What do all these Houston office towers have in common?
That’s right — they’re all part of the vast Crescent Real Estate Equities empire, which at the peak of the market 2 years ago comprised 54 properties in all, stretching from Texas to the California coast. That’s when Morgan Stanley snatched up the whole thing for a mere $6.5 billion, thanks in part to a little $2 billion loan from Barclays Capital.
Today, Morgan Stanley announced it is giving up on the whole thing. Back to the bank all those properties go. All of them. (Okay, minus a few that were jettisoned along the way.)
Morgan’s plans for Crescent ran off the track soon after it bought the portfolio from Richard Rainwater, the renowned Texas investor, and [Crescent cofounder John] Goff.
Morgan originally planned to put the properties in one of the real-estate funds it manages for institutions and wealthy individuals. But fund investors balked at buying the buildings at top-of-the-market prices, forcing Morgan to keep the properties on its own balance sheet.
The Barclays debt originally was due Aug. 3, but the bank agreed to extend it several times.
Barclays formed a joint venture with Goff Capital Inc. to take over the properties and named John Goff, co-founder of Crescent before it was sold to Morgan, chairman and chief executive of the new joint venture.
- Morgan Stanley Gives Up Crescent Properties to Lender Barclays [WSJ, via Prime Property]
- Morgan Stanley to Take Hit on Crescent [Square Feet]
- Morgan Stanley and Its Waning Crescent [WSJ]
- Portfolio [Crescent]
Photo of Greenway Plaza: Flickr user ShinyCrazyDiamond