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02/14/2001

iStar Financial Announces Record Fourth Quarter and Fiscal Year Earnings

NEW YORK, Feb. 14 /PRNewswire/ -- iStar Financial Inc. (NYSE: SFI) reported that adjusted earnings for the quarter ended December 31, 2000 increased 15% to $0.69 per diluted common share, from $0.60 per diluted share for the quarter ended December 31, 1999. Adjusted earnings for the fourth quarter 2000 totaled $60.1 million on a diluted basis, up 32.6% from $45.3 million for fourth quarter 1999. Adjusted earnings represent GAAP net income before depreciation and amortization. Net income allocable to common shareholders for the fourth quarter grew to $46.9 million, or $0.54 per diluted common share. For the fourth quarter 1999, excluding a one-time, non-cash charge of $94.5 million associated with the Company's acquisition of its external advisor, net income allocable to common shareholders was $36.1 million, or $0.49 per diluted share.

In the fourth quarter of 2000, iStar Financial achieved returns on average book assets and average common book equity of 6.8% and 16.7%, respectively, while leverage remained at 1.2x book equity. Net investment income for the quarter ended December 31, 2000 increased 25.3% to $66.9 million, from $53.4 million for the fourth quarter of 1999. Net investment income represents interest and operating lease revenue less interest expense and operating costs for corporate tenant lease assets. Fourth quarter 2000 total revenue increased 36.7% to $122.3 million, from $89.5 million for the 1999 period.

Adjusted earnings for the year ended December 31, 2000 were $230.7 million, or $2.67 per diluted share, compared to $127.8 million, or $2.07 per diluted share for the same period in 1999. Net income allocable to common shareholders for the year ended December 31, 2000 was $180.7 million, or $2.10 per diluted share. For the same period in 1999, excluding the one-time advisor acquisition charge, net income allocable to common shareholders was $109.5 million, or $1.81 per diluted share.

For the fiscal year ended December 31, 2000, iStar Financial generated returns on average book assets and average common book equity of 6.8% and 16.3%, respectively, while leverage averaged 1.1x book equity. Net investment income and total revenue increased to $267.3 million and $471.8 million for the year ended December 31, 2000, respectively, from $158.6 million and $264.8 million, respectively, for the 1999 period.

iStar Financial announced that during the fourth quarter, it closed seven new financing commitments totaling $237.3 million, $117.3 million of which was funded during the quarter. In addition, the Company funded $12.0 million under six pre-existing commitments and received $157.8 million in principal repayments. For the year ended December 31, 2000, iStar Financial closed over $1 billion in new financing commitments and fundings under pre-existing commitments, and received $523.1 million in principal repayments. The Company's recent transactions continue to reflect its core business strategy of originating and acquiring large-balance, structured lending and corporate leasing transactions secured by high-quality commercial real estate assets in major metropolitan markets across the United States.

Jay Sugarman, iStar Financial's chairman and chief executive officer, commented, "This year, iStar Financial generated record earnings in each quarter, and continued to deliver strong risk-adjusted returns on equity using balance sheet leverage well below that of many other commercial finance companies. More importantly, however, this year we continued our track record of minimizing credit losses through strict risk management and underwriting discipline, and further strengthened our leading franchise in structured real estate finance, providing our customers with over $1 billion in flexible financing solutions. We also continued to add industry-leading investment, capital markets and asset management talent to our fully-integrated team of professionals." Mr. Sugarman added, "Going into the new year, I am as confident in our prospects as at any time in our eight-year history."

