FILE: Morgan Stanley signage in Times Square, New York, in 2007. Not the Milpitas property. Photo: Jenix89 / Wikimedia Commons, public domain (cropped).
Funds managed by Morgan Stanley Real Estate Investing have acquired a research and development facility in Milpitas, California, for $84.1 million, adding a semiconductor-linked property to the firm’s real estate portfolio.
The 189,481-square-foot facility is occupied under a long-term net lease by KLA Corporation, which supplies process-control and yield-management systems to the semiconductor industry, according to Morgan Stanley’s November 11 announcement.
The transaction is an acquisition of an existing leased property, not an announcement that Morgan Stanley is building a new chip factory. The buyer did not disclose the seller, the remaining lease term or the property’s rental income in the announcement.
A bet on specialized real estate
Morgan Stanley said the facility sits in Silicon Valley’s “Golden Triangle,” near KLA’s global headquarters. The firm highlighted its specialized infrastructure and the tenant’s investment in the building as reasons for the purchase.
That makes the deal a real estate investment tied to a semiconductor business, rather than a direct investment in chip production. The property’s long-term lease is part of the investment case, although the release does not provide enough financial detail to calculate its yield or assess future returns.
The purchase adds to Morgan Stanley Real Estate Investing’s recent acquisitions of properties serving advanced manufacturing, data infrastructure and logistics.
In September, the platform acquired a manufacturing facility occupied by climate-control equipment maker Munters. It also acquired a manufacturing property occupied by BAE Systems, reflecting its interest in buildings with specialized power and industrial infrastructure.
Technology and demographic themes
The real estate platform’s activity extends beyond technology-related properties. Morgan Stanley also cited a $158.5 million acquisition of an Ace Hardware distribution facility in Kansas City and a two-community seniors-housing portfolio in the Orlando and Tampa areas.
Those examples show the range of demand drivers the manager is pursuing, from distribution and advanced manufacturing to aging populations. They are separate investments, not components of the $84.1 million Milpitas purchase.
Morgan Stanley Real Estate Investing reported $58 billion of gross real estate assets under management worldwide in the announcement. The new KLA-leased facility gives its funds another holding linked to the infrastructure used by a major semiconductor-industry supplier.
JBizNews Desk | Real Estate
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