<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
Schedule 13D
Under the Securities Exchange Act of 1934
Amendment No. 1
Grove Real Estate Asset Trust
(Name of Issuer)
Common Shares of Beneficial Interest, par value $0.01 per share
(Title of Class of Securities)
399613-10-8
(CUSIP Number)
Stuart J.M. Breslow
Morgan Stanley Group Inc.
1585 Broadway
New York, New York 10036
(212) 761-4000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 31, 1997
(Date of Earliest Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
(Continued on following pages)
(Page 1 of 10 Pages)
<PAGE> 2
CUSIP NO. 399613-10-8 13D Page 2 of 10 Pages
================================================================================
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Morgan Stanley Group Inc.
IRS #13-283-8811
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |X|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO
ITEM 2(d) or 2(e) |_|
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 70,707
SHARES -------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 707,071
REPORTING -------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
70,707
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
707,071
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
777,778
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* |_|
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.7%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IA, CO, HC
================================================================================
<PAGE> 3
CUSIP NO. 399613-10-8 13D Page 3 of 10 Pages
================================================================================
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Morgan Stanley Asset Management Inc.
IRS #13-3040307
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |X|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO
ITEM 2(d) or 2(e) |_|
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES -------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 707,071
REPORTING -------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
707,071
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
707,071
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* |_|
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.9%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IA, CO
================================================================================
<PAGE> 4
CUSIP NO. 399613-10-8 13D Page 4 of 10 Pages
================================================================================
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Morgan Stanley Real Estate Special Situations Fund I, L.P.
IRS No. Pending
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |X|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO
ITEM 2(d) or 2(e) |_|
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES -------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 214,264
REPORTING -------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
214,264
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
214,264
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* |_|
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.41%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
================================================================================
<PAGE> 5
CUSIP NO. 399613-10-8 13D Page 5 of 10 Pages
================================================================================
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Morgan Stanley Real Estate Special Situations Fund II, L.P.
IRS No. Pending
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |X|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO
ITEM 2(d) or 2(e) |_|
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES -------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 285,686
REPORTING -------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
285,686
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
285,686
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* |_|
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.22%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
================================================================================
<PAGE> 6
CUSIP NO. 399613-10-8 13D Page 6 of 10 Pages
Item 1. Security and Issuer.
This Schedule 13D relates to the common shares of beneficial interests,
par value $0.01 per share ("Common Shares"), of Grove Real Estate Asset Trust
(the "Issuer"). The principal executive offices of the Issuer are located at 598
Asylum Avenue, Hartford, Connecticut 06105.
Item 2. Identity and Background.
This statement is being filed by (i) Morgan Stanley Group Inc., a Delaware
corporation ("MSGI") and an investment adviser registered with the Securities
and Exchange Commission with offices at 1585 Broadway, New York, New York
10036, (ii) Morgan Stanley Asset Management Inc., a Delaware Corporation
("MSAM") and an investment adviser registered with the Securities and Exchange
Commission with offices at 1221 Avenue of the Americas, New York, New York
10020, (iii) The Morgan Stanley Real Estate Special Situations Fund I, L.P.
("MSRESSF I"), a Delaware limited partnership with its office at 1221 Avenue of
the Americas, New York, New York 10020, the general partner of which is MS Real
Estate Special Situations GP Inc., a wholly-owned subsidiary of Mogan Stanley
Group Inc. and (iv) The Morgan Stanley Real Estate Special Situations Fund II,
L.P. ("MSRESSF II"), a Delaware limited partnership with its office at 1221
Avenue of the Americas, New York, New York 10020, the general partner of which
is MS Real Estate Special Situations GP Inc., a wholly-owned subsidiary of
Mogan Stanley Group Inc.
During the last five years, none of MSGI, MSAM, MSRESSF I and MSRESSF II
have been (i) convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors), or (ii) a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with respect to such
laws.
Item 3. Source and Amount of Funds or Other Consideration.
The funds used to acquire the Common Shares were obtained from the
working capital of MSGI. The amount of the consideration for the acquisition by
MSGI is set forth in Item 5. MSAM has not contributed its own assets in
connection with the purchases described herein. MSAM is an investment adviser
to MSRESSF I, MSRESSF II and the Clients (as defined below).
Item 4. Purpose of Transaction.
The purpose of the transaction for which this Amendment No. 1 is being
filed is set Forth in Item 5.
<PAGE> 7
CUSIP NO. 399613-10-8 13D Page 7 of 10 Pages
Item 5. Interest in Securities of the Issuer.
(a)-(b) Incorporated by reference to Items (7)-(11) and (13) of the cover
page. Information regarding the percentage of Common Shares is based on
3,953,435 Common Shares outstanding as of March 31, 1997, which number was
provided by the Issuer.
