Morgan Stanley Real Estate announced today that it has established a joint venture in the United Kingdom with Sunrise Senior Living, Inc., one of the world’s largest assisted living facilities operators.  The joint venture has committed to acquire and operate 15 assisted living communities totaling 1,244 units across the UK, for $1.1 billion.  The debt funding for the transaction was provided by Bank of Scotland Corporate.  This is Morgan Stanley Real Estate’s first investment in the assisted living market in the UK and provides a strong platform for expansion in this asset class in Europe.

The 15 communities were developed or are under development by Sunrise in partnership with institutional investors advised by Pramerica Real Estate Investors and comprise a mix of facilities that are currently operational and that are under development. Morgan Stanley Real Estate will own 90 percent of the new venture, with the remaining ten percent being retained by Sunrise, which will operate the communities under 30-year management agreements.
 
Commenting on the transaction, Toby Phelps, Morgan Stanley Real Estate’s Head of UK Investing, said, “This exciting acquisition is a further step in our strategy of investing alongside best-in-class operators in key growth markets in the UK.  Sunrise is the stand-out leader in the assisted living market and has created a portfolio of high-class communities that are well placed to capture the increasing demand for high quality elderly care in the UK.”

“We are delighted to be establishing this JV with Morgan Stanley Real Estate and to be raising the profile of assisted living as an asset class.  We see tremendous potential for further growth in the UK and believe our agreement with Morgan Stanley Real Estate will enable us to serve a rapidly growing section of the population,” said Laure Duhot, Sunrise’s head of International Capital Markets.

Morgan Stanley Real Estate is comprised of three major global businesses: Investing, Banking and Lending.  Since 1991, Morgan Stanley Real Estate has acquired $121.5 billion of real estate assets worldwide and currently manages $55.6 billion in real estate assets on behalf of its clients.  A complete range of market-leading investment banking services for real estate clients include advice on strategy, mergers, acquisitions and restructurings, as well as underwriting public and private debt and equity financings.  As a global leader in real estate lending, Morgan Stanley has offered approximately $156.0 billion of CMBS through the capital markets since 1997, including $35.5 billion in 2006.  For more information about Morgan Stanley Real Estate, please visit www.morganstanley.com/realestate.

Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services.  The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 32 countries.  For further information about Morgan Stanley, please visit www.morganstanley.com.

Note to Editors:
Sunrise Senior Living, a McLean, Virginia-based company, employs approximately 40,000 people.  As of March 31, 2007, Sunrise operated 444 communities in the United States, Canada, Germany and the United Kingdom, with a combined capacity for more than 52,000 residents.  At quarter end, Sunrise also had 42 communities under construction in these countries with a combined capacity for more than 6,300 additional residents.  Sunrise offers a full range of personalized senior living services, including independent living, assisted living, care for individuals with Alzheimer's and other forms of memory loss, as well as nursing, rehabilitative and hospice care.  Sunrise's senior living services are delivered by staff trained to encourage the independence, preserve the dignity, enable freedom of choice and protect the privacy of residents.  To learn more about Sunrise, please visit http://www.sunriseseniorliving.com.

Contact: Media Relations, Carlos Melville, +44.207.425.8955