For Morgan Stanley, the deal broadens an already massive Japanese platform. The investor has acquired more than $17 billion of office, hotel, residential and retail properties since 1998. Today, the firm's real estate assets under management in Japan total $6.7 billion and include such properties as the Westin Tokyo, Shinagawa Mitsubishi Building and Akasaka Garden City in Tokyo, the Shin Kobe Oriental in Kobe and the Hyatt Regency Kyoto in Kyoto.

The price of this latest score was not disclosed in a jointly prepared statement Monday by Starwood and Morgan Stanley. However, industry sources familiar with trophy hotel properties tell GlobeSt.com the estimated replacement cost of the asset is about $400 million, based on hard construction costs alone of about $500,000 per room. "The buyers, of course, could pay above replacement cost for a property of this stature," a construction industry source says.

The Morgan Stanley fund will own 74.9% of the joint venture. Starwood will own the remaining 25.1% and will continue to manage the hotel under a long-term contract with the JV. Starwood has managed the property since it opened in 1988.