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05/02/2008

iStar Financial Announces First Quarter 2008 Results

- Adjusted earnings per diluted common share were $0.87 for the first quarter 2008.

- Total revenues were $422.4 million; up 48% year-over-year.

- Company pays off interim facility used to finance acquisition of Fremont.

- Company to recognize approximately $250 million gain on sale of TimberStar Southwest joint venture.

- Company revises full year 2008 adjusted earnings per diluted common share guidance to $3.20 - $3.60 and diluted GAAP earnings per share of $3.70 - $4.10.

NEW YORK, May 2 /PRNewswire-FirstCall/ -- iStar Financial Inc. (NYSE: SFI), a leading publicly traded finance company focused on the commercial real estate industry, today reported results for the first quarter ended March 31, 2008.

iStar reported adjusted earnings for the quarter of $0.87 per diluted common share. This compares with $0.93 per diluted common share for the first quarter 2007. Adjusted earnings allocable to common shareholders for the first quarter 2008 were $117.4 million on a diluted basis, compared to $118.6 million for the first quarter 2007. Adjusted earnings represent net income computed in accordance with GAAP, adjusted for preferred dividends, depreciation, depletion, amortization, gain (loss) from discontinued operations and ineffectiveness on interest rate hedges.

Net income allocable to common shareholders for the first quarter was $74.2 million, or $0.55 per diluted common share, compared to $81.7 million, or $0.64 per diluted common share for the first quarter 2007. Please see the financial tables that follow the text of this press release for a detailed reconciliation of adjusted earnings to GAAP net income.

Net investment income for the quarter was $186.4 million, compared to $120.5 million for the first quarter 2007. The year-over-year increase was due to growth in the overall loan portfolio, primarily due to the addition of the Fremont assets, as well as the amortization of $28.3 million of Fremont loan portfolio purchase discount recognized in the quarter. Net investment income represents interest income, operating lease income and earnings (loss) from equity method investments, less interest expense, operating costs for corporate tenant lease assets and gain (loss) on early extinguishment of debt.

Consistent with its expectations for slower overall asset growth, the Company announced that during the first quarter it closed four new financing commitments for a total of $101.2 million. Of that amount, $20.7 million was funded during the quarter. In addition, the Company funded $921.4 million under pre-existing commitments and received $1.3 billion in principal repayments. Pursuant to the terms of the Fremont agreement, $0.6 billion of the principal received was utilized for principal reduction on Fremont's A-participation interest.

During the first quarter, the Company recorded $44.2 million in Other Income from a profit participation related to one of its investments. Additionally, the Company completed the sale of two non-strategic corporate tenant lease assets for total proceeds of $8.2 million, net of costs, resulting in a total net book gain of approximately $2.1 million.

For the quarter ended March 31, 2008, the Company generated adjusted return on average common book equity of 20.2%. The Company's equity represented 22.4% of total capitalization at quarter end and its debt to book equity plus accumulated depreciation/depletion and loan loss reserves, each as determined in accordance with GAAP, was 3.5x.

The Company's net finance margin, calculated as the rate of return on assets less the cost of debt, was 4.11% for the quarter. Excluding the impact of the amortization of the Fremont loan portfolio purchase discount, the Company's net finance margin was 3.42% for the quarter, versus 3.16% in the previous quarter.

As of March 31, 2008, a one percentage point increase in short-term rates, excluding the impact of interest floors in certain loan assets, would have increased the Company's adjusted earnings by 1.89%, which is consistent with its match funding policy.

Summary of Capital Markets and Other Initiatives

As of March 31, 2008, the Company had $838.0 million available under $3.9 billion in revolving credit facilities. During the quarter, the Company amended its $500 million senior secured revolving credit facility to allow it to extend its maturity from September 2008 to September 2009. As of March 31, 2008, the Company had $1.3 billion outstanding on its interim facility used to fund the acquisition of Fremont General's commercial real estate lending business. Subsequent to the end of the first quarter, the Company repaid the entire balance of the interim facility.

