Net losses on commercial real estate investments totaling $1 billion, in addition to widening debt-related credit spreads, contributed to Morgan Stanley's overall $177 million net loss for the first quarter.

The firm said that while some lines of business fared well during the first quarter its results were negatively impacted by a $1.5 billion decrease in net revenues related to the tightening of its credit spreads on certain of its long-term debt and net losses of $1 billion on investments in real estate, "amidst the industry-wide decline in this market."

Morgan Stanley also said its asset management unit took a pretax loss of $600 million due to "losses on real estate principal investments in the merchant banking business."

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