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Morgan Stanley Expands in Real Estate Credit, Buys Mesa West

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Morgan Stanley Investment Management, a unit of Morgan Stanley (MS - Free Report) , is set to acquire Los Angeles, CA-based Mesa West Capital, LLC, a commercial real estate credit platform. The financial terms of the deal, which is expected to close in the fourth quarter of 2017, were not disclosed.

With this acquisition, $5 billion in assets under management will get added to the company’s Investment Management unit, which had $435 billion in assets under management as of Jun 30, 2017 and adds about 7% to overall revenues of the company.

Morgan Stanley’s Investment Management wing will now be able to offer real estate credit, which was previously not available.

Mesa West is a leading, originations-focused, commercial real estate credit platform that has originated 250 loans since its inception in 2004, totaling $12 billion in principal balance. Mesa West’s employees will continue to work from its offices in Los Angeles, New York and Chicago. Also, its current management team, led by Co-Founders Jeff Friedman and Mark Zytko, will continue to manage the company on a day-to-day basis.

Shares of Morgan Stanley have gained 50.7% over the last 12 months, outperforming the industry’s rally of 38%.



Currently, Morgan Stanley carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same space are Interactive Brokers Group (IBKR - Free Report) , Moelis & Company (MC - Free Report) and Raymond James Financial (RJF - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Interactive Brokers Group has been revised 3.4% upward for the current year over the last 60 days. Its share price has seen a 25.8% rise over the past 12 months.

Moelis & Company witnessed an upward earnings estimate revision of 2.3% for the current year in the last 60 days. Also, the stock has gained 64.5% in a year’s time.

Raymond James Financial’s Zacks Consensus Estimate has been revised upward by one cent per share, for the current year in the past 60 days. Also, in a year’s time, its share price has moved up 45.7%.

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