On May 1, 2008, the Company entered into a $960 million first mortgage financing transaction secured by 34 properties, representing $1.1 billion of net book value and an appraised value of $1.6 billion. The Company has received approximately $810 million of proceeds from the initial closing of the financing and expects to receive the balance of the proceeds prior to the end of the second quarter, subject to the satisfaction of customary real estate closing conditions. The three-year financing is being provided by a major financial institution and is pre-payable in 20 months.

During the first quarter, the Company entered into a $300 million, 364-day term loan secured by collateral within the company's corporate loan and debt portfolio. In addition, the Company completed a $53 million mortgage financing on a small pool of corporate tenant lease assets within its AutoStar portfolio.

As previously announced, on April 1, 2008, the Company closed on the sale of its TimberStar Southwest joint venture and the venture's approximately 900,000-acre portfolio of forestland and related assets for $1.7 billion, including the assumption of debt. TimberStar Southwest purchased the properties in October 2006 for approximately $1.2 billion. iStar received net proceeds of approximately $400 million, representing a gain of approximately $250 million.

Risk Management

At March 31, 2008, first mortgages, participations in first mortgages, senior loans and corporate tenant lease investments collectively comprised 86.4% of the Company's asset base, versus 87.0% in the prior quarter. The Company's loan portfolio consisted of 78.4% floating rate and 21.6% fixed rate loans, with a weighted average maturity of 2.8 years.

The weighted average last dollar loan-to-value ratio for all structured finance assets was 69.5%. At quarter end, the Company's corporate tenant lease assets were 95.6% leased with a weighted average remaining lease term of 11.8 years. At March 31, 2008, the weighted average risk ratings of the Company's structured finance and corporate tenant lease assets were 3.12 and 2.51, respectively, versus 3.07 and 2.50, respectively, in the previous quarter.

On March 31, 2008, the Company had 30 loans on non-performing loan (NPL) status representing $1.1 billion of gross loan value, compared to 31 loans on NPL status representing $1.2 billion of gross loan value in the prior quarter. Gross loan values represent iStar's book value plus Fremont's A-participation interest. During the quarter, the Company took title to three properties that served as collateral on its loans, resulting in $36.5 million of charge-offs against the Company's reserve for loan losses. All of the loans were previously on NPL status and had a gross loan value of $191.5 million, prior to the Company receiving title to the properties.

At the end of the first quarter, the Company had 30 loans on its watch list representing $1.2 billion of gross loan value, compared to 40 loans on its watch list representing $1.6 billion of gross loan value in the prior quarter.

Excluding Fremont's A-participation interest on the associated assets, NPL and watch list assets were $796.9 million and $1.0 billion, respectively, compared to NPL and watch list assets in the prior quarter of $719.4 million and $1.2 billion, respectively. The Company's policy is to stop the accrual of interest on loans placed on NPL status. The Company believes it has adequate collateral and loan loss reserves to support the book value for each of the NPL and watch list assets.

The Company had $252.9 million in loan loss reserves at March 31, 2008 versus $217.9 million at December 31, 2007. During the first quarter, the Company recorded $89.5 million in loan loss provision versus $113.0 million in the prior quarter. The provision reflects the continued deterioration in the overall credit markets and its impact on the Company's portfolio as determined in its regular quarterly risk ratings review process.

The Company's total loss coverage, defined as the combination of loan loss reserves of $252.9 million and remaining purchase discount from the Fremont acquisition of $114.2 million, was $367.1 million or 2.8% of gross loan value at the end of the first quarter. This compares to total loss coverage of $384.7 million or 2.8% of gross loan value in the prior quarter. The Company continues to believe its loss coverage provides adequate protection against future loan losses.

Summary of Fremont Contributions to Quarterly Results

At the end of the first quarter, the Fremont portfolio, including additional fundings made during the quarter, had a gross loan value of $4.9 billion consisting of 193 loans versus $5.4 billion consisting of 221 loans at the end of the fourth quarter 2007.

At the end of the first quarter, the value of Fremont's A-participation interest in the portfolio was $2.4 billion versus $3.0 billion on December 31, 2007. The book value of iStar's B-participation interest at the end of the first quarter was $2.5 billion versus $2.4 billion on December 31, 2007. During the quarter, iStar received $803.6 million in principal repayments of which the Company retained 30%. The balance of principal repayments was paid to Fremont through its participation interest. The weighted average maturity of the portfolio is approximately nine months.

