Keystone acquired the 11-building Westpark Business center from J.P. Morgan Investment Management Inc. in a $55.6-million deal. The 1.4 million-sf portfolio is approved for the development of an additional 300,000 sf. The Allentown, PA property is currently 93% leased, with major tenants including J.C. Penney, Kia Motors, Behr Process and TruServ.
According to Keystone president and CEO Jeffrey Kelter, Westpark was purchased with funds realized from the $78-million sale of the McBride portfolio, a 22-building New Jersey office/flex asset.
Kelter says the Westpark buy is "representative of the further execution of our operating plan of recycling investment dollars out of our non-core assets and into synergistic distribution center assets in our core markets."
Keystone also has taken a major step toward its stated goal of improving its financial flexibility by closing on a $125-million unsecured credit line. The new facility has a three-year term and Keystone has the option to exercise a one-year extension.
Wells Fargo National Bank arranged the new credit facility and is acting as administrative agent. Wachovia Securities is the syndication agent and the documentation agent is the Bank of New York. Chevy Chase Bank, Key Bank, LaSalle Bank, Mellon Bank and US Bank are also participants.
"We began 2001 as a secured borrower with a balance sheet more heavily leveraged than our public REIT peers and virtually all of our assets encumbered," Kelter says. "We have accomplished one of our primary objectives for the year, which was to reduce overall indebtedness, improve our financial flexibility,restructure our line of credit to an unsecured facility and ultimately reduce our cost of debt capital."
Keystone has a portfolio of 125 industrial and office properties in the Eastern US with an aggregate 22 million sf.
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