expenses               11,611      42,609      33,847      65,680

  Income (loss) before
   equity in income from
   equity method
   investments, gains
   (losses) on sales of
   assets, interest expense,
   distributions to
   preferred unitholders,
   minority interest of
   unitholders in Operating
   Partnership, and
   discontinued operations      11,021     (17,667)     30,721       7,599
  Equity in income from
   equity method investments     1,621         266       4,484         583
  Gains (losses) on sales of
   assets                            -           -       3,221        (430)
  Interest expense               4,736       6,369      14,037      18,507

  Income (loss) before
   distributions to
   preferred unitholders,
   minority interest of
   unitholders in Operating
   Partnership, and
   discontinued operations       7,906     (23,770)     24,389     (10,755)
  Distributions to preferred
   unitholders                  (1,268)     (1,424)     (3,804)     (4,317)
  Minority interest of
   unitholders in Operating
   Partnership                    (944)      6,092      (3,163)      3,987

  Income (loss) from
   continuing operations         5,694     (19,102)     17,422     (11,085)

  Discontinued operations:
       Income from
        discontinued
        operations                   -          86         -           323
       Gain on disposition of
        discontinued
        operations                   -         871         -           871
       Minority interest             -        (235)        -          (294)
                                     -         722         -           900

  NET INCOME (LOSS)              5,694     (18,380)     17,422     (10,185)
  NET INCOME ALLOCATED TO
   PREFERRED SHAREHOLDERS       (1,940)     (1,208)     (4,980)     (3,083)
  NET INCOME (LOSS)
   ALLOCATED TO COMMON
   SHAREHOLDERS                 $3,754    $(19,588)    $12,442    $(13,268)

  EARNINGS PER COMMON SHARE
   - BASIC:
       Income (loss) from
        continuing
        operations               $0.17      $(1.05)      $0.57      $(0.75)
       Discontinued
        operations                   -        0.04           -        0.05
       Income (loss)  per
        Common Share - Basic     $0.17      $(1.01)      $0.57      $(0.70)

  WEIGHTED AVERAGE COMMON
   SHARES - BASIC           21,798,811  19,489,288  21,656,634  18,845,599

  EARNINGS PER COMMON SHARE
   - DILUTED:
       Income (loss) from
        continuing
        operations               $0.17      $(1.05)      $0.57      $(0.75)
       Discontinued
        operations                   -        0.04           -        0.05
       Income (loss) per
        Common Share -
        Diluted                  $0.17      $(1.01)      $0.57      $(0.70)

  WEIGHTED AVERAGE COMMON
   SHARES - DILUTED         27,617,792  19,489,288  27,424,617  18,845,599


                                                         As of:
                                             September 30,     December 31,
                                                 2003             2002
                                              (unaudited)

  BALANCE SHEET DATA:
  Real estate investments, before
   accumulated depreciation                     $840,223          $677,127
  Total assets                                   837,221           671,654
  Total debt                                     426,625           325,796
  Total liabilities                              453,436           346,021
  Minority interest in Operating
   Partnership                                    44,381            31,658
  Convertible preferred units                     52,892            52,892
  Stockholders' equity                           286,512           241,083

                                 For the three months   For the nine months
                                 ended September 30,    ended September 30,
                                     (unaudited)           (unaudited)

  FUNDS FROM OPERATIONS (1):      2003      2002 (3)     2003      2002 (3)
  Net Income (Loss)
   Allocated to Common
   Shareholders                  $3,754    $(19,588)    $12,442    $(13,268)
       Income Allocated to
        Preferred
        Shareholders              1,940         797       4,980       2,672
       Redeemable Preferred
        Stock Dividends          (1,574)        -        (3,883)        -
       Minority Interest of
        Unitholders in
        Operating
        Partnership                 944      (5,857)      3,163      (3,693)
       Distributions to
        Preferred
        Unitholders               1,268       1,424       3,804       4,317
       (Gains) Losses on
        Sales of Assets             -          (871)     (3,221)       (441)
       Depreciation and
        Amortization Related
        to Real Estate            5,641       4,895      15,772      15,538
       Depreciation and
        Amortization Related
        to Joint Ventures           443         206       1,198         546

  Funds from operations         $12,416    $(18,994)    $34,255      $5,671

  Basic FFO per share             $0.39      $(0.60)      $1.08       $0.18

  Diluted FFO per share           $0.39      $(0.60)      $1.08       $0.18

  Diluted weighted average
   shares and units (2)      31,854,559  31,409,399  31,661,384  31,235,134

  Dividend paid per common
   share                         $0.330      $0.325      $0.980      $0.965

  FFO dividend payout ratio       84.6%         N/A       90.7%         N/A

  (1)  The Company uses Funds from Operations ("FFO") as a non-GAAP
       performance measure in addition to net income determined in
       accordance with GAAP.  FFO is a widely used measurement by investors
       for evaluating the operating performance of an equity REIT.

       Management believes that FFO is a useful disclosure as a non-GAAP
       performance measure as historical cost accounting for real estate
       assets, as required in accordance with GAAP, implicitly assumes that
       the value of real estate assets diminishes predictably over time as
       reflected through depreciation and amortization expenses.  The
       Company believes that the value of real estate assets does not
       diminish predictably over time, as is assumed in GAAP accounting,
       and instead fluctuates due to market and other conditions.
       Accordingly, the Company believes FFO provides investors with useful
       supplemental information about the Company's operating performance
       because it excludes real estate depreciation and amortization
       expense and also gains and losses from the sale of depreciated real
       estate assets.  However, FFO does not represent cash generated from
       operating activities in accordance with GAAP and it also does not
       consider the costs associated with capital expenditures related to
       the Company's real estate assets.  Also it is not necessarily
       indicative of cash available to fund cash needs and should not be
       considered as an alternative to net income (as determined in
       accordance with GAAP) as an indicator of the Company's operating
       performance or as an alternative to cash flow from operating
       activities (as determined in accordance with GAAP) as a measure of
       liquidity.

       NAREIT defines FFO as net income (loss) computed in accordance with
       GAAP, excluding gains (or losses) from sales of property, plus
       depreciation and amortization, and after adjustments for
       unconsolidated partnerships and joint ventures.  Adjustments for
       unconsolidated partnerships and joint ventures are calculated to
       reflect FFO on the same basis.  Since 2000, NAREIT has clarified the
       definition of FFO to include non-recurring events (except for those
       that are defined as "extraordinary items" or cumulative effects of
       accounting changes under GAAP) and the results of discontinued
       operations.  The Company has presented FFO on a consistent basis for
       all periods presented.

  (2)  Diluted weighted average shares for 2003 and 2002, as shown above,
       include convertible preferred shares and all common and preferred
       units in the Operating Partnership, each on an as-converted basis.

  (3)  FFO reflects a $30.2 million charge in the third quarter of 2002 and
       a $31.6 million charge for the nine months ended September 30, 2002
       for asset impairment that was not added back to net income to
       calculate FFO, as a result of recent guidance from the SEC and
       NAREIT that impairment charges should not be added back in the
       calculation of FFO.


DATASOURCE: Keystone Property Trust



CONTACT:  Aleathia M. Hoster of Keystone Property Trust, [phone],

or MEDIA: Michael Beckerman, [phone], , for

Keystone Property Trust



Web site:  http://www.keystoneproperty.com/ 

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