During the first quarter, iStar funded $411.7 million of commitments related to the portfolio. Unfunded commitments at the end of the first quarter were $1.5 billion, of which the Company expects to fund approximately $1.4 billion based upon its comprehensive review of the portfolio. This compares to unfunded commitments of $2.2 billion on December 31, 2007.

At March 31, 2008, there were 20 Fremont loans on NPL status with a gross loan value of $494.1 million versus 23 loans at the prior quarter end, with $825.4 million of gross loan value. In addition, there were 14 loans on the Company's watch list with a gross loan value of $405.4 million versus 25 loans at the prior quarter end, with $733.7 million of gross loan value. Excluding Fremont's A-participation interest on the associated assets, NPL and watch list assets for the Fremont portfolio were $238.1 million and $233.3 million, respectively, versus $351.1 million and $358.5 million in the prior quarter.

Earnings Guidance

Consistent with the Securities and Exchange Commission's Regulation FD and Regulation G, iStar Financial comments on earnings expectations within the context of its regular earnings press releases. For fiscal year 2008, the Company expects diluted adjusted earnings per common share of $3.20 - $3.60, and diluted GAAP earnings per common share of $3.70 - $4.10.

Dividend

On March 7, 2008, iStar Financial declared a regular quarterly dividend of $0.87 per share. The first quarter dividend was paid on April 30, 2008 to shareholders of record on March 17, 2008.

Annual Meeting

The Company will host its Annual Meeting of Shareholders at The Harvard Club of New York City, located at 35 West 44th Street, New York, New York 10036 on Wednesday, May 28, 2008 at 9:00 a.m. ET. All shareholders are cordially invited to attend.

[Financial Tables to Follow]

iStar Financial Inc. is a leading publicly traded finance company focused on the commercial real estate industry. The Company primarily provides custom-tailored investment capital to high-end private and corporate owners of real estate, including senior and mezzanine real estate debt, senior and mezzanine corporate capital, as well as corporate net lease financing and equity. The Company, which is taxed as a real estate investment trust ("REIT"), seeks to deliver strong dividends and superior risk-adjusted returns on equity to shareholders by providing innovative and value added financing solutions to its customers.

iStar Financial will hold a quarterly earnings conference call at 10:00 a.m. ET today, May 2, 2008. This conference call will be broadcast live over the Internet and can be accessed by all interested parties through iStar Financial's website, www.istarfinancial.com, under the "Investor Relations" section. To listen to the live call, please go to the website's "Investor Relations" section at least 15 minutes prior to the start of the call to register, download and install any necessary audio software. For those who are not available to listen to the live broadcast, a replay will be available shortly after the call on the iStar Financial website.

(Note: Statements in this press release which are not historical fact may be deemed forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although iStar Financial Inc. believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from iStar Financial Inc.'s expectations include completion of pending investments, continued ability to originate new investments, the mix of originations between structured finance and corporate tenant lease assets, repayment levels, the timing of receipt of prepayment penalties, the availability and cost of capital for future investments, competition within the finance and real estate industries, economic conditions, loss experience and other risks detailed from time to time in iStar Financial Inc.'s SEC reports.)



    Selected Income Statement Data
    (In thousands)
    (unaudited)

                                                         Three Months Ended
                                                              March 31,
                                                          2008         2007
                                                          ----         ----
    Net investment income (1)                           $186,363     $120,463
    Other income                                          59,890       28,472
    Non-interest expense (2)                            (162,040)     (62,471)
    Minority interest in consolidated entities              (204)         564
                                                        ----------  ----------
    Income from continuing operations                     84,009       87,028

    Income from discontinued operations                      324        5,653
    Gain from discontinued operations                      2,056        1,415
    Preferred dividends                                  (10,580)     (10,580)
                                                        ----------  ----------
    Net income allocable to common shareholders
     and HPU holders (3)                                 $75,809      $83,516
                                                        ==========  ==========
    (1) Includes interest income, operating lease income and earnings (loss)
        from equity method investments, less interest expense, operating costs
        for corporate tenant lease assets and gain (loss) on early
        extinguishment of debt.

