26 East 63rd Street #12AF and John Mack

Morgan Stanley CEO John Mack is looking to unload his nine-room penthouse in the Lennox Hill’s Leonori building, according to Curbed. Asking price for the 3,650-square-foot duplex: $22.5 million.  [more]

Goldman Sachs and Morgan Stanley will shell out a combined $557 million to settle the federal government’s allegations that the banks foreclosed on homeowners who should have been allowed to stay in their homes, the Associated Press reported. The deal, announced today with the Federal Reserve, could compensate hundreds of thousands of homeowners who fell victim to “robo-signing,” when banks signed off on foreclosures without proper review. [more]

On the heels of a discriminatory lending case that cost Wells Fargo $175 million, the American Civil Liberties Union is taking on Morgan Stanley. According to the New York Times, the ACLU will file a class-action suit in federal court in New York today — alleging that Morgan Stanley violated the Fair Housing Act and the Equal Credit Opportunity Act by targeting risky and expensive loans at African-American borrowers from 2004 to 2007.

“Morgan Stanley actively encouraged lending tactics that increased the levels of risk associated with individual loans,” the ACLU said in its complaint. [more]

Marriott East Side at 525 Lexington Avenue

Morgan Stanley’s Prime Property Fund has put its New York Marriott East Side on the block for $350 million. The fund hired Eastdil Secured to market the 646-room hotel, at 525 Lexington Avenue and 49th Street, the Wall Street Journal reported. [more]

From left: 1 New York Plaza and 1515 Broadway

While two large recent deals may signal Manhattan’s office leasing market is finally thawing, the New York Post said industry insiders remain concerned because neither represented a relocation. In both Viacom’s agreement for 1.6 million square feet at 1515 Broadway and Morgan Stanley’s deal for 1.1 million square feet at One New York Plaza, the tenants were never close to making commitments to — and thereby solidifying — one of the city’s new towers, such as the World Trade Center buildings, 11 Times Square, 250 West 55th Street, and the office portion of the International Gem Tower. [more]

Blackstone CEO Stephen Schwarzman

Park Avenue-based Blackstone Group and a Morgan Stanley property fund are seeking control of a 23 million-square-foot industrial real estate portfolio, the Wall Street Journal reported. The portfolio includes a total of 95 properties in California, Arizona, Texas and other states.

The portfolio, known as CalWest and owned by Walton Street Capital, has an anticipated default in June. For the past two years, the Journal reported, Blackstone has collected pieces of CalWest’s junior debt in an effort to take over. [more]

Brian Waterman, vice chairman of Newmark Knight Frank, and One New York Plaza

It might be an old city staple that finally shakes the office leasing market out of its nearly year-long slumber.

The New York Post reported that Morgan Stanley has advanced “beyond the term-sheet stage” in negotiations to convert its 800,000 square feet at One New York Plaza, which it currently subleases from Wells Fargo, to a direct lease. What’s more, Morgan Stanley wants to add another 300,000 square feet to its footprint. [more]

From the January issue: For years, private equity firms have been lavished with huge sums of money by investors looking to own New York buildings. But recently, there have been fewer deals that those firms are finding attractive — ones that offer quick and bountiful yields. Plus, many so-called distressed opportunities that were supposed to materialize didn’t, as banks worked out new loan terms with their struggling borrowers.

As a result, many private equity firms’ buckets of cash have been sitting unspent. And, under typical investment rules, funds that are not deployed within three years must be returned to investors, without a hotel or condo or office tower to show for them. [more]

The Wall Street Journal’s Craig Karmin describes what he called a “very unusual move,” by Morgan Stanley in cutting a deal to return $700 million to investors in one of its real estate funds, in the video above. The Journal outlines the options for the investment fund, which has a total of $4.7 billion to spend and a June deadline to invest in commercial real estate. Karmin said it could spell the end of private equity real estate investment at Morgan Stanley, a “last man standing” in commercial real estate investment among huge banks, as other players have sold off their business or announced they are contemplating doing so in recent months.

The same signs of increasing consumer spending that are expected to boost the retail real estate market are already positively impacting the industrial real estate market.

The New York Times cited Cushman & Wakefield data that shows the vacancy rate in industrial properties declined in the first half of the year to 9.7 percent, year-to-date leasing activity is up 27 percent from a year ago, and sales volume in the first half of the year grew nearly 160 percent compared to the same period a year ago.

Several companies have been especially aggressive in acquiring industrial properties, including Clarion Partners, Terren Realty Corporation, Morgan Stanley, the Cabot Group and CenterPoint Properties. But Blackstone Group may be the most active of all, which added 275 industrial buildings for $2 billion, tripling its portfolio. … [more]