Owen D. Thomas Named President of Morgan Stanley Investment Management.

NEW YORK -- Morgan Stanley (NYSE:MWD):

--Thomas Was Strongest Candidate Based on His Past Track Record of Growing Businesses, Progress He's Already Made Implementing Asset Management Growth Strategy, and Enthusiastic Support He Received from Division's Employees

--John Carrafiell and Jay Mantz To Become Co-Heads of Morgan Stanley Real Estate

Morgan Stanley (NYSE:MWD) announced today that Owen D. Thomas, 44, who has been serving as Acting President of Morgan Stanley Investment Management since September 2005, has been named President of the division. He will report to Zoe Cruz, Morgan Stanley's Acting President.

John J. Mack, Chairman and Chief Executive Officer of Morgan Stanley, said, "As interim head of asset management, Owen has in a short period of time provided strong leadership for the business, made important progress in beginning to implement the changes necessary to improve growth, and earned the enthusiastic support of the division's employees. Morgan Stanley is firmly committed to the asset management business, and we have outlined a clear strategy to capitalize on the significant growth opportunities it offers. As we evaluated candidates to implement that strategy, it became very clear that Owen was the strongest candidate to lead our asset management business forward. He knows how to build and lead talented teams; he has tremendous credibility in the marketplace; he understands the importance of investment excellence to driving growth; and he has a proven track record of success, having built and led a world-class real-estate franchise."

Ms. Cruz said, "Since Owen became acting president of asset management in September, he has attracted key talent to the business from inside and outside the Firm, improved the internal partnership culture to better serve our clients, and increased accountability for results. We have seen strong support within the division for Owen's strategic thinking and his ability to implement decisions. His track record at Morgan Stanley Real Estate, where he dramatically increased revenue, marketshare and assets under management and supervised the development of innovative new product offerings, along with his progress to date in investment management, make it clear that Owen is the right person to help us pursue our strategy for growth in the asset management business."

As interim head of investment management during the past three months, Mr. Thomas has initiated a number of changes that mark the beginning of an ongoing initiative to better capitalize on growth opportunities, including those in alternative investments and other new products, as well as growth opportunities outside the U.S. The changes he has made so far include creating a new organizational structure to improve accountability for results, speed decision-making and establish a dedicated alternative investments group. Mr. Thomas also has attracted new talent from inside and outside the Firm, seeded new investment products in alternatives and other areas, and moved functions such as product development closer to investors.

Mr. Thomas, who joined Morgan Stanley in 1987, for the past five years led Morgan Stanley Real Estate, the Firm's industry-leading real estate financial services franchise. Mr. Thomas and his team have increased revenues more than two-and-a-half fold since 1999. Since Mr. Thomas first assumed responsibility for the real estate investing business in 1994, Morgan Stanley Real Estate's assets under management have grown from $2 billion to more than $30 billion today. The Firm said that John Carrafiell and Jay Mantz will succeed Mr. Thomas as Co-Heads of Morgan Stanley Real Estate. Mr. Carrafiell formerly headed the Firm's real estate franchise in Europe, and Mr. Mantz formerly led the real estate investing business globally. Mr. Thomas will be Chairman of Morgan Stanley Real Estate. In that role, Mr. Thomas will not be involved in the day-to-day management of the real estate business. He will be available to work with select clients and investors to the extent permitted by his primary role as President of Asset Management.

Mr. Thomas said, "Over the last three months, I've greatly enjoyed the opportunity to work with the talented people in Morgan Stanley's asset management business. This franchise has tremendous potential and, over the past three months, the organization has begun to make a series of changes to realize that potential and build a world-class asset management franchise. In our real estate business, we have achieved an industry-leading position through the efforts of and leadership provided by the partners in the business. John Carrafiell and Jay Mantz have been key members of that partnership and critical to its success. Their new roles as co-heads of the group are a natural next step for them and the group, and I am confident that Morgan Stanley Real Estate will continue to achieve new levels of success."