    (2) Includes depreciation and amortization, general and administrative
        expenses, provision for loan losses and other expenses.

    (3) HPU holders are Company employees who purchased high performance
        common stock units under the Company's High Performance Unit Program.



    Selected Balance Sheet Data
    (In thousands)
                                                 As of              As of
                                            March 31, 2008   December 31, 2007
                                            --------------   -----------------
                                              (unaudited)

    Loans and other lending investments, net   $10,878,095        $10,949,354
    Corporate tenant lease assets, net          $3,328,210         $3,309,866
    Other investments                             $956,887           $856,609
    Total assets                               $16,112,295        $15,848,298
    Debt obligations                           $12,566,913        $12,399,558
    Total liabilities                          $13,206,823        $12,894,869
    Total shareholders' equity                  $2,851,742         $2,899,481



                             iStar Financial Inc.
                    Consolidated Statements of Operations
                   (In thousands, except per share amounts)
                                 (unaudited)

                                                      Three Months Ended
                                                            March 31,
                                                     2008               2007
                                                     ----               ----
    REVENUES

      Interest income                             $276,100           $180,860
      Operating lease income                        86,439             75,942
      Other income                                  59,890             28,472
                                                  --------           --------
        Total revenues                             422,429            285,274
                                                  --------           --------
    COSTS AND EXPENSES

      Interest expense                             168,215            128,527
      Operating costs - corporate tenant
       lease assets                                  5,363              6,461
      Depreciation and amortization                 25,931             19,921
      General and administrative (1)                42,809             37,550
      Provision for loan losses                     89,500              5,000
      Other expense                                  3,800                  -
                                                  --------           --------
        Total costs and expenses                   335,618            197,459
                                                  --------           --------
      Income from continuing operations
       before other items                           86,811             87,815
        Earnings (loss) from equity method
         investments                                (2,598)            (1,351)
        Minority interest in consolidated
         entities                                     (204)               564
                                                  --------           --------
      Income from continuing operations             84,009             87,028

        Income from discontinued operations            324              5,653
        Gain from discontinued operations            2,056              1,415
                                                  --------           --------
      Net income                                    86,389             94,096
      Preferred dividends                          (10,580)           (10,580)
                                                  --------           --------
      Net income allocable to common
       shareholders and HPU holders                $75,809            $83,516
                                                  ========           ========
      Net income per common share
           Basic                                     $0.55              $0.64
           Diluted (2)                               $0.55              $0.64

      Net income per HPU share
           Basic (3)                               $104.60            $122.00
           Diluted (2) (4)                         $104.20            $120.93


    (1) For the three months ended March 31, 2008 and 2007, includes $4,848
        and $4,409 of stock-based compensation expense, respectively.

    (2) For the three months ended March 31, 2008 and 2007, includes the
        allocable share of $1 and $28 of joint venture income, respectively.

    (3) For the three months ended March 31, 2008 and 2007, $1,569 and $1,830
        of net income is allocable to HPU holders, respectively.

    (4) For the three months ended March 31, 2008 and 2007, $1,563 and $1,814
        of net income is allocable to HPU holders, respectively.



                             iStar Financial Inc.
                        Earnings Per Share Information
                   (In thousands, except per share amounts)
                                 (unaudited)

                                                       Three Months Ended
                                                            March 31,
                                                    2008               2007
                                                    ----               ----
    EPS INFORMATION FOR COMMON SHARES

    Income from continuing operations per
     common share (1)
        Basic                                        $0.54              $0.59
        Diluted (2)                                  $0.54              $0.59

    Net income per common share
        Basic                                        $0.55              $0.64
        Diluted (2)                                  $0.55              $0.64

    Weighted average common shares
     outstanding
        Basic                                      134,262            126,693
        Diluted                                    134,862            127,867

    EPS INFORMATION FOR HPU SHARES

    Income from continuing operations per
     HPU share (1)
        Basic                                      $101.26            $111.66
        Diluted (2)                                $100.93            $110.66

    Net income per HPU share (3)
        Basic                                      $104.60            $122.00
        Diluted (2)                                $104.20            $120.93

    Weighted average HPU shares outstanding
        Basic                                           15                 15
        Diluted                                         15                 15


    (1) For the three months ended March 31, 2008 and 2007, excludes preferred
        dividends of $10,580.