Selected Income Statement Data

(In thousands, except per share amounts)

(unaudited)

                                     Three Months Ended        Year Ended
                                        December 31,          December 31,
                                        2000      1999      2000       1999

    Net investment income             $66,912   $53,389   $267,267   $158,604
    Other income                        5,290     4,012     17,855     12,763
    Non-interest expense              (15,958)  (13,369)   (69,584)   (37,964)
    Net income before minority
     interest                         $56,244   $44,032   $215,538   $133,403
    Non-recurring advisor charge          $--  $(94,476)       $--   $(94,476)
    Minority interest                     (72)      (41)      (195)       (41)
    Gain on sale of corporate tenant
     lease assets                          --        --      2,948         --
    Extraordinary loss -- early
     extinguishment of debt                --        --       (705)        --
    Preferred dividends                (9,227)   (7,920)   (36,908)   (23,843)

    Net income allocable to common
     shareholders                      $46,945  $(58,405) $180,678    $15,043

    Per basic share(A)                   $0.55    ($0.80)    $2.11      $0.25
    Per diluted share                    $0.54    ($0.80)    $2.10      $0.25

    Adjusted earnings allocable to
     common shareholders(B)            $60,056   $45,303  $230,688   $127,798
    Per basic share                      $0.70     $0.61     $2.69      $2.19
    Per diluted share                    $0.69     $0.60     $2.67      $2.07

    Dividends                            $0.60     $0.57     $2.40      $1.86

(A) For the quarter and year ended December 31, 1999, net income per basic

        common share excludes 1% of net income allocable to iStar Financial's
        class B shares. On November 4, 1999, the class B shares were exchanged
        for common shares in connection with the Company's acquisition of
        TriNet Corporate Realty Trust and related transactions. The Company
        now has a single class of common shares outstanding.

(B) Adjusted earnings represent GAAP net income before depreciation and

        amortization, and exclude gain on sale of corporate tenant lease
        assets and extraordinary loss on early extinguishment of debt.

Selected Balance Sheet Data

(In thousands)

                                                   As of             As of
                                               December 31,      December 31,
                                                   2000              1999
                                                (unaudited)
    Loans and other lending investments,
     net                                        $2,225,183         $2,003,506
    Real estate subject to operating
     leases, net                                 1,670,169          1,714,284
    Total assets                                 4,034,775          3,813,552
    Debt obligations                             2,131,967          1,901,204
    Total liabilities                            2,240,666          2,009,644
    Total shareholders' equity                   1,787,885          1,801,343

Transaction Volume

In the fourth quarter of 2000, iStar Financial generated $237.3 million in new financing commitments in seven separate transactions, representing a diversified mix of senior mortgage loans, corporate lending transactions and corporate tenant leasing investments. The Company also funded an additional $12.0 million under six pre-existing financing commitments and received $157.8 million in loan repayments. Mr. Sugarman stated, "This quarter, we continued to capitalize on the unsettled conditions in the credit markets by originating senior financings and corporate lease transactions at attractive yields, while minimizing our exposure to a weakening economy. Under the leadership of the investment professionals we added in our ACRE Partners acquisition, the corporate tenant investment platform began to hit its stride this quarter. While loan repayments generally occurred earlier than new investment fundings this quarter, we expect this circumstance to reverse in the first half of 2001."

During the quarter, the weighted average first dollar and last dollar loan-to-value ratio on new lending commitments was 48.4% and 56.9%, respectively. This ratio represents the average beginning and ending points for the Company's lending exposure in the aggregate capitalization of the underlying properties it finances. In its corporate leasing business, the Company's new investments this quarter include three transactions with a weighted average lease term of 13.7 years backed by both investment grade and unrated tenant credits.

Mr. Sugarman commented, "Given the current market environment, in the fourth quarter we continued to focus on investments which are either senior in our borrowers' capital structures or secured by diversified corporate credits. Together with our property-specific mezzanine business line, we continue to target borrowers who are willing to demonstrate substantial equity commitments or excess collateral to backstop our capital."

At year-end 2000, first mortgage assets, corporate tenant lease investments and corporate lending assets comprised 30%, 44% and 17% of the Company's asset base, respectively. The weighted average first and last dollar loan-to-value ratio for all structured finance assets (senior and junior loans) was 25.4% and 71.3%, respectively.

