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                                                                    EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

                  THIS EMPLOYMENT AGREEMENT, dated as of July 1, 2000, by and
between Keystone Property Trust (the "Company") and John B. Begier
("Executive"), recites and provides as follows:

                              W I T N E S S E T H:

                  WHEREAS, the Company is a self-administered Maryland real
estate investment trust which owns, acquires, develops and leases office and
industrial properties;

                  WHEREAS, the Company desires to employ Executive to devote
substantially all of his working time to the business of the Company, including,
without limitation, the operation and management of the Company and the
properties, and to serve as Executive Vice President of the Company; and

                  WHEREAS, Executive desires to be so employed on the terms and
subject to the conditions hereinafter stated.

                  NOW, THEREFORE, IN CONSIDERATION of the mutual covenants,
promises and obligations of the parties provided for in this Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

                  A. DEFINITIONS.

                  For purposes of this Agreement, the following terms shall have
the following meanings (applicable to both the singular and plural forms of the
terms defined):

                  1. "Acquisition of Office or Industrial Property" means
engaging in the activity of soliciting, seeking to acquire, obtaining an option
or first right of refusal to acquire, or acquiring, any interest in an Office or
Industrial Property or in real property planned for development as an Office or
Industrial Property.

                  2. "Affiliate" means (i) any person directly or indirectly
controlling, controlled by, or under common control with such other person, (ii)
any executive officer, director, trustee or general partner of such other
person, and (iii) any legal entity for which such person acts as an executive
officer, director, trustee or general partner. The term "person" means and
includes any natural person, corporation, partnership, association, limited
liability company or any other legal entity.

                  3. "Board" means the Board of Trustees of the Company.

                  4. "Change in Control" means the happening of any of the
following:

                  (i) any "person," including a "group" (as such terms are used
                  in Sections 13(d) and 14(d) of the Securities Exchange Act of
                  1934, as amended (the "Exchange Act")), but excluding the
                  Company, any entity controlling, controlled

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                  by or under common control with the Company, any employee
                  benefit plan of the Company or any such entity, and, with
                  respect to Executive, Executive and any "group" (as such term
                  is used in Section 13(d)(3) of the Exchange Act) of which
                  Executive is a member, is or becomes the "beneficial owner"
                  (as defined in Rule 13d-3 under the Exchange Act), directly or
                  indirectly, of securities of the Company representing 50% or
                  more of either (A) the combined voting power of the Company's
                  then outstanding securities or (B) the then outstanding shares
                  (in either such case other than as a result of an acquisition
                  of securities directly from the Company); or

                  (ii) any consolidation or merger of the Company or any
                  subsidiary where (A) the shareholders of the Company,
                  immediately prior to the consolidation or merger, would not,
                  immediately after the consolidation or merger, beneficially
                  own (as such term is defined in Rule 13d-3 under the Exchange
                  Act), directly or indirectly, shares representing in the
                  aggregate 60% or more of the voting securities of the
                  corporation issuing cash or securities in the consolidation or
                  merger (or of its ultimate parent corporation, if any), and
                  (B) the members of the Board immediately prior to such event
                  fail to constitute a majority of the board of directors or
                  trustees of the successor business organization; or

                  (iii) there shall occur (A) any sale, lease, exchange or other
                  transfer (in one transaction or a series of transactions
                  contemplated or arranged by any party as a single plan) of all
                  or substantially all of the assets of the Company, other than
                  a sale or disposition by the Company of all or substantially
                  all of the Company's assets to an entity, at least 50% of the
                  combined voting power of the voting securities of which is
                  owned by persons in substantially the same proportion as their
                  ownership of the combined voting power of the voting
                  securities of the Company immediately prior to such transfer,
                  or (B) the approval by shareholders of the Company of any plan
                  or proposal for the liquidation or dissolution of the Company;
                  or

                  (iv) the members of the Board at the beginning of any
                  consecutive 24-calendar-month period (the "Incumbent
                  Trustees") cease for any reason other than due to death to
                  constitute at least a majority of the members of the Board;
                  provided that any trustee whose election, or nomination for
                  election by the Company's shareholders, was approved by a vote
                  of at least a majority of the members of the Board then still
                  in office who were members of the Board at the beginning of
                  such 24-calendar-month period shall be deemed to be an
                  Incumbent Trustee.

                  5. 5. "Change-in-Control Severance Amount" means an amount
equal to the sum of (A) Executive's annual base salary as of the Termination
Date (as hereinafter defined), (B) the greater of (1) the average Annual Bonus
(as hereinafter defined) for the three fiscal years prior to the Termination
Year (as hereinafter defined) or (2) the target Annual Bonus for the Termination
Year, and (C) the average of the dollar amounts awarded to Executive in the form
of Incentive Compensation (as hereinafter defined) for the three fiscal years
prior to the Termination Year.

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                   6. "Competitive Activity" means engaging in directly, through
an Affiliate, or being employed by any entity undertaking, or otherwise
undertaking to do any of the following within a 30-mile radius of any Property
of the Company: (i) Acquisition of Office or Industrial Property, (ii) Office or
Industrial Property Ownership or Leasing, (iii) Office or Industrial Property
Construction, (iv) Office or Industrial Property Entitlements, (v) Speculation,
or (vi) Office or Industrial Property Management and Operation. Notwithstanding
any of the foregoing to the contrary, after Executive ceases to be employed by
the Company, Executive may work as a broker for a real estate brokerage company
which acts as a broker in transactions involving fee or leasehold interests in
Office or Industrial Property.

                  7. "Employment Term" means the Initial Term, as herein
defined, and the successive annual renewals of this Agreement until terminated.
The initial term of Executive's employment hereunder (the "Initial Term") shall
be for a period of two years, commencing on the date hereof and continuing until
the second anniversary of the date hereof, unless terminated earlier as provided
herein. After the second anniversary of the date hereof, the term shall be
automatically renewed for successive one-year periods (subject to termination as
otherwise provided herein) unless either party notifies the other party in
writing prior to sixty (60) days before the expiration of the Initial Term and
each annual renewal thereof, as applicable.

