NEW YORK (Reuters) – Morgan Stanley (MS.N) has handed off its Crescent real estate subsidiary to Barclays Capital [BARCBC.UL], the companies said on Friday.

A Morgan Stanley spokeswoman said the New York bank agreed to transfer the subsidiary to Barclays in exchange for a “full release” of liability on the loans relating to Crescent. Crescent is a real estate investment company that operates office space, residential developments and luxury hotels.

Morgan Stanley acquired Crescent for $6.5 billion in August 2007, including debt. The bank had planned to put Crescent’s assets into real estate investment funds, but markets soon seized up and Morgan was left holding these assets. [ID:nN07382442]

Barclays, which had provided a $2 billion loan to help finance the Crescent deal in 2007, said it acquired the subsidiary in a joint venture with Goff Capital Inc.

Barclays said John Goff, the founder of Goff Capital Partners, a real estate investment firm, would be chairman and chief executive officer of Crescent.

Goff previously led Crescent before its sale to Morgan Stanley in 2007. He co-founded Crescent Real Estate Equities in the early 1990s, leading the company through its initial public offering in 1994. (Reporting by Steve Eder; Editing by Tim Dobbyn)

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