(c) Pursuant to the Securities Purchase Agreement, dated February 20, 1997 (the
"Securities Purchase Agreement"), a copy of which has been previously filed as
an Exhibit, MSGI acquired 494,949 Common Shares for its benefit and 282,829
Common Shares for the benefit of Public Employees' Retirement Association of
Colorado ("PERA"). The shares were acquired at $9.00 per Common Share,
resulting in an aggregate purchase price of $4,454,541 for the shares acquired
by MSGI.
As of March 31, 1997, (i) MSGI transferred the ownership of 2,143
Common Shares to the general partner of MSRESSF I who in turn contributed the
Common Shares to MSRESSF I, and (ii) MSGI transferred the ownership of 212,121
Common Shares to the sole limited partner of MSRESSF I who in turn contributed
the Common shares to MSRESSF I. Pursuant to an investment management agreement
entered into between MSAM and MSRESSF I as of March 31, 1997, MSAM has been
granted voting and dispositive power with respect to the Common Shares held by
MSRESSF I.
As of March 31, 1997, (i) MSGI transferred the ownership of 2,857 Common
Shares to the general partner of MSRESSF II who in turn contributed the
Common Shares to MSRESSF II and (ii) PERA, as the sole limited partner of
MSRESSF II, transferred the ownership of 282,829 Common Shares to MSRESSF II.
Pursuant to an investement management agreement entered into between MSRESSF II
and MSAM as of March 31, 1997, MSAM has been granted voting and dispositive
power with respect to the Common Shares held by MSRESSF II.
As of April 18, 1997 MSGI transferred the ownership of 197,121 and 10,000
Common Shares, respectively, to two investment management clients of MSAM (the
"Clients"). Pursuant to an investment management agreement between MSAM and
such Clients, respectively, MSAM has been granted voting and dispositive power
with respect to the Common shares held by each Client.
MSGI exercises sole voting and dispositive power with respect to all such
shares of Common Shares that it owns. MSGI through MSAM, its wholly owned
affiliate, exercises voting and dispositive power with respect to the shares
acquired by MSRESSF I, MSRESSF II and the Clients.
Except as disclosed herein, none of MSGI, MSAM, MSRESSF I nor MSRESSF II
has effected any transactions in Common Shares during the preceding 60 days.
Item 6. Contracts, Arrangements, Understandings or Relationships with respect to
Securities of the Issuer.
Pursuant to the Securities Purchase Agreement MSGI has been granted the
right to designate one individual acceptable to the Issuer to be nominated as a
member of the Board of Trust Managers of the Issuer, and the Issuer will
recommend such individual for election to the Board of Trust Managers. MSGI has
<PAGE> 8
CUSIP NO. 399613-10-8 13D Page 8 of 10 Pages
designated an employee of MSAM to be elected as a member of the Board of Trust
Managers of the Issuer.
If MSGI does not have a representative on the Board of Trust Managers of
the Issuer, the Issuer must permit a representative of MSGI to attend, but not
vote, as an observer at each meeting of the Board of Trust Managers or any
committee meeting of the Board of Trust Managers of the Issuer. The right to
designate a person for election to the board or to be an observer is not
transferable to any person other than an affiliate of MSGI.
MSGI has been granted, and MSRESSF I and MSRESSF II and the Clients have
been assigned by MSGI, certain preemptive rights to acquire that portion of
Common Shares (or other securities exchangeable or convertible into Common
Shares or rights or warrants to acquire Common Shares) that are offered by the
Issuer for cash that will permit MSGI, MSRESSF I, MSRESSF II and the Clients
collectively to acquire sufficient Common Shares that they will own in the
aggregate up to 20% of the outstanding shares of Common Shares (or up to 25%
if an offering of Common Shares is for less than $9.00 per share or if the
exercise, conversion or exchange price is less than $9.00 per share).
Pursuant to a Registration Rights Agreement, dated March 14, 1997, by
and among the Issuer, MSGI, PERA and the other stockholders identified therein,
the Issuer is required to effect a shelf registration, subject to certain
conditions, of shares of the Common Shares of the Issuer held by MSGI, MSRESSF I
MSRESSF II and the Clients promptly after September 14, 1997. Moreover, subject
to certain conditions, the shares of Common Shares held by MSGI, MSRESSF I,
MSRESSF II and the Clients may be included in the registration of the Issuer's
Common Shares when the Issuer proposes to register its Common Shares or the
shares of other holders of Common Shares.
Except for the investment management agreement entered into by each of
MSRESSF I, MSRESSF II and the Clients, each of which grants voting and
dispositive control over the Common Shares to MSAM, there exist no contracts,
arrangements, understandings or relations (legal or otherwise) between MSGI,
MSRESSF I, MSRESSF II and the Clients and other persons with respect to
finder's fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss, or the giving or
withholding of proxies.
Item 7. Material to be Filed as Exhibits.
Exhibit 7.1 Agreement of Joint Filing between Morgan Stanley Group
Inc., Morgan Stanley Asset Management Inc., Morgan
Stanley Real Estate Special Situations Fund I, L.P. and
Morgan Stanley Real Estate Special Situations Fund II,
L.P.