                  8. "Good Reason" means the occurrence, without Executive's
express written consent, of any one or more of the following events:

                           (a) a reduction in the annual base salary of
                  Executive;

                           (b) the removal or suspension from office without
                  cause of Executive or failure without cause to elect or
                  appoint Executive as Executive Vice President of the Company
                  throughout the Employment Term;

                           (c) any substantial alteration, including any
                  material diminution, in the nature or status of Executive's
                  responsibilities as Executive Vice President, which
                  substantial alteration is not remedied or cured as
                  contemplated by Section B, Paragraphs 8(b) or 9(b) hereof;

                           (d) the assignment of any duties which are in any
                  significant respect inconsistent with Executive's status as
                  Executive Vice President of the Company, which inconsistent
                  assignment is not remedied or cured as contemplated by Section
                  B, Paragraphs 8(b) or 9(b) hereof; and

                           (e) the relocation of Executive's office to more than
                  50 miles from West Conshohocken, Pennsylvania.

                  9. "Involuntary Termination" means the breach by the Company
of any material provision of this Agreement and such breach continues for a
period of 30 days after the Company receives written notice of such breach.

                  10. "Noncompetition Period" means the period beginning on the
date of the termination of the Employment Term, for whatever reason, and ending
one year from the date of such termination.

                  11. "Notice of Termination" means a notice given by the
Company or Executive, as applicable, which shall indicate the specific
termination provision in this

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Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive's
employment under the provisions so indicated.

                  12. "Office or Industrial Property" means any Property that is
used in whole or in part for office or industrial space or office or
industrial-related purposes, whether in fee or leasehold, together with all
improvements and fixtures now or hereafter located thereon, all rights,
privileges and easements appurtenant thereto, and all tangible and intangible
personal property used in connection therewith.

                  13. "Office or Industrial Property Construction" means the
construction, renovation or repair of improvements on an Office or Industrial
Property by Executive or an Affiliate of Executive.

                  14. "Office or Industrial Property Entitlements" means
engaging in the process by which a person with an interest in an Office or
Industrial Property obtains necessary or desirable governmental approvals,
licenses, permits, entitlements or agreements for the commencement of Office or
Industrial Property Construction.

                  15. "Office or Industrial Property Management and Operation"
means engaging in directly or through an Affiliate, or being employed by any
entity undertaking, or otherwise undertaking the day-to-day management and
operation of an Office or Industrial Property, whether pursuant to a master
lease, management agreement or any other arrangement.

                  16. "Property" means any real property or any interest
therein.

                  17. "Severance Amount" means an amount equal to the sum of (A)
Executive's annual base salary as of the Termination Date and (B) Executive's
Annual Bonus for the fiscal year preceding the Termination Year.

                  18. "Speculation" means engaging in the activity of
soliciting, seeking to acquire, obtaining an option or a first right of refusal
to acquire, or acquiring, any interest in an Office or Industrial Property with
the intention at any time of acquiring (or obtaining an option or a first right
of refusal to acquire) or holding an Office or Industrial Property for
subsequent sale or other transfer to any person for purposes of Competitive
Activity.

                  19. "Termination Date" means the date of termination of
Executive's employment by the Company during the Employment Term.

                  20. "Termination With Cause" means the termination of
Executive's employment by the Company for any of the following reasons:

                           (a) any material breach of this Agreement, consisting
                  of any gross or willful refusal, failure or neglect by
                  Executive in connection with the performance of his duties and
                  fulfillment of his obligations under this Agreement;

                           (b) (i) conduct by Executive that would result in
                  material injury to the reputation of the Company if he were
                  retained in his position with the Company, including (A)
                  conviction of (or pleading nolo contendere to) a felony under
                  the laws of the United States or any State thereof or of an
                  equivalent crime under the laws of any other jurisdiction, (B)
                  commission of a crime of (1) moral turpitude, (2) dishonesty,
                  (3)

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                  breach of trust or (4) unethical business conduct, or (C)
                  bankruptcy, insolvency or general assignment for the benefit
                  of his creditors, or (ii) commission of any crime involving
                  the Company;

                           (c) any failure to comply substantially with any
                  written rules, regulations, policies or procedures of the
                  Company, if such non-compliance could be expected to have a
                  material and adverse effect on the Company's business, which
                  has not been cured within 14 days after notice thereof; or

                           (d) any failure to comply with the Company's internal
                  policies regarding insider trading or insider dealing which
                  has not been cured within 14 days after notice thereof.

                  21. "Termination Without Cause" means the termination of
Executive's employment (i) by the Company for any reason other than Termination
With Cause, or (ii) by Executive for Good Reason.

                  22. "Termination Year" means the fiscal year in which the
Termination Date occurs.

                  23. "Voluntary Termination" means Executive's voluntary
termination of his employment hereunder (which does not include termination for
Good Reason), which may be effected by Executive's giving the Company 60 days'
written notice of Executive's desire to terminate his employment.

                  B. THE EMPLOYMENT RELATIONSHIP.

                  1. EMPLOYMENT. The Company shall employ Executive, and
Executive agrees to be so employed, in the capacity of Executive Vice President
of the Company to serve for the Employment Term, subject to earlier termination
as herein provided.

                  2. SERVICES. Executive shall devote substantially all of his
working time, attention and effort to the Company's affairs. Specifically,
Executive shall have such duties and responsibilities as assigned by his
supervising officer. Executive shall report to the President, Chief Operating
Officer or Chief Financial Officer of the Company, as directed by the Company.

