Wall Street Journal

"While I won't go into a lot of detail, we are continuing towork with the lender" in negotiating the next course of action,Kelleher said. The Barclays non-recourse debt, originally dueAugust 3, got a three-month extension. Citing unnamed sources, theJournal reported that Morgan Stanley also is consideringother options, including an influx of capital to keep theinvestment afloat.

Morgan Stanley already has taken about $700 million inwrite-downs and other losses from the Crescent deal alone, theJournal reported. Year-to-date, the company has lost $2.1billion on its real estate investments overall, with most of thoselosses occurring earlier in the year, according to Q3financials.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.