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GlobeSt.com UPDATE: Lend Lease Sells US Real Estate Holdings to Morgan Stanley

NEW YORK CITY-Morgan Stanley will add $13 billion in property assets to its portfolio with the acquisition of most of Lend Lease Corp.'s US real estate investment groups. Last month, the Sydney-based Lend Lease announced it would be exiting the US arena over time.

By Barbara Jarvie | Updated on June 17, 2003

NEW YORK CITY-Morgan Stanley intends to buy most of Lend Lease Corp.’s US real estate investment business, adding about $13 billion in property assets under management. The New York-based investment bank, which did not disclose terms of the transaction, says it expects to have more than $30 billion of real estate assets under management when the deal is completed. Morgan Stanley will integrate the business under the Morgan Stanley name, assuming full operational control. The news comes just as another piece of the Lend Lease puzzle–Holliday Fenoglio’s buyout by management– is confirmed.

The parts of the equity advisory business included in the transaction are all separate account mandates and commingled funds including the Prime Property Fund, but excluding the Value Enhancement Funds, Rosen Consulting Group and Lend Lease Rosen Real Estate Securities. The $2.6 billion Prime Property Fund, formed in 1973, has a geographically diversified portfolio of office buildings, shopping centers, industrial properties, apartments and hotels.

The Lend Lease Rosen Real Estate Securities LLC affiliate manages $1.6 billion in separate accounts and commingled funds. Lend Lease Rosen advises Lend Lease Real Estate Investments on its REIT investments for its own funds and client portfolios, and is Lend Lease’s exclusive REIT management firm. Rosen Consulting is a California-based real estate and regional economics research and consulting firm. Value Enhancement Funds II and III are in a series of four closed-end, enhanced return real estate investment funds designed to take advantage of inefficiencies at varying stages in the real estate cycle. Since the inception of VEF I in 1993, the series of funds has found value in almost $2 billion in commercial real estate throughout the US.

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