                  3. COMPENSATION. (a) The Company initially shall pay Executive
for his services an annual base salary of $215,000.00, in equal installments not
less frequently than bi-weekly, subject to any increases in base compensation as
approved by the Compensation Committee of the Board (the "Compensation
Committee"). Executive's annual salary shall be reviewed at least once each year
after the date hereof, and may be increased (but not decreased) at any time and
from time to time by action of the Board or any committee thereof or any
individual having authority to take such action in accordance with the Company's
regular practices.

                  (b) During the Employment Term, in addition to the annual base
salary, Executive shall be eligible to receive, in the discretion of the
Company, an annual bonus ("Annual Bonus"). Each Annual Bonus payable under this
Section B, Paragraph 3(b) shall be payable to Executive during the first quarter
of each calendar year to follow the year for which the Annual Bonus is paid and
in accordance with the Company's customary procedures for payment of executive
bonuses.

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                  (c) In addition, the Company may from time to time pay
Executive such compensation or benefits as the Compensation Committee may, in
its discretion, award to Executive under any compensation, bonus, stock
purchase, stock option, profit sharing or other employee benefit plan that may
hereafter be adopted (any such compensation is referred to as "Incentive
Compensation"). Executive's Incentive Compensation will be consistent with the
Incentive Compensation available to other similarly situated senior executives
of the Company.

                  4. BENEFITS. The Company agrees to provide Executive with the
following benefits during the Employment Term:

                           (a) VACATION. Executive shall be entitled each year
                  to a paid vacation in accordance with the practices of the
                  Company.

                           (b) EMPLOYEE BENEFITS. Executive shall be entitled to
                  all rights, benefits and privileges to which other management
                  level employees of the Company are entitled, including, but
                  not limited to, any retirement, pension, profit sharing,
                  insurance, hospital or other plans which may now be in effect
                  or which may hereafter be adopted by the Company.

                           (c) LIFE INSURANCE. During the Employment Term, the
                  Company shall provide Executive with and shall pay the
                  premiums on a life insurance policy that, when payable, will
                  provide for a death benefit of $1,000,000. The beneficiary of
                  the policy shall be the estate of Executive or such other
                  beneficiary as may be selected by Executive.

                           (d) DISABILITY. During the Employment Term, the
                  Company shall provide Executive with (or shall pay the
                  premiums on) a supplemental disability program that, when
                  payable, will provide for a maximum benefit of 50% of
                  Executive's then annual salary plus Annual Bonus for the most
                  recently completed year, with payments to cease in accordance
                  with the terms of the program.

                           (e) AUTO ALLOWANCE. During the Employment Term, the
                  Company shall provide Executive with an automobile allowance
                  of $500.00 per month.

                  5. EXPENSES. The Company recognizes that Executive will have
to incur certain out-of-pocket expenses, including, but not limited to, travel
expenses, related to his services and the Company's business, and the Company
agrees to reimburse Executive for all reasonable expenses necessarily incurred
by him in the performance of his duties upon presentation of a voucher or
documentation reasonably acceptable to the Company indicating the amount and
business purposes of any such expenses.

                  6. TERMINATION WITH CAUSE; VOLUNTARY TERMINATION. The Company
may terminate this Agreement upon a determination that an event has occurred
within the definition of Termination With Cause; provided, however, in the case
of a Termination With Cause based upon clauses (a) or (b) of such definition,
the Company shall provide Executive written notice of such grounds for
termination. If Executive shall suffer Termination With Cause or shall cease
being an employee of the Company on account of a Voluntary Termination, then:

                  (i) the Company shall pay Executive a lump sum equal to any
                  annual salary and other benefits earned and accrued under this
                  Agreement prior to the

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                  Termination Date (and reimbursement under this Agreement for
                  expenses incurred prior to the Termination Date);

                  (ii) any continued rights and benefits that Executive may have
                  under employee benefit plans and programs of the Company upon
                  such a termination shall be determined in accordance with the
                  terms and provisions of such plans and programs; and

                  (iii) Executive shall have no further rights to any other
                  compensation or benefits hereunder or granted hereunder on or
                  after the termination of employment, or any other rights
                  hereunder, and, in particular but without limitation of the
                  foregoing, Executive shall not be entitled to any Annual Bonus
                  or Incentive Compensation for all or any part of the
                  Termination Year, notwithstanding anything to the contrary set
                  forth in Section B, Paragraphs 3(b) and 3(c).

                  7. TERMINATION UPON DEATH OR DISABILITY. This Agreement shall
terminate automatically upon Executive's death. This Agreement may be terminated
by the Company during the Employment Term in case of Executive's permanent
disability (defined as physical or mental inability, confirmed by a licensed
physician, to perform substantially all of the services described herein that
continues for a period of 180 consecutive or non-consecutive days in any 365-day
period). Upon death or termination of employment by virtue of disability during
the Employment Term:

                  (i) the Company shall pay Executive (or Executive's estate or
                  beneficiaries in the case of death of Executive) a lump sum
                  equal to any annual salary and other benefits earned and
                  accrued under this Agreement prior to the Termination Date
                  (and reimbursement under this Agreement for expenses incurred
                  prior to the Termination Date);

                  (ii) the Company shall pay Executive (or Executive's estate or
                  beneficiaries in the case of death of Executive) an amount
                  equal to the target Annual Bonus for the Termination Year
                  multiplied by a fraction, the numerator of which is the number
                  of days elapsed in the Termination Year through the
                  Termination Date and the denominator of which is the number of
                  days in the Termination Year;

                  (iii) all outstanding unvested stock options, restricted stock
                  and other unvested equity-type interests shall vest and shall
                  otherwise be exercisable for the greater of (1) one year after
                  the effective date of such termination or (2) in accordance
                  with their terms (provided, however, that the Board, in its
                  sole discretion, may extend such exercise period, forgive any
                  authorized loan previously made to Executive to purchase any
                  such stock, and/or modify any of the other terms and
                  conditions of any such stock option, stock award or other
                  equity-type award programs, on terms no less favorable to
                  Executive than those provided for herein);

                  (iv) any continued rights and benefits that Executive, or
                  Executive's estate or other legal representatives, may have
                  under employee benefit plans and programs of the Company upon
                  such death or disability shall be determined in accordance
                  with the terms and provisions of such plans and programs; and

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                  (v) Executive shall have no further rights to any other
                  compensation or benefits hereunder or granted hereunder on or
                  after the termination of employment, or any other rights
                  hereunder.

