Mr. Kelter: Keystone Property Trust, headquartered in Pennsylvania, is a New York Stock Exchange-traded REIT (NYSE:KTR) with an asset base of roughly 900 million. The public company was founded in 1997 through a reverse merger of Penn Square Properties, a 20-year-old, fully integrated real estate development company in Philadelphia and the McBride Company in New Jersey, together with an equity investment from Crescent Real Estate Equities and CRA, into a small-cap AMEX shell called American Real Estate Investment Corporation. The merger was completed in December 1997. We started life as roughly a 200 million office and industrial REIT, and over the last four years have built the company into the largest public East Coast focused, big-box distribution center owner and operator. Our primary markets are New Jersey, Pennsylvania, Ohio, and Indiana.
TWST: Are REITs becoming more attractive to a lot of people because of
certain circumstances in our economy?
Mr. Kelter: You would think that they would. REITs are in general very
conservatively leveraged and pay out a pretty high dividend. Keystone's
dividend yield is in excess of 10% right now, with less than 50%
leverage and a 2.8 times debt service coverage, a 2.1 times fixed charge
coverage, and an FFO or dividend payout ratio of 72%. So you would think
that, with numbers like these, REIT investment would become more
popular. I think at the beginning of the first half of this year REITs
had a pretty good run-up and recently they've trended down a little bit.
Tickers included in this excerpt: KTR
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