Morgan Stanley Real Estate Makes Strategic Investment in Brazilian Residential Real Estate Company Abyara Planejamento Imobiliario S.A.

SAO PAULO, Brazil, April 16 /PRNewswire-FirstCall/ -- Morgan Stanley Real Estate and Abyara Planejamento Imobiliario S.A. ("Abyara") (BOV: ABYA3.SA), a residential real estate broker and co-developer in Brazil, announced today that Morgan Stanley Real Estate Special Situations Fund III has entered into an agreement to acquire a 14.29% stake in Abyara. This is Morgan Stanley Real Estate's most substantial investment in Brazil to date.

In the transaction, Morgan Stanley Real Estate Special Situations Fund III acquired 4,138,845 shares from Artesia Equity Investments LLC and Marcelo Faria de Lima, which are bound by the Abyara Shareholders Agreement. Additionally, Morgan Stanley Real Estate Special Situations Fund III acquired 3,129,056 shares held by Emilio Jose Westermann, Celso Minoru Tokuda and Arnaldo Curiati, which are not subject to the shareholders agreement. The three founding shareholders retain all their respective shares bound to the shareholders agreement.

"Abyara is a highly dynamic real estate company with a leading market position, strong brand recognition and an experienced management team," said Brian Carr, Managing Director and head of Latin America investing for Morgan Stanley Real Estate. "We believe Abyara's business model provides a strategic advantage and represents a unique opportunity for Morgan Stanley Real Estate to enter the Brazilian real estate market."

Commenting on the transaction, Mr. de Lima, said, "We believe that this is an important step in Abyara's growth. Morgan Stanley Real Estate brings a proven track record of successfully investing in real estate globally as well as strong financial expertise."

Abyara intends to elect a designee of Morgan Stanley Real Estate Special Situations Fund III to Abyara's board of directors.

  Abyara will hold a conference call to discuss the transaction on:

  Conference Call (in English)          Conference Call (in Portuguese)

  Date: April 17, 2007 (Tuesday)        Date: April 17, 2007 (Tuesday)
  Time:  08:00 a.m. New York time       Time: 09:00 a.m. New York time
         09:00 a.m. Brasilia time             10:00 a.m. Brasilia time
  Connection number: 1 (973) 582-2741   Connection number: 55 (11) 2101-4848
  Access Code:  8701158                 Access Code:  Abyara