                  8. INVOLUNTARY TERMINATION OR TERMINATION WITHOUT CAUSE. (a)
If Executive shall suffer an Involuntary Termination or a Termination Without
Cause, then:

                  (i) the Company shall pay Executive a lump sum equal to any
                  annual salary and other benefits earned and accrued under this
                  Agreement prior to the Termination Date (and reimbursement
                  under this Agreement for expenses incurred prior to the
                  Termination Date);

                  (ii) the Company shall pay Executive an amount equal to the
                  target Annual Bonus for the Termination Year multiplied by a
                  fraction, the numerator of which is the number of days elapsed
                  in the Termination Year through the Termination Date and the
                  denominator of which is the number of days in the Termination
                  Year;

                  (iii) the Company shall pay Executive an amount equal to the
                  Severance Amount;

                  (iv) all outstanding unvested stock options, restricted stock
                  and other unvested equity-type interests shall vest and shall
                  otherwise be exercisable for the greater of (1) one year after
                  the effective date of such termination or (2) in accordance
                  with their terms (provided, however, that the Board, in its
                  sole discretion, may extend such exercise period, forgive any
                  authorized loan previously made to Executive to purchase any
                  such stock, and/or modify any of the other terms and
                  conditions of any such stock option, stock award or other
                  equity-type award programs, on terms no less favorable to
                  Executive than those provided for herein);

                  (v) the Company shall continue to provide Executive, for the
                  longer of one year or the remainder of the Employment Term,
                  with the level of health/medical insurance or coverage
                  provided to Executive at the time of such termination; it
                  being expressly understood and agreed that nothing in this
                  clause (v) shall restrict the ability of the Company to amend
                  or terminate such plans and programs from time to time in its
                  sole discretion; provided, however, that the Company shall in
                  no event be required to provide any coverage after such time
                  as Executive becomes entitled to receive benefits of the same
                  type from another employer or recipient of Executive's
                  services (and provided, further, that such entitlement shall
                  be determined without regard to any individual waivers or
                  other similar arrangements);

                  (vi) any continued rights and benefits that Executive may have
                  under employee benefit plans and programs of the Company upon
                  such termination shall be determined in accordance with the
                  terms and provisions of such plans and programs; and

                  (vii) Executive shall have no further rights to any other
                  compensation or benefits hereunder or granted hereunder on or
                  after the termination of employment, or any other rights
                  hereunder.

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                  (b) Notwithstanding the foregoing, (i) neither Good Reason nor
grounds for Involuntary Termination shall be deemed to exist unless a Notice of
Termination on account thereof (specifying a termination date no less than 14
days and no more than 21 days from the date of such notice) is given no later
than 90 days after the time at which the event or condition purportedly giving
rise to Good Reason or the Involuntary Termination first occurs or arises; and
(ii) if there exists (without regard to this clause (ii)) an event or condition
that constitutes Good Reason or grounds for Involuntary Termination, the Company
shall have 30 days from the date such Notice of Termination is given to remedy
or cure such event or condition and, if the Company does so, such event or
condition shall not constitute Good Reason or grounds for Involuntary
Termination, respectively, hereunder.

                  9. TERMINATION UPON A CHANGE IN CONTROL. (a) If, within the
two-year period following a Change in Control, Executive shall suffer an
Involuntary Termination or a Termination Without Cause, then:

                  (i) the Company shall pay Executive a lump sum equal to any
                  annual salary and other benefits earned and accrued under this
                  Agreement prior to the Termination Date (and reimbursement
                  under this Agreement for expenses incurred prior to the
                  Termination Date);

                  (ii) the Company shall pay Executive an amount equal to the
                  target Annual Bonus for the Termination Year multiplied by a
                  fraction, the numerator of which is the number of days elapsed
                  in the Termination Year through the Termination Date and the
                  denominator of which is the number of days in the Termination
                  Year;

                  (iii) the Company shall pay Executive an amount equal to two
                  times the Change-in-Control Severance Amount;

                  (iv) all outstanding unvested stock options, restricted stock
                  and other unvested equity-type interests shall vest and shall
                  otherwise be exercisable for the greater of (1) one year after
                  the effective date of such termination or (2) in accordance
                  with their terms (provided, however, that the Board, in its
                  sole discretion, may extend such exercise period, and/or
                  modify any of the other terms and conditions of any such stock
                  option, stock award or other equity-type award programs, on
                  terms no less favorable to Executive than those provided for
                  herein);

                  (v) the Company shall forgive any and all outstanding balances
                  on loans made by the Company to Executive to purchase the
                  Company's stock (provided, however, that as a condition
                  precedent to the Company's obligation to forgive such loans,
                  the Company may withhold from other amounts payable to
                  Executive, or require Executive to pay to the Company, the
                  amount the Company in good faith deems necessary to satisfy
                  the Company's obligation to withhold federal, state or local
                  income or other taxes incurred by reason of such forgiveness
                  of loans);

                  (vi) the Company shall continue to provide Executive, for
                  three years from the date of termination, with the level of
                  health/medical insurance or coverage provided to Executive at
                  the time of such termination; it being expressly

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                  understood and agreed that nothing in this clause (vi) shall
                  restrict the ability of the Company to amend or terminate such
                  plans and programs from time to time in its sole discretion;
                  provided, however, that the Company shall in no event be
                  required to provide any coverage after such time as Executive
                  becomes entitled to receive benefits of the same type from
                  another employer or recipient of Executive's services (and
                  provided, further, that such entitlement shall be determined
                  without regard to any individual waivers or other similar
                  arrangements);

                  (vii) any continued rights and benefits that Executive may
                  have under employee benefit plans and programs of the Company
                  upon such termination shall be determined in accordance with
                  the terms and provisions of such plans and programs; and

                  (viii) Executive shall have no further rights to any other
                  compensation or benefits hereunder or granted hereunder on or
                  after the termination of employment, or any other rights
                  hereunder.

