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Morgan Stanley transfers 5 offices to AREA

After months of negotiations, Morgan Stanley has transferred the ownership of five San Francisco offices to AREA, which provided mezzanine financing for the original $2.6bn deal.

Morgan Stanley Real Estate has handed back the keys on five San Francisco office properties following months of negotiations with its lenders, bank spokeswoman confirmed today.

The properties were transferred to New York-based private equity real estate firm AREA Property Partners, which provided mezzanine financing for the $2.65 billion deal.

According to real estate data provider, Real Capital Analytics, AREA owns the two most junior pieces of the four tranche, $278 million mezzanine loan.

Morgan Stanley’s MSREF V fund bought the properties as part of a nine-office portfolio from The Blackstone Group in April 2007. The offices were originally part of the Equity Office Properties portfolio acquired by Blackstone just a few months earlier that year.

A Bloomberg report added the buildings involved were One Post, 201 California Street, Foundry Square I, 60 Spear Street and 188 Embarcadero. The bank will continue to own the other office buildings it acquired in the Blackstone deal, including Spear and Steuart Tower, One Maritime Plaza, 580 and 150 California Street.