Morgan Stanley Real Estate announced today that it has successfully completed the closing of the third offering for its Special Situations Fund III (“Special Situations” or “the Fund”), raising an additional $2.5 billion of equity commitments,  63 percent of which came from investors located outside of the U.S.  With this closing, Morgan Stanley Real Estate has raised a total of $5.9 billion for Special Situations from institutional investors, High Net Worth individual investors and Morgan Stanley, with the latter representing 23 percent of total commitments.  

Special Situations, structured as an open-ended fund, primarily seeks to make non-controlling investments in an array of real estate securities in growth/emerging, developed and distressed markets around the world.  As of the end of 2007, Special Situations committed approximately $4.8 billion of equity, with 62 closed investments in China, Australia, India, Russia, Poland, Brazil, Mexico, the U.S., Japan and Western Europe, among other areas.  The Fund’s investment professionals form a core group with extensive collaborative experience, maintaining a team presence in each of the regions where it has invested.

Special Situations Fund III, which had an initial closing in August 2006, is the third in a series of successful real estate funds.  Special Situations Fund I, which is fully liquidated, launched in 1997 and invested primarily in the United States and Asia.  Special Situations Fund II launched in 2000 and invested solely in Europe. 

INFO SOURCES

Morgan Stanley (NYSE:MS)

FIRMS

Morgan Stanley Real Estate is comprised of three major global businesses: Investing, Banking and Lending. Since 1991, Morgan Stanley Real Estate has acquired $165.0 billion of real estate assets worldwide and currently manages $94.4 billion in real estate assets on behalf of its clients. A complete range of market-leading investment banking services for real estate clients include advice on strategy, mergers, acquisitions and restructurings, as well as underwriting public and private debt and equity financings. As a global leader in real estate lending, Morgan Stanley has offered approximately $210.9 billion of CMBS through the capital markets since 1997, including $44.9 billion in 2007. 

Morgan Stanley (NYSE:MS) is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services.  The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 33 countries. 

PEOPLE

Willem de Geus, Managing Director and Global Portfolio Manager of Special Situations

Tim Morris, Managing Director and Chief Investment Officer of Special Situations

John Carrafiell, Joint Global Head of Morgan Stanley Real Estate Investing and President of Special Situations