                  (b) Notwithstanding the foregoing, (i) neither Good Reason nor
grounds for Involuntary Termination shall be deemed to exist unless a Notice of
Termination on account thereof (specifying a termination date no less than 14
days and no more than 21 days from the date of such notice) is given no later
than 90 days after the time at which the event or condition purportedly giving
rise to Good Reason or the Involuntary Termination first occurs or arises; and
(ii) if there exists (without regard to this clause (ii)) an event or condition
that constitutes Good Reason or grounds for Involuntary Termination, the Company
shall have 30 days from the date such Notice of Termination is given to remedy
or cure such event or condition and, if the Company does so, such event or
condition shall not constitute Good Reason or grounds for Involuntary
Termination, respectively, hereunder.

                  10. INDEMNIFICATION. The Company agrees that during the
Employment Term, provisions of the Company's bylaws regarding indemnification
and advancement of expenses of officers and trustees shall not be amended to
adversely affect Executive nor shall the Company's articles of incorporation be
amended to adversely affect Executive's rights with respect to limitation of
liability, indemnification or advancement of expenses.

                  11. CONFIDENTIAL INFORMATION. During the Employment Term, and
all periods thereafter, Executive shall keep secret and retain in strictest
confidence, and shall not use for his benefit or the benefit of others, except
in connection with the business and affairs of the Company and its Affiliates,
all confidential matters relating to the Company's business and the business of
any of its Affiliates, learned by Executive heretofore or hereafter directly or
indirectly from the Company or any of its Affiliates (the "Confidential Company
Information"), including, without limitation, information with respect to (i)
sales figures (whether per property or otherwise), (ii) profit or loss figures
(whether per property or otherwise), and (iii) customers, clients, tenants, and
customer lists; and shall not disclose such Confidential Company Information to
anyone outside of the Company except with the Company's express written consent
and except for Confidential Company Information which is at the time of receipt
or thereafter becomes publicly known through no wrongful act of Executive's or
is received from a third party not under an obligation to keep such information
confidential and without breach of this Agreement.

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                  12. RETURN OF PROPERTY. All memoranda, notes, lists, records,
property and any other tangible product and documents (and all copies thereof),
whether visually perceptible, machine-readable or otherwise, made, produced or
compiled by Executive or made available to Executive concerning the business of
the Company or its Affiliates, (i) shall at all times be the property of the
Company (and, as applicable, any Affiliates) and shall be delivered to the
Company at any time upon its request, and (ii) upon Executive's termination of
employment, shall be immediately returned to the Company; provided, however,
that Executive may retain a copy of his "rolodex" (or other similar record of
names and addresses) maintained from time to time in the ordinary course.

                  C. AGREEMENT NOT TO COMPETE

                  Except as explicitly provided herein, Executive agrees, for
the entire Employment Term and Noncompetition Period, to the following
covenants, effective within the United States:

                  1. COMPETITIVE ACTIVITY RESTRICTION. Executive, personally or
through any Affiliate of Executive, shall not conduct any Competitive Activity
other than through the Company, without the prior written consent of the
Company. Notwithstanding any other provision of this Agreement, and without
limiting any obligations to the Company that Executive may have without regard
hereto, Executive agrees that, during the time he is employed by the Company,
Executive shall present to the Company all opportunities that arise to engage in
Competitive Activities unless Executive reasonably determines that such
opportunities are not appropriate for the Company.

                  2. NO BENEFICIAL OWNERSHIP. Executive shall not beneficially
own directly or indirectly any beneficial interest in any entity engaged in any
Competitive Activity other than the Company, except for any interest in a
company traded on a nationally recognized public securities exchange (including
The Nasdaq National Market), provided such interest does not exceed 5% of the
outstanding capital stock of such company.

                  3. LOANS. Executive shall not directly or indirectly make any
loan to, or hold any note evidencing a loan from, any entity engaged in any
Competitive Activity.

                  4. COMPETITIVE ENTITY. Executive shall not be a director or
trustee, partner, officer, principal, agent or employee of, or consultant to
(whether for compensation or not), or work in any other capacity for, any entity
engaged in any Competitive Activity; provided, however, that after Executive
ceases to be employed by the Company, Executive may work as a broker for a real
estate brokerage company which acts as a broker in transactions involving fee or
leasehold interests in Office or Industrial Property.

                  5. NOTIFICATION TO COMPANY. If Executive or any Affiliate of
Executive desires to engage in any Competitive Activity, Executive shall
describe fully the proposed activity in a written notice (the "Disclosure
Notice") to the Company. A Disclosure Notice shall only pertain to a specific
proposed project and the referenced proposed project shall be described therein
with specificity as to timing, location, scope and the extent of Executive's
involvement, financially and in terms of his time commitment. A Disclosure
Notice may not request approval for any conceptual or non-project specific
activity or for any activity that is prohibited by this Agreement.

                                       11
<PAGE>

                  6. NO INTERFERENCE OR SOLICITATION. Notwithstanding any other
provision of this Agreement, during the Noncompetition Period, Executive shall
not directly or indirectly (i) solicit or endeavor to entice away any existing
client of the Company or any potential client of the Company whom the Company
was actively soliciting during the time of Executive's Employment Term, or any
person who during the Employment Term or the one-year period which follows the
expiration of the Employment Term was or is a client of the Company, or (ii)
hire, solicit or otherwise encourage any employee or independent contractor of
the Company to leave the employment of, or terminate any contractual
relationship with, the Company, or (iii) hire any employee or independent
contractor who has left the employment or other service of the Company or any of
its Affiliates within the six-month period which follows the termination of such
employee's or independent contractor's employment or other service with the
Company and its Affiliates, or (iv) otherwise knowingly interfere with, disrupt
or attempt to disrupt the relationships, contractual or otherwise, between the
Company and its employees or independent contractors or solicit or encourage any
employee or independent contractor of the Company to engage in any Competitive
Activity.