    (2) For the three months ended March 31, 2008 and 2007, includes the
        allocable share of $1 and $28 of joint venture income, respectively.

    (3) As more fully explained in the Company's quarterly SEC filings, three
        plans of the Company's HPU program vested in December 2002, December
        2003 and December 2004. Each of the respective plans contain 5 HPU
        shares. Cumulatively, these 15 shares were entitled to $1,569 and
        $1,830 of net income for the three months ended March 31, 2008 and
        2007, respectively. On a diluted basis, these cumulative 15 shares
        were entitled to $1,563 and $1,814 of net income for the three months
        ended March 31, 2008 and 2007, respectively.



                             iStar Financial Inc.
            Reconciliation of Adjusted Earnings to GAAP Net Income
                   (In thousands, except per share amounts)
                                 (unaudited)

                                                          Three Months Ended
                                                                March 31,
                                                            2008        2007
                                                            ----        ----
      ADJUSTED EARNINGS (1)

      Net income                                          $86,389     $94,096
      Add: Depreciation, depletion and amortization        27,638      21,878
      Add: Joint venture income                                 4          30
      Add: Joint venture depreciation,
       depletion and amortization                           8,625      10,837
      Add: Amortization of deferred financing costs         8,350       6,444
      Add: Hedge ineffectiveness, net                       1,491           -
      Less: Preferred dividends                           (10,580)    (10,580)
      Less: Gain from discontinued operations              (2,056)     (1,415)
                                                         --------    --------
      Adjusted earnings allocable to common
       shareholders and HPU holders:
         Basic                                           $119,857    $121,260
         Diluted                                         $119,861    $121,290

      Adjusted earnings per common share:
         Basic (2)                                          $0.87       $0.94
         Diluted (3)                                        $0.87       $0.93

      Weighted average common shares outstanding:
         Basic                                            134,262     126,693
         Diluted                                          134,862     127,867

      Common shares outstanding at end of period:
         Basic                                            134,406     126,708
         Diluted                                          134,909     127,883

    (1) Adjusted earnings should be examined in conjunction with net income as
        shown in the Consolidated Statements of Operations. Adjusted earnings
        should not be considered as an alternative to net income (determined
        in accordance with GAAP) as an indicator of the Company's performance,
        or to cash flows from operating activities (determined in accordance
        with GAAP) as a measure of the Company's liquidity, nor is this
        measure indicative of funds available to fund the Company's cash needs
        or available for distribution to shareholders.  Rather, adjusted
        earnings is an additional measure the Company uses to analyze how its
        business is performing. It should be noted that the Company's manner
        of calculating adjusted earnings may differ from the calculations of
        similarly-titled measures by other companies.

    (2) For the three months ended March 31, 2008 and 2007, excludes $2,481
        and $2,657 of net income allocable to HPU holders, respectively.

    (3) For the three months ended March 31, 2008 and 2007, excludes $2,471
        and $2,634 of net income allocable to HPU holders, respectively.



                               iStar Financial Inc.
                            Consolidated Balance Sheets
                                  (In thousands)


                                                  As of              As of
                                             March 31, 2008  December 31, 2007
                                             --------------  -----------------
                                               (unaudited)
     ASSETS

     Loans and other lending investments, net   $10,878,095        $10,949,354
     Corporate tenant lease assets, net           3,328,210          3,309,866
     Other investments                              956,887            856,609
     Other real estate owned                        284,134            128,558
     Assets held for sale                            79,163             74,335
     Cash and cash equivalents                      119,404            104,507
     Restricted cash                                 34,135             32,977
     Accrued interest and operating
      lease income receivable                       125,097            141,405
     Deferred operating lease income receivable     107,245            102,135
     Deferred expenses and other assets             156,647            105,274
     Goodwill                                        43,278             43,278
                                             --------------  -----------------
         Total assets                           $16,112,295        $15,848,298
                                             ==============  =================


     LIABILITIES AND SHAREHOLDERS' EQUITY

     Accounts payable, accrued expenses
      and other liabilities                        $639,910           $495,311

