ProLogis and the Eaton Vance affiliates have formed fiveseparate entities to buy Keystone's 22.9 million sf of bulkindustrial properties, which are valued at $1.4 billion. The EatonVance affiliates will own 80% and ProLogis will own 20% of each ofthe entities. ProLogis will receive management and performanceincentive fees from the newly formed entities, which is consistentwith the practice at existing ProLogis property funds. In addition,ProLogis will purchase directly the remaining 10.9 million sf ofassets own by Keystone or by Keystone JVs, for $290 million.

Locally based Keystone's current portfolio consists of 147properties, including ones under development, aggregating more than34 million sf in the Eastern US. The purchase significantlyenhances ProLogis's positions in New Jersey, eastern Pennsylvania,Indianapolis and the Miami airport market, "four of the mostimportant logistics markets in the US," says K. Dane Booksher,chairman and CEO of ProLogis.

In addition, several of Keystone's major customers are currentProLogis customers. They include Exel Logistics, the Home Depot,Procter & Gamble, APL Logistics and Sears Logistics Services.The Keystone acquisition brings the total number of assets undermanagement in ProLogis Property Funds to $7.6 billion.