                  D. MISCELLANEOUS PROVISIONS.

                  1. NOTICES. All notices or deliveries authorized or required
pursuant to this Agreement shall be deemed to have been given when in writing
and when (i) deposited in the U.S. mail, certified, return receipt requested,
postage prepaid, or (ii) otherwise delivered by hand or by overnight delivery,
against written receipt, by a common carrier or commercial courier or delivery
service addressed to the parties at the following addresses or to such other
addresses as either may designate in writing to the other party:

                  To the Company:     Keystone Property Trust
                                      200 Four Falls Corporate Center, Suite 208
                                      West Conshohocken, PA  19428
                                      Attention: General Counsel
                                      Telephone: (484) 530-1825
                                      Facsimile: (484) 530-0131

                  To Executive:       John B. Begier, addressed to the
                                      address set forth on the signature page
                                      of this Agreement.

                  2. ENTIRE AGREEMENT. This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter
hereof and shall not be modified in any manner except by written instrument
signed by or on behalf of the parties hereto. This Agreement shall be binding
upon and inure to the benefit of the heirs, successors and assigns of the
parties hereto.

                  3. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA.

                  4. ASSIGNMENT. Executive acknowledges that his services are
unique and personal. Executive may not assign his rights or delegate his duties
or obligations under this Agreement except (a) his rights to compensation and
benefits hereunder may be transferred by

                                       12
<PAGE>

will or operation of law and (b) his rights under employee benefit plans or
programs described in Section B, Paragraphs 4(b, c and d) may be assigned or
transferred in accordance with the terms of such plans or programs, or regular
practices thereunder. Executive's rights and obligations under this Agreement
shall inure to the benefit of and shall be binding upon Executive's heirs and
personal representatives.

                  5. WITHHOLDING. The Company shall be entitled to withhold from
any payments or deemed payments any amount of tax withholding required by law.

                  6. TITLES AND HEADINGS. Titles and headings to sections and
paragraphs in this Agreement are inserted for the convenience of reference only
and are not intended to be a part of or to affect the meaning or interpretation
of this Agreement.

                  7. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

                  8. AMENDMENTS. No amendment, modification, waiver or
supplement to this Agreement shall be binding on any of the parties hereto
unless it is in writing and signed by the parties in interest at the time of the
modification. No delay on the part of any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof, nor shall any waiver
on the part of any party of any such right, power or privilege nor any single or
partial exercise of any such right, power or privilege, preclude any other or
further exercise thereof or the exercise of any other such right, power or
privilege.

                  9. NO THIRD-PARTY BENEFICIARIES. This Agreement is solely for
the benefit of the parties to this Agreement and should not be deemed to confer
upon third parties any remedy, claim, liability, reimbursement, claims or action
or other right in excess of those existing without reference to this Agreement.

                  10. MAXIMUM LEGAL ENFORCEABILITY; TIME OF ESSENCE. Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. Without prejudice to any rights or remedies otherwise available to
any party to this Agreement, each party hereto acknowledges that damages would
not be an adequate remedy for any breach of the provisions of this Agreement and
agrees that the obligations of the parties hereunder shall be specifically
enforceable. Time shall be of the essence as to each and every provision of this
Agreement.

                  11. SPECIFIC PERFORMANCE. (a) Executive acknowledges that the
obligations undertaken by him pursuant to this Agreement are unique and that the
Company will not have an adequate remedy at law if he shall fail to perform any
of his obligations hereunder, and Executive therefore confirms that the
Company's right to specific performance of the terms of Section C of this
Agreement is essential to protect the rights, interest and goodwill of the
Company. Accordingly, in addition to any other remedies that the Company may
have at law or in equity, the Company shall have the right to have all
obligations, covenants, agreements and other provisions of Section C of this
Agreement specifically performed by Executive, and the

                                       13
<PAGE>

Company shall have the right to obtain preliminary and permanent injunctive
relief to secure specific performance and to prevent a breach or contemplated
breach of Section C of this Agreement by Executive. Executive acknowledges that
the Company will have the right to have the provisions of Section C of this
Agreement enforced in any court of competent jurisdiction, it being agreed that
any breach or threatened breach of Section C of this Agreement would cause
irreparable injury to the Company and its business and that money damages would
not provide an adequate remedy to the Company.

                  (b) Any controversy or claim arising out of or relating to
this Agreement or the breach of this Agreement that is not resolved by Executive
and the Company (or its Affiliates, where applicable), other than controversies
or claims arising under Section C, to the extent necessary for the Company (or
its Affiliates, where applicable) to avail itself of the rights and remedies
provided under Section D, Paragraph 11(a) hereof, shall be submitted to
arbitration in Philadelphia, Pennsylvania in accordance with Pennsylvania law
and the procedures of the American Arbitration Association. The determination of
the arbitrator(s) shall be conclusive and binding on the Company (or its
Affiliates, where applicable) and Executive and judgment may be entered on the
arbitrator(s)' award in any court having jurisdiction.

                  12. SURVIVAL. Anything contained in this Agreement to the
contrary notwithstanding, the provisions of Section C hereof, Section D,
Paragraphs 5 and 11 hereof, and the other provisions of this Section D (to the
extent necessary to effectuate the survival of Section C and Section D,
Paragraphs 5 and 11), shall survive termination of this Agreement and any
termination of Executive's employment hereunder.

                  13. OPERATIONS OF AFFILIATED PARTIES. Executive agrees that he
will refrain from authorizing any Affiliate to perform any activities that would
be prohibited by the terms of this Agreement if they were performed by him.
Notwithstanding anything to the contrary contained in this Agreement, Executive
shall not be required by the terms of this Agreement to violate any fiduciary
duty existing on the date hereof that he owes to a third party.

