Morgan Stanley Real Estate's Prime Property Fund Acquires Class A Office Portfolio from The JBG Companies for $644 Million

NEW YORK--()--Oct. 3, 2005--Morgan Stanley Real Estate's Prime Property Fund(R) (PRIME) announced today that it has acquired a 1.5 million-square-foot, Class A office portfolio located in the Washington, DC metropolitan area from entities affiliated with The JBG Companies for $644 million. The portfolio is comprised of five wholly owned assets, including two development properties, and a majority interest in a sixth property.

"Office market fundamentals in the Washington, DC metro area are strong with continued space demand from a diversified economy, including both the private sector and the federal government," said Dave Hardman, Managing Director and U.S. Head of Real Estate Investing at Morgan Stanley. "The acquisition of this high-quality portfolio improves the office component of PRIME through predictable cash flows supported by long-term credit leases and a balance of stabilized and development assets."

The four existing properties, Potomac Center South and 1601 K Street in Washington, DC; 1801 North Lynn Street in Arlington, Va.; and 1 Choke Cherry Road in Rockville, Md., total 1,221,000 square feet and are 96.7% occupied. 78% of the lease revenue at these properties is attributable to the General Services Administration (GSA), the average lease duration is greater than 10 years and there are no lease expirations until 2013. The two properties under development, which will total 297,000 square feet upon completion, are 1602 L Street in Washington, DC and 950 North Glebe in Arlington, Va.

PRIME, a $3.6 billion core, discretionary, diversified real estate fund, is managed by Morgan Stanley Real Estate. PRIME's assets include office, industrial, retail, multifamily, self storage and hotel properties and are located in major real estate markets throughout the United States. Morgan Stanley Real Estate is comprised of three major global businesses: Investing, Banking, and Lending. Since 1991, Morgan Stanley has acquired more than $68.7 billion of real estate assets worldwide and currently manages $38.0 billion in real estate assets on behalf of its clients. Using its own capital, Morgan Stanley originates upwards of $11 billion in commercial mortgages annually. In addition, Morgan Stanley Real Estate provides a complete range of investment banking services including merger, acquisition and restructuring advisory and recapitalizations, as well as public and private debt and equity financing. Morgan Stanley established its real estate organization in 1969.

Morgan Stanley (NYSE: MWD) is a global financial services Firm and a market leader in securities, investment management, and credit services. With more than 600 offices in 28 countries, Morgan Stanley connects people, ideas and capital to help clients achieve their financial aspirations.

Contacts

Morgan Stanley
Media Relations
Alyson D'Ambrisi, 212-761-4649

Contacts

Morgan Stanley
Media Relations
Alyson D'Ambrisi, 212-761-4649