Exhibit 7.2 Secretary's Certificate Authorizing Stuart J. M. Breslow
to sign on behalf of Morgan Stanley Group Inc.
<PAGE> 9
CUSIP NO. 399613-10-8 13D Page 9 of 10 Pages
SIGNATURES
After reasonable inquiry, and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: April 8, 1997 MORGAN STANLEY GROUP INC.
By: /s/ Stuart J.M. Breslow
------------------------
Name: Stuart J.M. Breslow
Title: Principal
MORGAN STANLEY ASSET MANAGEMENT INC.
By: /s/ Harold Schaaff
------------------------
Name: Harold Schaaff
Title: Principal
The Morgan Stanley Real Estate Special Situations
Fund I, L.P.
Morgan Stanley Real Estate Special Situations, Inc,
its General Partner
By: /s/ Theodore Bigman
----------------------------------------
Name: Theodore Bigman
Title: Vice President
The Morgan Stanley Real Estate Special Situations
Fund II, L.P.
By: Morgan Stanley Real Estate Special
Situations, Inc, its General Partner
By: /s/ Theodore Bigman
----------------------------------------
Name: Theodore Bigman
Title: Vice President
<PAGE> 10
CUSIP NO. 399613-10-8 13D Page 10 of 10 Pages
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
7.1 Agreement of Joint Filing between Morgan Stanley Group
Inc., Morgan Stanley Asset Management Inc., Morgan
Stanley Real Estate Special Situations Fund I L.P. and The
Morgan Stanley Real Estate Special Situations Fund II L.P.
7.2 Secretary's Certificate Authorizing Stuart J.M. Breslow
to sign on behalf of Morgan Stanley Group Inc.
<PAGE> 1
Exhibit 7.1
AGREEMENT OF JOINT FILING
-------------------------
Morgan Stanley Group Inc. Morgan Stanley Asset Management Inc. The
Morgan Stanley Real Estate Special Situations Fund I, L.P. and The Morgan
Stanley Real Estate Special Situations Fund II, L.P. hereby agree that the
Statement on Schedule 13D to which this agreement is attached as an exhibit, as
well as all future amendments to such Statement, shall be filed jointly on
behalf of each of them. This agreement is intended to satisfy the requirements
of Rule 13d-1 (f)(1)(iii) under the Securities Exchange Act of 1934, as amended.
Dated: April 10, 1997 MORGAN STANLEY GROUP INC.
By: /s/ Stuart J.M. Breslow
------------------------
Name: Stuart J.M. Breslow
Title: Principal
MORGAN STANLEY ASSET MANAGEMENT INC.
By: /s/ Harold J. Schaaff
------------------------
Name: Harold J. Schaaff
Title: Principal
The Morgan Stanley Real Estate Special Situations
Fund I, L.P.
By: /s/
------------------------
Name: Theodore Bigman
Title: Vice President
The Morgan Stanley Real Estate Special Situations
Fund II, L.P.
By: /s/
------------------------
Name: Theodore Bigman
Title: Vice President
<PAGE> 1
SECRETARY'S CERTIFICATE
I, Charlene R. Herzer, a duly elected and acting Assistant Secretary
of Morgan Stanley Group Inc., a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), certify that the following
resolutions were duly and validly adopted by a Consent in Lieu of a Meeting of
the Executive Committee of the Board of Directors of the Corporation dated as of
October 19, 1995 and that such resolutions are in full force and effect on the
date hereof:
RESOLVED, that the resolutions adopted on September 8, 1993 and
April 17, 1995 relating to signatories to certain reports to be filed with
the Securities and Exchange Commission (the "SEC") are superseded in their
entirety by these resolutions and Stuart J. M. Breslow, Robert G. Koppenol
and Edward J. Johnsen are severally authorized and directed to sign on
behalf of the Corporation any reports to be filed under Section 13 and
Section 16 of the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder, with the Securities and Exchange
Commission, such authorizations to cease automatically upon termination of
employment with any affiliate of the Corporation; and
RESOLVED FURTHER, that all actions heretofore taken by Stuart J. M.
Breslow, Robert G. Koppenol and Edward J. Johnsen that are within the
authority conferred by the foregoing resolution are approved, ratified and
confirmed in all respects.
RESOLVED, that any and all actions to be taken, caused to be taken
or heretofore taken by any officer of the Corporation in executing any and
all documents, agreements and instruments and in taking any and all steps
(including the payment of all expenses) deemed by such officer as
necessary or desirable to carry out the intents and purposes of the
foregoing resolutions are authorized, ratified and confirmed.
<PAGE> 2
IN WITNESS WHEREOF, I have hereunto set my name and affixed the seal
of the Corporation as of the 21st day of March, 1997.
/s/ Charlene R. Herzer
----------------------
Charlene R. Herzer
Assistant Secretary
[SEAL]