     Debt obligations:
       Unsecured senior notes                     7,384,795          7,916,852
       Unsecured revolving credit facilities      2,822,387          2,681,174
       Interim financing facility                 1,289,811          1,289,811
       Secured term loans                           727,156            413,683
       Other debt obligations                       342,764             98,038
                                             --------------  -----------------
         Total liabilities                       13,206,823         12,894,869

     Minority interest in consolidated entities      53,730             53,948
     Shareholders' equity                         2,851,742          2,899,481
                                             --------------  -----------------
         Total liabilities and shareholders'
          equity                                $16,112,295        $15,848,298
                                             ==============  =================


                             iStar Financial Inc.
                           Supplemental Information
                                (In thousands)
                                 (unaudited)

    PERFORMANCE STATISTICS
                                                            Three Months Ended
    Net Finance Margin                                         March 31, 2008
    ------------------                                      ------------------
    Weighted average GAAP yield of loan
     and CTL investments                                            9.64%
    Less: Cost of debt                                             (5.53%)
                                                                -----------
    Net Finance Margin (1)                                          4.11%

    Net Finance Margin Excluding Amortization of Discount
     on Fremont Loans                                               3.42%

    Return on Average Common Book Equity
    ------------------------------------
    Average total book equity                                  $2,875,612
    Less: Average book value of preferred equity                 (506,176)
                                                                -----------
    Average common book equity (A)                             $2,369,436

    Net income allocable to common
     shareholders and HPU holders                                 $75,809
    Net income allocable to common
     shareholders and HPU holders -
     Annualized (B)                                              $303,236

    Return on Average Common Book Equity (B) / (A)                  12.8%

    Adjusted basic earnings allocable to
     common shareholders and HPU holders (2)                     $119,857
    Adjusted basic earnings allocable to
     common shareholders and HPU holders - Annualized (C)        $479,428

    Adjusted Return on Average Common Book Equity (C) / (A)         20.2%

    Expense Ratio
    -------------
    General and administrative expenses (D)                       $42,809
    Total revenue (E)                                            $422,429
    Expense Ratio (D) / (E)                                         10.1%

    (1) Weighted average GAAP yield is the annualized sum of interest income
        and operating lease income (excluding other income), divided by the
        sum of average gross corporate tenant lease assets, average loans and
        other lending investments, average SFAS No. 141 purchase intangibles
        and average assets held for sale over the period.  Cost of debt is the
        annualized sum of interest expense and operating costs-corporate
        tenant lease assets, divided by the average gross debt obligations
        over the period.  Operating lease income and operating costs-corporate
        tenant lease assets exclude SFAS No. 144 adjustments from discontinued
        operations of $334 and $(70), respectively. The Company does not
        consider net finance margin to be a measure of the Company's liquidity
        or cash flows.  It is one of several measures that management
        considers to be an indicator of the profitability of its operations.

    (2) Adjusted earnings should be examined in conjunction with net income as
        shown in the Consolidated Statements of Operations. Adjusted earnings
        should not be considered as an alternative to net income (determined
        in accordance with GAAP) as an indicator of the Company's performance,
        or to cash flows from operating activities (determined in accordance
        with GAAP) as a measure of the Company's liquidity, nor is this
        measure indicative of funds available to fund the Company's cash needs
        or available for distribution to shareholders. Rather, adjusted
        earnings is an additional measure the Company uses to analyze how its
        business is performing. It should be noted that the Company's manner
        of calculating adjusted earnings may differ from the calculations of
        similarly-titled  measures by other companies.



                             iStar Financial Inc.
                           Supplemental Information
                                (In thousands)
                                 (unaudited)

    CREDIT STATISTICS                                       Three Months Ended
                                                              March 31, 2008
                                                            ------------------
    Book debt (A)                                                 $12,566,913

    Book equity                                                    $2,851,742
    Add: Accumulated depreciation/depletion and
     loan loss reserves                                               769,657
                                                                --------------
    Sum of book equity, accumulated depreciation/depletion
     and loan loss reserves (B)                                    $3,621,399

    Book Debt / Sum of Book Equity,
     Accumulated Depreciation/Depletion
     and Loan Loss Reserves (A) / (B)                                    3.5x