                  14. EXISTING AGREEMENTS. Executive represents to the Company
that he is not subject or a party to any employment or consulting agreement,
non-competition covenant or other agreement, covenant or understanding which
might prohibit him from executing this Agreement or limit his ability to fulfill
his responsibilities hereunder.

                                       14
<PAGE>

                  15. FURTHER ASSURANCES. The parties to this Agreement will
execute and deliver or cause the execution and delivery of such further
instruments and documents and will take such other actions as any other party to
the Agreement may reasonably request in order to effectuate the purpose of this
Agreement and to carry out the terms hereof.

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first written above.

                                            KEYSTONE PROPERTY TRUST

                                            BY: /s/ JEFFREY E. KELTER
                                            ------------------------------------
                                            Name:  Jeffrey E. Kelter
                                            Title: President

                                            /s/ JOHN B. BEGIER
                                            ------------------------------------
                                            Name: John B. Begier

Address and other contact information for
John B. Begier as of the date hereof

200 Four Falls Corporate Center,
Suite 208
West Conshohocken, PA 19428

                                       15<PAGE>

                                           EXHIBIT 10.2

                   AMERICAN REAL ESTATE INVESTMENT CORPORATION

                       1994 NON-EMPLOYEE STOCK OPTION PLAN

                        ADOPTED EFFECTIVE AUGUST 31, 1994

1.       PURPOSE.

         (a) The purpose of the 1994 Non-Employee Stock Option Plan (the
"Plan") is to provide a means by which each director or consultant to
American Real Estate Investment Corporation, a Maryland corporation (the
"Company"), who is not otherwise an employee of the Company or of any
Affiliate of the Company (each such person being hereafter referred to as a
"Non-Employee") will be given an opportunity to purchase stock of the Company.

         (b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company as those terms are
defined in Sections 424(e) and (f), respectively, of the Internal Revenue
Code of 1986, as amended (the "Code") and any partnership of which the
Company is a general or managing partner.

         (c) The Company, by means of the Plan, seeks to retain the services
of persons now serving as Non-Employee Directors of the Company, to secure
and retain the services of persons capable of serving in such capacity and as
consultants to the Company, and to provide incentives for such persons to
exert maximum efforts for the success of the Company.

         (d) The Company intends that the options issued under the Plan not
be incentive stock options as that term is used in Section 422 of the Code.

2.       ADMINISTRATION.

         (a) The Plan shall be administered by the Board of Directors of the
Company (the "Board") unless and until the Board delegates administration to
a committee, as provided in subparagraph 2(c).

         (b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan.

                   (1) To construe and interpret the Plan and options granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any option agreement, in
a manner and to the extent it shall deem necessary or expedient to make the
Plan fully effective.

                  (2) To amend the Plan as provided in paragraph 10.

<PAGE>

                  (3) Generally, to exercise such powers and to perform such
acts as the Board deems necessary or expedient to promote the best interests
of the Company.

         (c) The Board may delegate administration of the Plan to a committee
composed of not fewer than three (3) members of the Board (the "Committee").
If administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore
possessed by the Board, subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board. The Board may abolish the Committee at any time and revest
in the Board the administration of the Plan.

3.       SHARES SUBJECT TO THE PLAN.

         (a) Subject to the provisions of paragraph 9 relating to adjustments
upon changes in stock, the stock that may be sold pursuant to options granted
under the Plan shall not exceed in the aggregate one-hundred-fifty thousand
(150,000) shares of the Company's Common Stock. If any option granted under
the Plan shall for any reason expire or otherwise terminate without having
been exercised in full, the stock not purchased under such option shall
revert to and again become available for issuance pursuant to exercises of
options granted under the Plan.

         (b) The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.

4.       ELIGIBILITY.

         Options shall be granted only to Non-Employee Directors of the
Company or consultants to the Company.

5.       OPTION PROVISIONS.

         Each option shall contain the following terms and conditions:

         (a) No option shall be exercisable after the expiration of ten (10)
years from the date it was granted.

         (b) The exercise price of each option shall not be less than one
hundred percent (100%) of the fair market value on the Grant Date of the
stock subject to such option.

         (c) The purchase price of stock acquired pursuant to an option shall
be paid, to the extent permitted by applicable statutes and regulations,
either (1) in cash at the time the option is exercised, or (2) by delivery to
the Company of shares of the Company's Common Stock that have been held for
the requisite period necessary to avoid a charge to the Company's reported
earnings and valued at the fair market value on the date of exercise, or (3)
by a combination of such methods of payment.

                                       2
<PAGE>

         (d) An option shall not be transferable except by will or by the
laws of descent and distribution, and shall be exercisable during the
lifetime of the person to whom the option is granted only by such person or
by his or her guardian or legal representative.

         (e) An option shall be exercisable at such time or times as may be
determined by the Board at the time of grant, provided, however, with respect
to options granted to Directors, any unexercised portion of an option granted
under the Plan shall terminate thirty (30) days after the date the Director
is no longer a Director of the Company.

         (f) The Company may require any optionee, or any person to whom an
option is transferred under subparagraph 5(d), as a condition of exercising
any such option: (1) to give written assurances satisfactory to the Company
as to the optionee's knowledge and experience in financial and business
matters and/or to employ a purchaser representative reasonably satisfactory
to the Company who is knowledgeable and experienced in financial and business
matters, and that he or she is capable of evaluating, alone or together with
the purchaser representative, the merits and risks of exercising the option;
and (2) to give written assurances satisfactory to the Company stating that
such person is acquiring the stock subject to the option for such person's
own account and not with any present intention of selling or otherwise
distributing the stock. These requirements, and any assurances given pursuant
to such requirements, shall be inoperative if (i) the issuance of the shares
upon the exercise of the option has been registered under a then-currently
effective registration statement under the Securities Act of 1933, as amended
(the "Securities Act"), or (ii), as to any particular requirements, a
determination is made by counsel for the Company that such requirements need
not be met in the circumstances under the then-applicable securities laws.