Corporate Tenant Leasing

During the fourth quarter of 2000, the Company executed new leases totaling approximately 1.7 million square feet of corporate office and industrial facilities, with a weighted average term of 12.6 years. Mr. Sugarman commented, "Our overriding objective for the corporate tenant lease business is to continue to extend lease maturities in the former TriNet portfolio and complete new long-term lease investments. By capitalizing on inefficiencies in the way corporate credit risk is often mispriced when it takes the form of a long-term real estate lease, iStar Financial seeks to create excess risk adjusted returns from a diversified pool of corporate credits. A key element of this strategy is to look to credit-backed lease streams and other forms of credit enhancement for a majority of our returns, as opposed to relying on real estate residual values at the end of the lease term. This philosophy is consistent with our maintaining the risk/return profile of a conservatively leveraged finance company, and not of a real estate equity investor."

As of December 31, 2000, the weighted average lease term of the Company's corporate tenant leasing portfolio was 8.5 years, up from 5.6 years at December 31, 1999. This portfolio was 96.2% leased at the end of the fourth quarter 2000 (98.6% excluding a vacant facility currently being marketed for sale).

Since January of 2000, iStar Financial has executed 4.9 million square feet of new and renewed leases with an average term of 11.4 years. Of the leases renewed, approximately 35% represented early renewals on leases with more than 12 months remaining on the primary lease term. During the past year, iStar Financial renewed expiring leases at weighted average lease rates approximately 18.1% higher than those in place prior to the renewals. Remaining lease expirations for 2001 and 2002 now total just 2.8% and 4.9%, respectively, of annualized operating lease revenues (1.4% and 2.5% of total revenue, respectively), down from 12.0% and 12.1% at the time of the TriNet acquisition.

Capital Markets

During the fourth quarter, the Company continued to make progress on expanding its sources of short-term and long-term capital and extending its debt maturities. iStar Financial expanded an existing $675 million secured warehouse facility to $700 million, increased the range of collateral eligible for inclusion in the facility, and extended its final maturity to March 2005 from March 2001. In addition, subsequent to quarter end, iStar Financial closed an additional $700 million secured revolving credit facility with a major commercial bank. Interest rates under the new facility range from LIBOR + 1.40% to LIBOR + 2.15%, depending upon the collateral contributed to the borrowing base. The new facility accepts a broad range of structured finance assets and has a final maturity of January 2005.

Spencer B. Haber, iStar Financial's executive vice president-finance and chief financial officer, commented, "With $2.4 billion of total credit facilities and a long-term liability structure, we believe we have continued to differentiate iStar Financial in terms of the breadth and depth of our access to attractively-priced capital, as well as our match-funding discipline as to both maturities and interest rates. We go into 2001 with a substantial amount of excess liquidity with which to fuel our investment activities."

Mr. Haber continued, "Our balance sheet also remains highly match funded to minimize interest rate risk. Our corporate policy is to manage our net exposure to short-term interest rate fluctuations such that a 100 basis point change in rates impacts adjusted earnings per share by no more than 2.5%. Based on current match funding in place, a 100 basis point move in short-term interest rates should impact adjusted earnings per share by less than 1.5%."

Subsequent to quarter end, Moody's Investors Service upgraded iStar Financial's credit ratings. Moody's upgraded iStar Financial senior unsecured credit rating to Ba1 from Ba2, and the rating on the Company's perpetual preferred stock to Ba3 from B1. Mr. Haber stated, "We are pleased with the Moody's upgrade, and believe that its favorable ratings action reflects the continuing strength of our business strategy and asset base, and particularly our focus on risk mitigation and disciplined underwriting. We also acknowledge Moody's upgrade, coming as it does, at a time when many other lenders are experiencing deteriorating credit conditions. We view this accomplishment as another step toward our continuing objective of an investment grade corporate credit rating, to which we remain firmly committed."

