Doral resort at center of Morgan Stanley CMBS woes

The 693-room Doral Golf Resort & Spa in Miami is part of a quintet of properties backed by a $1 billion mortgage that a Morgan Stanley investment fund wants to restructure. The $1.75 billion MSREF V U.S. fund picked up the 639-room Doral property; the 780-room Grand Wailea Resort Hotel & Spa in Maui; the 796-room La Quinta Resort & Club and PGA West in La Quinta, Calif.; the 739-room Arizona Biltmore Resort & Spa in Phoenix; the 693-room Doral Golf Resort & Spa in Miami; and the 279-room Claremont Resort & Spa in Berkeley, Calif. in a 2007 deal. That was the top of the market, and now the debt service costs are prohibitively high, according to data from debt-rating company Realpoint. Morgan Stanley’s Real Estate Funds unit went hard into real estate during the boom and about $53 billion of property, according to Real Capital Analytics. It only sold $14 billion between 2005 and 2007, the research firm said. Plunging property values have savaged the fund, and hit investors hard — over the summer, the California State Teachers’ Retirement System said its $137 million investment in MSREF V was then worth $300,000. [Wall Street Journal]