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TOKYO-Starwood Hotels & Resorts Worldwide Inc. of White Plains and a fund managed by New York City-based Morgan Stanley Real Estate have contracted to buy the 802-room Sheraton Grande Tokyo Bay Hotel in the Disney resort area from locally based construction company Taisei Corp. Group. The deal for the 19-year-old property is expected to close in March.

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.

The Sheraton Grande is one of five official Tokyo Disney hotels and is a popular wedding facility, with two chapels and 13 party rooms, along with eight restaurants, the Oasis sport and recreation complex, indoor and outdoor pools.

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