<ownershipDocument>
    <schemaVersion>X0201</schemaVersion>

    <documentType>3</documentType>
<periodOfReport>2004-01-06</periodOfReport>
    <noSecuritiesOwned>0</noSecuritiesOwned>

    <issuer>
        <issuerCik>0000906113</issuerCik>
        <issuerName>KEYSTONE PROPERTY TRUST</issuerName>
        <issuerTradingSymbol>KTR</issuerTradingSymbol>
</issuer>
<reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001275358</rptOwnerCik>
            <rptOwnerName>LLOYD J PETER</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>200 FOUR FALLS SUITE 208</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>WEST CONSHOHOCKEN</rptOwnerCity>
            <rptOwnerState>PA</rptOwnerState>
            <rptOwnerZipCode>19428</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
            <reportingOwnerRelationship>
<isDirector>0</isDirector>
<isOfficer>1</isOfficer>
<isTenPercentOwner>0</isTenPercentOwner>
<isOther>0</isOther>
<officerTitle>SVP-Chief Acctg. Officer </officerTitle>
<otherText></otherText>
</reportingOwnerRelationship>
</reportingOwner>
<nonDerivativeTable><nonDerivativeHolding><securityTitle><value>Common Shares</value>
</securityTitle>
<postTransactionAmounts><sharesOwnedFollowingTransaction><value>7562</value>
</sharesOwnedFollowingTransaction>
</postTransactionAmounts>
<ownershipNature><directOrIndirectOwnership><value>D</value>
</directOrIndirectOwnership>
</ownershipNature>
</nonDerivativeHolding>
</nonDerivativeTable>
<derivativeTable></derivativeTable>
<footnotes></footnotes>
<ownerSignature><signatureName>J. Peter Lloyd, by Saul A. Behar, his attorney-in-fact</signatureName>
<signatureDate>2004-01-06</signatureDate>
</ownerSignature>
</ownershipDocument>

