Morgan Stanley Launches Global Carrier Hotel Business

Foresees simultaneous rollout in 60-75 cities worldwide

By Rich Miller
CarrierHotels News Staff

May 25, 2000 -- The Morgan Stanley Real Estate Funds (MSREF) are launching two new companies that will work together to create a global network of carrier hotel facilities.
"The companies intend to simultaneously roll out facilities in 60-75 major cities worldwide," according to a May 25 press release from Morgan Stanley Dean Witter.
``The demand for seamless, global carrier hotel solutions is growing at an explosive pace in lockstep with the extraordinary growth of the Internet and telecom sectors," said Michael J. Franco, MSREF's Director of U.S. Acquisitions and head of the global carrier hotel initiative. "We are extremely excited about our carrier hotel platform and our ability to execute for the telecom industry with the highest quality standards."
The two new firms, MetroNexus and Global Gateway, will concentrate their efforts on different territories.
MetroNexus will focus on North America and Europe, with joint headquarters in New York and Paris, and will be managed by professionals from The Gnome Group, which has developed carrier hotels on both sides of the Atlantic.
The Pacific Rim will be the target market for Global Gateway, which will be based in Los Angeles and Hong Kong and managed by professionals from Pioneer Global Group and One Wilshire, a leading carrier hotel in the Western U.S. Together, the management team of Global Gateway has developed over 20 carrier hotel facilities since 1993.
The alliance recently acquired properties in Seattle, Metro New York City and Montreal and already has over 15 additional properties under agreement in 14 cities in North America, Europe and Asia with a total combined square footage of over 8.5 million, according to the news release.
MSREF said the total initial capitalization for the companies is expected to be in excess of $1.25 billion, with MSREF and management from the companies committing over $350 million of equity at closing.
The two management teams have existing relationships with over 150 telecom companies.
"MSREF is a strong financial partner with a thorough understanding of the industry, contacts and resources within the capital markets, and the ability and flexibility to react quickly," said Goodwin Gaw, Chief Executive Officer of Global Gateway. "Together, MSREF, MetroNexus and Global Gateway will create a formidable team that will be able to bring continuity and branding to a very fragmented and underdeveloped industry.''
MSREF is a global real estate private equity fund affiliated with and sponsored by Morgan Stanley Dean Witter & Co.