    Ratio of Earnings to Fixed Charges                                   1.6x

    Ratio of Earnings to Fixed Charges and
     Preferred Stock Dividends                                           1.5x

    Interest Coverage
    -----------------
    EBITDA (1) (C)                                                   $290,867
    GAAP interest expense (D)                                        $168,215

    EBITDA / GAAP Interest Expense (1)(C) / (D)                          1.7x

    Fixed Charge Coverage
    ---------------------
    EBITDA (1) (C)                                                   $290,867

    GAAP interest expense                                            $168,215
    Add: Preferred dividends                                           10,580
                                                                --------------
    Total GAAP interest expense and preferred dividends (E)          $178,795

    EBITDA / GAAP Interest Expense and
     Preferred Dividends (1) (C) / (E)                                   1.6x

    Covenant Calculation of Fixed Charge Coverage Ratio (2)              1.6x

    RECONCILIATION OF NET INCOME TO EBITDA (1)

    Net income                                                        $86,389
    Add: GAAP interest expense                                        168,215
    Add: Depreciation, depletion and amortization                      27,638
    Add: Joint venture depreciation, depletion and amortization         8,625
                                                                --------------
    EBITDA (1)                                                       $290,867

    (1) EBITDA should be examined in conjunction with net income as shown in
        the Consolidated Statements of Operations. EBITDA should not be
        considered as an alternative to net income (determined in accordance
        with GAAP) as an indicator of the Company's performance, or to cash
        flows from operating activities (determined in accordance with GAAP)
        as a measure of the Company's liquidity, nor is this measure
        indicative of funds available to fund the Company's cash needs or
        available for distribution to shareholders. It should be noted that
        the Company's manner of calculating EBITDA may differ from the
        calculations of similarly-titled measures by other companies.
    (2) This measure, which is a trailing twelve-month calculation and
        excludes the effect of $134.9 million of non-cash impairment charges
        recorded in the fourth quarter of 2007, is consistent with covenant
        calculations included in the Company's unsecured credit facilities;
        therefore, we believe it is a useful measure for investors to
        consider.



                             iStar Financial Inc.
                           Supplemental Information
                                (In thousands)
                                 (unaudited)


      Three Months Ended
      March 31, 2008                   LOANS
                          -------------------------------
                                                  Total/  CORPORATE
                                      Floating   Weighted   TENANT    OTHER
                          Fixed Rate    Rate     Average   LEASING INVESTMENTS
                          ----------  --------  --------- -------- -----------
    Amount funded            $30,942  $845,965   $876,907  $41,477   $23,716
    Weighted average yield (1) 9.92%     7.57%      7.65%   10.10%       N/A
    Weighted average all-in
     spread/margin (bps) (2)     651       490        496      N/A       N/A
    Weighted average first
     $ loan-to-value ratio    54.10%     0.60%      2.49%      N/A       N/A
    Weighted average last
     $ loan-to-value ratio    79.99%    69.41%     69.78%      N/A       N/A




    UNFUNDED COMMITMENTS

    Number of assets with unfunded commitments                          263


    Discretionary commitments                                      $827,998
    Non-discretionary commitments                                 4,175,306
                                                              -------------
    Total unfunded commitments                                   $5,003,304
    Estimated weighted average funding period       Approximately 2.1 years

    UNENCUMBERED ASSETS / UNSECURED DEBT

    Unencumbered assets (A)                                     $15,028,153
    Unsecured debt (B)                                          $11,644,219

    Unencumbered Assets / Unsecured Debt (A) / (B)                     1.3x



      RISK MANAGEMENT STATISTICS
      (weighted average
       risk rating)              2008                    2007
                               --------- -------------------------------------
                               March 31, Dec. 31, Sept. 31, June 30, March 31,
                               --------- -------------------------------------
      Structured Finance Assets
       (principal risk)          3.12       3.07    2.92      2.78      2.64
      Corporate Tenant Lease
       Assets                    2.51       2.50    2.48      2.50      2.45

                                            (1=lowest risk; 5=highest risk)

    (1) Yield on Fremont loans does not take into account income associated
        with the amortization of fees and discounts.

    (2) Represents spread over base rate LIBOR (floating-rate loans) and
        interpolated U.S. Treasury rates (fixed-rate loans) during the
        quarter.



