REAL ESTATE - Morgan Stanley Real Estate has created a senior housing joint venture with National Health Care Properties.

Dave Hardman is head of US real estate investing for Morgan Stanley. He said, "We feel good about doing business with a high quality owner and operator in the senior housing industry. We believe that the venture will provide strong returns based on the demographic trends in the US."

The joint venture will be investing in a variety of assets. These will include assisted living, independent living and skilled nursing facilities. The transactions will be either investing equity in new development projects or buying existing properties. Deals will be considered on a nationwide basis in the major metropolitan areas.

There are some existing assets that have been contributed to the JV by National Health Care. These have a current value of around $145m(€112m). This represents some properties currently owned by National Health Care and assets that are under contract.

The total capitalisation in the joint venture is $475m. This includes a combination of 40% in equity contributions and 60% debt. The venture will be owned by 75% by Morgan Stanley and 25% by National Health Care.

There is a total of $133m of equity that is being put into the JV to fund the additional transactions for the venture. Morgan Stanley invested $100m and National Health Care $33m.

There is a chance that more capital could be added to the venture in the future. Both companies can invest more equity down the road. The amounts would be $150m from Morgan Stanley and $50m from National Health Care.

Morgan Stanley made the investment in the JV on behalf of a state pension fund as a separate account investment.