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 US, 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.

Willem de Geus, managing director and global portfolio manager of Special Situations, says that investors continue to be attracted to the global opportunistic real estate strategy of the fund despite recent turbulence in the global capital markets. "The heavy emphasis on the high growth emerging economies--China, India, Russia, Poland, Mexico and Brazil--the flexibility to invest across the capital structure of real estate companies, and the ability to invest in developments and recurring income-producing assets in all real estate sectors is what makes this fund attractive in the marketplace."

John Carrafiell, joint global head of Morgan Stanley Real Estate Investing and president of Special Situations says that "this substantial additional capital raise for Special Situations is significant, particularly given the current challenging fundraising environment. It demonstrates strong investor support for the Fund's strategy, underscoring the global breadth of Morgan Stanley Real Estate's platform and the team's ability to source attractive opportunities in a volatile market."