Owen D. Thomas

Mr. Thomas was named Acting President of Morgan Stanley Investment Management in September 2005. As Acting President, he has undertaken a thorough review of the investment management business and initiated changes designed to sharpen the focus on growth while improving internal coordination and increasing accountability for results.

Since 2000, Mr. Thomas has served as Head of Morgan Stanley Real Estate, the Firm's industry-leading real estate financial services franchise. Morgan Stanley Real Estate is one of the largest global real estate investment management businesses as well as a leader in mergers and acquisitions, restructuring and recapitalization, public and private debt and equity underwriting and mortgage financing.

Mr. Thomas first joined Morgan Stanley in 1987. He began managing the real estate investing business in 1994, was named Managing Director in 1995 and was appointed Head of Morgan Stanley Real Estate in 2000. He is a Trustee of the Urban Land Institute, Vice Chairman of the Pension Real Estate Association and a member of the Real Estate Roundtable. He received a bachelor's degree from the University of Virginia and an MBA from Harvard Business School.

John Carrafiell

John Carrafiell has served as the Head of Morgan Stanley's European Real Estate Group since 1995 and, since 1999, has been a Managing Director of the Firm and a Member of the European Investment Banking Division Operating Committee, which is responsible for the management of the Firm's Investment Banking business in Europe. Mr. Carrafiell has been at Morgan Stanley for nearly 19 years. He joined the New York office in 1987, moved to the Firm's London office in 1989, and initiated the Morgan Stanley Real Estate Funds' (MSREF) European investment program in 1994 as Director of Acquisitions (Europe).

He is a Trustee of the Urban Land Institute, a director of the Management Board of the European Public Real Estate Association (EPRA) and a director of several Morgan Stanley private equity investment entities including Canary Wharf. He graduated with a BA from Yale University in 1987.

Jay Mantz

Jay Mantz is a Managing Director of Morgan Stanley and has served as Head of the Morgan Stanley Real Estate Investing Group. Over the last six years, Mr. Mantz has been responsible for the global investment activities of Morgan Stanley Real Estate's principal business, including the Morgan Stanley Real Estate Funds and other institutional accounts and proprietary funds managed by Morgan Stanley.

Mr. Mantz graduated from Boston University in 1986 and received an MBA in 1990 from the Wharton School of the University of Pennsylvania. He joined Morgan Stanley in 1993, in the New York office of Morgan Stanley Realty, and moved to London in 1996, as Head of the Morgan Stanley Real Estate Funds in Europe.

Morgan Stanley Investment Management

Morgan Stanley Investment Management, with $428 billion in assets under management and more than 400 investment professionals around the world, is one of the 20 largest businesses in the highly fragmented global investment management industry. The division, which serves both institutional and individual clients, contributed more than 12 percent of Morgan Stanley's profit before taxes in 2004, up from more than 8 percent in 2003.

The division has three distinct sets of clients:

--Institutional clients, including 401(k)/defined contribution plans, endowments, foundations, pension funds, corporations, governments, and high-net-worth individuals;

--Individual investors who own Morgan Stanley funds managed by Morgan Stanley Investment Advisors; and

--Investors who make investments through other brokerage firms, banks and financial planners via Van Kampen Investments, a wholly owned subsidiary.

As of August 31, 2005, assets under management or supervision included $227 billion in institutional assets and $201 billion in retail assets.

Morgan Stanley Real Estate

Morgan Stanley Real Estate is comprised of three major global businesses: Investing, Banking, and Lending. Since 1991, Morgan Stanley has acquired $73.1 billion of real estate assets worldwide and currently has approximately $30.0 billion in real estate assets on behalf of its clients. Using its own capital, Morgan Stanley also originates upwards of $24 billion in commercial mortgages annually. In addition, Morgan Stanley Real Estate provides a complete range of investment banking services including merger, acquisition and restructuring advisory and recapitalizations, as well as public and private debt and equity financing. Morgan Stanley established its real estate organization in 1969.

Morgan Stanley is a global financial services firm and a market leader in securities, investment management, and credit services. With more than 600 offices in 28 countries, Morgan Stanley connects people, ideas and capital to help clients achieve their financial aspirations.