October 21, 2009
We were a bit ahead of the pack in reporting that Morgan Stanley would likely be taking the hit on their Crescent Real Estate deal, but the WSJ has some additional insight indicating that Morgan is in negotiations with Barclay’s, and that discussions might take them beyond the November 2nd deadline.
Investment firms without the balance sheets of large investment banks typically don’t buy property for real-estate funds until the money has been raised.
The benefit of buying before the money is in place — as Morgan Stanley did with Crescent — is that it allows investment banks to move quickly. But they risk losing investor commitments if the property they buy becomes undesirable.
Morgan Stanley has been one of the most active real-estate fund managers.
The firm announced raising at least $14 billion in 2006 and 2007 for its series of real-estate funds known as MSREF, which have taken some big hits as the property market has soured.
There is probably some additional info that can be gained from their earnings call this morning, so once we see the transcript, we’ll update with any new info.
- Round Trip For 17M SF of Property as Morgan Stanley Hands Back The Keys
- Morgan Stanley to Take Hit on Crescent
- Who Are The Largest Firms Investing Internationally For US Clients? Here’s The Top 10
- GS Whitehall Funds Down to Last $30M … From $1.8B!
- More News About Morgan Stanley’s SF Woes