William Milam

William Milam is responsible for Morgan Stanley’s U.S. real estate investing arm. Over the last year, that arm of the global banking giant has continued to invest in areas where it sees compelling opportunities, despite some challenges within the market, including the narrowness of economic growth.

One particular area of focus for the business is senior housing, where Milam said Morgan Stanely has bought about $400 million to $500 million in assets. 

“Senior housing strategy and growth is really demographic driven, and the noncyclical nature of that is certainly compelling to us,” the longtime Morgan Stanley employee said. “As the world and the markets become so levered to artificial intelligence and all that’s going on with the AI and digital infrastructure super cycle, capex super cycle, we find that senior housing delivers both growth as well as diversification away from that mega-trend off which so much seems to be driven today.” 

At the end of last year, Morgan Stanley Real Estate Investing (MSREI) and MorningStar Senior Living struck a deal in which MSREI acquired a MorningStar senior housing portfolio based in Denver from Kayne Anderson Real Estate for $305 million. The portfolio was made up of 463 units that spanned three buildings.

“That deal is highly indicative of the types of deals we like to do,” Milam said. “The type of opportunity we’re focused on is higher-end properties that are newer, well located, well maintained and well operated. Delivering those things in a package will enable us to target the highest-paying and the wealthiest demographics, which will enable us to support attractive growth.”

But senior housing isn’t the only area of interest for MSREI. The division also invested about $200 million in residential, and between $300 million and $400 million in industrial. 

Milam said the past year was challenging for MSREI, but there were opportunities. 

“It continued to be a very difficult market to predict,” he said. “But we’re benefiting from some strategies playing out well in places where we’re concentrated, like senior housing. But capital-raising has improved. We viewed this market as being one which was very fertile, interesting, and poised to produce compelling returns.”