Mitchell M. Merin to Retire as President and Chief Operating Officer of Morgan Stanley Investment Management

-- Owen D. Thomas to Serve as Acting President of Morgan Stanley Investment Management During Search for Permanent Successor to Merin

-- Mack Says Firm Is Strongly Committed to Growing Investment Management as Key Business for Morgan Stanley

Morgan Stanley (NYSE:MWD) announced today that Mitchell M. Merin,President and Chief Operating Officer of Morgan Stanley InvestmentManagement (MSIM) has decided to retire from the Firm, and Owen D.Thomas will serve as Acting President of MSIM during the search for apermanent successor to Mr. Merin. As Acting President, Mr. Thomas willfocus on working with the senior management team on day-to-daymanagement of the business and identifying the right strategy andlong-term leadership for MSIM. Mr. Merin will remain as a senioradvisor to MSIM, working with Mr. Thomas on a variety of mattersrelated to the transition and other issues. Joseph McAlinden, MSIM'sChief Investment Officer, will be responsible for MSIM's investmentprocess and strategy.

Mr. Merin, 52, has been with the Firm for more than two decadesand for the past seven years has led MSIM, one of the world's 20largest investment management businesses offering investmentmanagement services to a diverse client base of institutional andindividual investors worldwide. During Mr. Merin's tenure as Head ofMSIM, he led the combination of a variety of disparate businesses intoa single, integrated investment management business; increased assetsunder management; and enhanced the profitability of the business.

Mr. Thomas, 44, is Head of Morgan Stanley Real Estate, the Firm'sindustry-leading real estate financial services franchise. MorganStanley Real Estate is one of the largest global real estateinvestment management businesses as well as a leader in mergers andacquisitions, restructuring and recapitalization, public and privatedebt and equity underwriting and mortgage financing. Mr. Thomas willretain his role at Morgan Stanley Real Estate during this interimassignment. Mr. Thomas and Mr. McAlinden will report to Zoe Cruz,Morgan Stanley's Acting President.

Firm Committed to Building on Strengths of Business

John J. Mack, Chairman and Chief Executive Officer of MorganStanley, said, "Investment Management is a key business for MorganStanley, one that we are deeply committed to investing in and growing.As head of the business, Mitch Merin provided strong leadership andestablished an excellent foundation on which to build. He hassignificantly enhanced profitability, and the performance of key fundscontinues to improve. We greatly appreciate everything that Mitch hascontributed to the Firm and are grateful that he will be working withOwen Thomas to ensure a smooth transition following his retirement.

"Owen is an outstanding leader, who enjoys enormous credibility inthe marketplace with clients and investors. Together with hispartners, he helped build one of the world's top financial servicesbusinesses in the real estate sector. Since he became Head of MorganStanley Real Estate in 2000, Owen and his team have nearly doubledthat business' revenues. As we look to the future, Owen Thomas will beworking closely with Mitch and the rest of our management team to helpus formulate the right strategy for MSIM, further strengthenday-to-day management and identify the type of long-term leadershipfor the business that we need to ensure continued success."

Ms. Cruz said, "The Firm is strongly committed to building ourinvestment management business and realizing its promising growthopportunities. Mitch and his team have done an outstanding jobcreating strong momentum in the business, having achieved pre-taxmargins of over 30 percent for the first half of 2005. Owen Thomaswill now add his additional experience, insight and leadership abilityto work with them on how to take the business to a new level ofsuccess. During this temporary assignment, the strong team that Owenhas developed at Morgan Stanley Real Estate will continue to drivethat unit's momentum."

Mr. Merin said, "It has been a great honor to work with theincredibly talented professionals at MSIM. They have accomplished agreat deal in the past few years, and I am confident that theycontinue to have enormous potential for further growth in thebusiness. Owen Thomas brings a valuable perspective to the businessthat will be extremely helpful in assisting the Firm realize thatgrowth by defining the best possible strategy and leadership for thenext phase of MSIM's development."

Mitchell M. Merin

In addition to his leadership of MSIM for the past seven years,Mr. Merin has held a wide variety of executive positions for more thantwo decades with Morgan Stanley and with Dean Witter, Discover & Co.,which merged with Morgan Stanley in 1997. At the time of the merger,Mr. Merin was Executive Vice President and Chief AdministrativeOfficer for Dean Witter Discover, and he led its merger transitioneffort. After the merger he served as President and CEO of MorganStanley Dean Witter Advisors, the Firm's proprietary asset managementbusiness serving individual investors, before assuming his currentrole in 1998 as head of the combined investment management businessfor both individual and institutional investors.

Mr. Merin joined Sears in 1981 before becoming Senior VicePresident and Group Treasurer at Dean Witter in 1986. He subsequentlyserved at Dean Witter as Managing Director of Corporate Finance aswell as Executive Vice President and Director of Taxable Fixed Incomeand Futures, among other roles. He received a bachelor's degree fromTrinity College, where he currently serves on the Board of Trustees,and an MBA from Northwestern University's Kellogg Graduate School ofManagement in 1977.

Owen D. Thomas

Under Mr. Thomas and his management team, Morgan Stanley RealEstate's investment management business has grown significantlythrough both acquisitions and organic growth. Morgan Stanley's realestate assets under management have grown from $2 billion in 1994 tonearly $40 billion today. Morgan Stanley Real Estate manages a varietyof open-end and closed-end funds and separate accounts globally, witha broad range of strategies and return criteria.

Mr. Thomas joined Morgan Stanley in 1987 and has been activelyinvolved in the Firm's real estate business since that time. He beganmanaging the real estate investing business in 1994, was namedManaging Director in 1995 and Head of Morgan Stanley Real Estate in2000. He is a Trustee of the Urban Land Institute, Vice Chairman ofthe Pension Real Estate Association and a member of the Real EstateRoundtable. He received a bachelor's degree from the University ofVirginia and an MBA from Harvard Business School.

Morgan Stanley Investment Management

MSIM, with $416 billion in assets under management and more than400 investment professionals around the world, is one of the 20largest businesses in the highly fragmented global investmentmanagement industry. The division, which serves both institutional andindividual clients, contributed more than 12 percent of MorganStanley's profit before taxes in 2004, up from more than 8 percent in2003.

MSIM 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 May 31, 2005, assets under management or supervisionincluded $217 billion in institutional assets and $199 billion inretail assets.

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