Special Situations, structured as an open-ended fund, primarilyseeks to make non-controlling investments in an array of realestate securities in growth/emerging, developed and distressedmarkets around the world. As of the end of 2007, Special Situationscommitted approximately $4.8 billion of equity, with 62 closedinvestments in China, Australia, India, Russia, Poland, Brazil,Mexico, the US, Japan and Western Europe, among other areas. TheFund's investment professionals form a core group with extensivecollaborative experience, maintaining a team presence in each ofthe regions where it has invested.

Willem de Geus, managing director and global portfolio managerof Special Situations, says that investors continue to be attractedto the global opportunistic real estate strategy of the funddespite recent turbulence in the global capital markets. "The heavyemphasis on the high growth emerging economies--China, India,Russia, Poland, Mexico and Brazil--the flexibility to invest acrossthe capital structure of real estate companies, and the ability toinvest in developments and recurring income-producing assets in allreal estate sectors is what makes this fund attractive in themarketplace."

John Carrafiell, joint global head of Morgan Stanley Real EstateInvesting and president of Special Situations says that "thissubstantial additional capital raise for Special Situations issignificant, particularly given the current challenging fundraisingenvironment. It demonstrates strong investor support for the Fund'sstrategy, underscoring the global breadth of Morgan Stanley RealEstate's platform and the team's ability to source attractiveopportunities in a volatile market."