         (g) Notwithstanding anything to the contrary contained herein, an
option may not be exercised unless the shares issuable upon exercise of such
option are then registered under the Securities Act or, if such shares are
not then so registered, the Company has determined that such exercise and
issuance would be exempt from the registration requirements of the Securities
Act.

6.       COVENANTS OF THE COMPANY.

         (a) During the terms of the options granted under the Plan, the
Company shall keep available at all times the number of shares of stock
required to satisfy such options.

         (b) The Company shall seek to obtain from each regulatory commission
or agency having jurisdiction over the Plan such authority as may be required
to issue and sell shares of stock upon exercise of the options granted under
the Plan; provided, however, that this undertaking shall not require the
Company to register under the Securities Act either the Plan, any option
granted under the Plan, or any stock issued or issuable pursuant to any such
option. If, after reasonable efforts, the Company is unable to obtain from
any such regulatory commission or agency the authority which counsel for the
Company deems necessary for the lawful issuance and sale of stock under the
Plan, the Company shall be relieved from any liability for failure to issue
and sell stock upon exercise of such options.

                                       3
<PAGE>

7.       USE OF PROCEEDS FROM STOCK.

         Proceeds from the sale of stock pursuant to options granted under
the Plan shall constitute general funds of the Company.

8.       MISCELLANEOUS.

         (a) Neither an optionee nor any person to whom an option is
transferred under subparagraph 5(d) shall be deemed to be the holder of, or
to have any of the rights of a holder with respect to, any shares subject to
such option unless and until such person has satisfied all requirements for
exercise of the option pursuant to its terms.

         (b) Nothing in the Plan or in any instrument executed pursuant
thereto shall confer upon any Non-Employee any right to continue in the
service of the Company or any Affiliate or shall affect any right of the
Company, its Board or stockholders or any Affiliate to terminate the service
of any Non-Employee with or without cause.

         (c) No Non-Employee individually or as a member of a group, and no
beneficiary or other person claiming under or through him, shall have any
right, title or interest in or to any option reserved for the purposes of the
Plan except as to such shares of Common Stock, if any, as shall have been
reserved for him pursuant to an option granted to him.

         (d) In connection with each option made pursuant to the Plan, it
shall be a condition precedent to the Company's obligation to issue or
transfer shares to a Non-Employee, or an affiliate of such Non-Employee, or
to evidence the removal of any restrictions on transfer, that such
Non-Employee make arrangements satisfactory to the Company to insure that the
amount of any federal or other withholding tax required to be withheld with
respect to such sale or transfer, or such removal or lapse, is made available
to the Company for timely payment of such tax.

9.       ADJUSTMENTS UPON CHANGES IN STOCK.

         (a) If any change is made in the stock subject to the Plan, or
subject to any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange
of shares, change in corporate structure or otherwise), the Plan and
outstanding options will be appropriately adjusted in the class(es) and
maximum number of shares subject to the Plan and the class(es) and number of
shares and price per share of stock subject to outstanding options.

                                       4
<PAGE>

         (b) In the event of: (1) a dissolution or liquidation of the
Company; (2) a merger or consolidation in which the Company is not the
surviving corporation; (3) a reverse merger in which the Company is the
surviving corporation but the shares of the Company's Common Stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise; or (4) any other capital reorganization in which more than fifty
percent (50%) of the shares of the Company entitled to vote are exchanged,
then, at the sole discretion of the Board and to the extent permitted by
applicable law; (i) any surviving corporation shall assume any options
outstanding under the Plan or shall substitute similar options for those
outstanding under the Plan, or (ii) the time during which such options may be
exercised shall be accelerated and the options terminated if not exercised
prior to such event, or (iii) such options shall continue in full force and
effect.

10.      AMENDMENT OF THE PLAN.

         (a) The Board at any time, and from time to time, may amend the
Plan; provided, however, that the Board shall not amend the plan more than
once every six months, with respect to the provisions of the Plan which
relate to the amount, price and timing of grants, other than to comport with
changes in the Code, the Employee Retirement Income Security Act, or the
rules thereunder. Except as provided in paragraph 9 relating to adjustments
upon changes in stock, no amendment shall be effective unless approved by the
stockholders of the Company within twelve (12) months before or after the
adoption of the amendment, where the amendment will:

                  (1) Increase the number of shares reserved for options
under the Plan;

                  (2) Modify the requirements as to eligibility for
participation in the Plan (to the extent such modification requires
stockholder approval in order for the Plan to comply with the requirements of
Rule 16b-3 promulgated under the Exchange Act); or

                  (3) Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to comply with the
requirements of Rule 16b-3 promulgated under the Exchange Act,

         (b) Rights and obligations under any option granted before any
amendment of the Plan shall not be altered or impaired by such amendment of
the Plan unless (i) the Company requests the consent of the person to whom
the option was granted and (ii) such person consents in writing.

11.      TERMINATION OR SUSPENSION OF THE PLAN.

         (a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate on August 31, 2004. No options
may be granted under the Plan while the Plan is suspended or after it is
terminated.

         (b) Rights and obligations under any option granted while the Plan
is in effect shall not be altered or impaired by suspension or termination of
the Plan, except with the consent of the person to whom the option was
granted.

                                       5
<PAGE>

12.      EFFECTIVE DATE OF PLAN; CONDITIONS OF EXERCISE.

         (a) The Plan shall become effective upon adoption by the Board of
Directors, subject to the condition subsequent that the Plan is approved by
the stockholders of the Company.

         (b) No option granted under the Plan shall be exercised or
exercisable unless and until the condition of subparagraph 12(a) above has
been met.

                                       6

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