PRESS RELEASES

Hines Announces Plans for Second Office Building at 24th at Camelback in Suburban Phoenix

10/4/2006

(PHOENIX, ARIZONA - The Phoenix office of Hines, the international real estate firm, today announced plans to develop a second office building at 24th At Camelback.  The building, which is being developed jointly by Hines and a major U.S. pension fund represented by Morgan Stanley Real Estate, will rise 11 stories and will contain approximately 300,000 square feet.

24th At Camelback is a mixed-use project located at the southwest corner of 24th Street and Camelback Road, one of the most dynamic corners in Phoenix’s Biltmore area.  The 10-acre site, which has been sensitively planned to complement the surrounding streetscape and provide tenants with dramatic views of Piestewa Peak and Camelback Mountain, has been developed in phases.  The first phase, which Hines completed in June 2000, is comprised of an eight-story, 300,000-square-foot office building including ground floor retail space, and a 1,175-space parking structure.  The second phase, a 15-story, 208-unit condominium named Optima Biltmore Towers, was developed by Chicago-based Optima and opened in 2006.

Pickard Chilton of New Haven, who designed the first office building, will also design the second.  The design will incorporate sweeping horizontal planes, powerful geometry and careful attention to detail.  The new building will include ground-floor retail space and a 1,040-space parking structure.  A garden area with native plants and materials is planned for the heart of the project.

“We think that this new building will be a terrific addition to Phoenix as well as the Biltmore community,” said Hines Senior Vice President Clayton Elliott.

"The Camelback corridor is a premier office location in Phoenix," said Dave Hardman, managing director and head of U.S. Real Estate Investing for Morgan Stanley. "We expect this venture with Hines will be an excellent investment for our client."

 Hines’ Vice President-Designated Broker William Olson and Assistant Project Manager John Orsak will coordinate project development and leasing efforts.  Groundbreaking will occur in spring 2007.  When construction is complete in late spring 2008, Hines will provide property management services.  The independent leasing team and the project contractor have yet to be selected.

Hines has been active in the Phoenix market since 1996.  The firm developed two owner-occupied projects in the Phoenix area:  the 225,000-square-foot US Airways Corporation Headquarters in Tempe; and the 350,000-square-foot, three-building, Vanguard Regional Headquarters, constructed on Vanguard’s campus site in Scottsdale.  Hines is providing property management services for both projects, as well as the Hines-developed 300,000-square-foot 24th At Camelback Phase I office building, which is owned by an international pension fund.  

In addition to 24th At Camelback, Morgan Stanley Real Estate Investing also has asset management responsibilities for the Biltmore Financial Center in the Phoenix area. Morgan Stanley Real Estate is comprised of three major global businesses – investing, banking and lending. Since 1991, Morgan Stanley has acquired $91.6 billion of real estate assets worldwideand currently manages $53.9 billion in real estate assets on behalf of its clients. In addition, Morgan Stanley Real Estate provides a complete range of market-leading investment banking services to its clients including advice on strategy, mergers, acquisitions and restructurings, as well as underwriting public and private debt and equity financings. Morgan Stanley is also a global leader in real estate lending and, using its own capital, originated approximately $28 billion in commercial mortgages in 2005. For more information about Morgan Stanley Real Estate, go to www.morganstanley.com/realestate.

Hines is a privately owned, international real estate firm involved in real estate investment, development and property management. The Hines portfolio of projects underway, completed, acquired or managed for third parties includes 915 properties representing more than 360 million square feet of office, residential, mixed-use, industrial, hotel, medical, retail and sports facilities, as well as large, master-planned communities and land developments. With offices in 64 U.S. cities and 15 foreign countries, and controlled assets valued at approximately $13.5 billion, Hines is one of the largest private real estate organizations in the world. Visit www.hines.com for more information.