                             iStar Financial Inc.
                           Supplemental Information
                   (In thousands, except per share amounts)
                                 (unaudited)

    LOANS AND OTHER LENDING INVESTMENTS CREDIT STATISTICS

                                                      As of
                                      ---------------------------------------
                                       March 31, 2008       December 31, 2007
                                      ------------------   ------------------
    Value of non-performing loans (1) /
     As a percentage of total gross
      loan value                      $1,052,921   8.04%    $1,193,669   8.71%
    Reserve for loan losses /
     As a percentage of total gross
      loan value                        $252,884   1.93%      $217,911   1.59%
     As a percentage of non-performing
      loans (1)                                   24.02%                18.26%


    RECONCILIATION OF DILUTED GAAP EPS GUIDANCE
    TO DILUTED ADJUSTED EPS GUIDANCE (2)


                                                               Year Ending
                                                            December 31, 2008
                                                            -----------------
    Earnings per diluted common share guidance                $3.70 - $4.10
    Less:  Gains, depreciation and other adjustments, net     $0.10 - $0.90
                                                            -----------------
    Adjusted earnings per diluted common share guidance       $3.20 - $3.60

    (1) Non-performing loans include iStar's book value and Fremont's
        A-participation interest on the associated assets.
    (2) Adjusted earnings should be examined in conjunction with net income as
        shown in the Consolidated Statements of Operations. Adjusted earnings
        should not be considered as an alternative to net income (determined
        in accordance with GAAP) as an indicator of the Company's performance,
        or to cash flows from operating activities (determined in accordance
        with GAAP) as a measure of the Company's liquidity, nor is this
        measure indicative of funds available to fund the Company's cash needs
        or available for distribution to shareholders. Rather, adjusted
        earnings is an additional measure the Company uses to analyze how its
        business is performing. It should be noted that the Company's manner
        of calculating adjusted earnings may differ from the calculations of
        similarly-titled  measures by other companies.



                             iStar Financial Inc.
                           Supplemental Information
                                (In millions)
                                 (unaudited)

    PORTFOLIO STATISTICS AS OF MARCH 31, 2008 (1)

    Security Type
    -------------
    First Mortgages / Senior Loans                    $9,936           61.8%
    Corporate Tenant Leases                            3,951           24.6
    Mezzanine / Subordinated Debt                      1,195            7.4
    Other Investments                                    988            6.2
                                                   ---------       ---------
        Total                                        $16,070          100.0%
                                                   =========       =========
    Collateral Type
    ---------------
    Apartment / Residential                           $3,491           21.7%
    Land                                               2,250           14.0
    Office (CTL)                                       1,766           11.0
    Retail                                             1,607           10.0
    Industrial / R&D                                   1,509            9.4
    Corporate - Real Estate                            1,262            7.9
    Other                                              1,079            6.7
    Entertainment / Leisure                              947            5.9
    Hotel                                                858            5.3
    Mixed Use / Mixed Collateral                         660            4.1
    Corporate - Non-Real Estate                          386            2.4
    Office (Lending)                                     255            1.6
                                                   ---------       ---------
        Total                                        $16,070          100.0%
                                                   =========       =========
    Collateral Location
    -------------------
    West                                              $3,487           21.7%
    Northeast                                          2,898           18.0
    Southeast                                          2,658           16.5
    Mid-Atlantic                                       1,647           10.3
    Various                                            1,205            7.5
    Central                                              952            5.9
    International                                        921            5.7
    Southwest                                            862            5.4
    South                                                780            4.9
    Northcentral                                         409            2.5
    Northwest                                            251            1.6
                                                   ---------       ---------
        Total                                        $16,070          100.0%
                                                   =========       =========

    (1) Figures presented prior to loan loss reserves, accumulated
        depreciation and impact of Statement of Financial Accounting Standards
        No. 141, "Business Combinations."

SOURCE iStar Financial Inc.

CONTACT:
Catherine D. Rice, Chief Financial Officer
or
Andrew G. Backman, Senior Vice President - Investor Relations
both of iStar Financial Inc.
1-212-930-9400
Web site: http://www.istarfinancial.com

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