Mr. Haber added, "Our highest priority for 2001 is to expand iStar Financial's presence within the investment and research communities. We have built a solid foundation as to the diversity of our capital sources, as well as our liquidity and match funding objectives. However, we firmly believe that the successful performance of this business across market cycles has yet to be appropriately reflected in our stock price. As a result, our efforts are concentrated on enhancing investor communications and increasing research coverage. As large owners of iStar Financial's stock, all of iStar Financial's employees consider this undertaking to be of paramount importance."

Credit Risk Management

The Company establishes loss reserves based on a quarterly bottom-up review of each of its structured finance and corporate tenant lease assets, as well as using top-down guidance from industry-wide loss data and market trends. On a quarterly basis, the Company conducts a comprehensive credit review, resulting in an individual risk rating assigned to each asset. Directed by Mr. Sugarman and Timothy O'Connor, iStar Financial's executive vice president and chief operating officer, attendance at the quarterly review sessions is mandatory for each of the Company's professional employees. The quarterly meetings are designed to enable management to evaluate and proactively manage asset-specific credit issues and identify credit trends on a portfolio-wide basis as an "early warning system."

During the risk ratings review, each loan is assigned a risk rating from "one" to "five," with a "one" indicating superior credit quality, a "two" signifying better than average credit quality, "three" as an average rating, a "four" indicating that management time and attention is required, and a "five" denoting a problem asset with potential principal risk to the Company. In addition to the ratings system, the Company maintains a "watch list" of assets which are typically rated "four," but which require highly proactive asset management to preserve their current ratings. Each newly originated asset is typically assigned an initial rating of "three" (or average).

Based upon the Company's fourth quarter 2000 review, the weighted average risk rating of the Company's structured finance assets was 2.50, improved from 2.59 for the quarter ended September 30, 2000. The weighted average risk rating for corporate tenant lease assets at year-end was 2.77. The Company has one loan and one corporate tenant lease asset currently on its "watch list," with a combined book value of $39.5 million as of December 31, 2000. The Company remains comfortable that it has adequate collateral to support its book value in both instances.

At year-end, accumulated loss reserves and depreciation represented approximately 1.54% of the gross book value of the Company's owned receivables (loans and operating leases).

Other Developments

On December 15, 2000, iStar Financial declared a regular quarterly cash dividend of $0.60 per common share for the quarter ended December 31, 2000. This dividend represents a 5.3% increase over the $0.57 per share dividend paid for fourth quarter 1999. The fourth quarter 2000 dividend, which was paid on January 12, 2001 to holders of record as of December 29, 2000, represents approximately 85.7% of basic adjusted earnings per share for the fourth quarter.

The Company's current policy is to annually review its dividend in the first quarter of each fiscal year. The Company expects to review its dividend for a potential increase applicable to the first quarter of 2001.

iStar Financial is the leading publicly traded finance company focused on the commercial real estate industry. The Company provides structured financing to private and corporate owners of real estate nationwide, including senior and junior mortgage debt, corporate and mezzanine lending, and corporate net lease financing. The Company, which is taxed as a real estate investment trust, seeks to deliver 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 11:00 a.m. Eastern time today, February 14, 2000. This conference call will be broadcast live over the Internet and can be accessed by all interested parties through iStar Financial's Web site, www.istarfinancial.com, under the "investor information" section. To listen to the live call, please go to the Web site's "investor information" 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 Web site and will remain available for the next sixty days.

(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 availability and cost of capital for future investments, competition within the finance and real estate industries, economic conditions, and other risks detailed from time to time in iStar Financial Inc.'s SEC reports.)

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

                                      Three Months Ended      Year Ended
                                          December 31,        December 31,
                                       2000        1999      2000      1999
    Revenue:
      Interest income                 $70,916     $55,011  $268,011  $209,848
      Operating lease income           46,100      30,460   185,956    42,186
      Other income                      5,290       4,012    17,855    12,763
        Total revenue                 122,306      89,483   471,822   264,797

    Costs and expenses:
      Interest expense                 46,863      29,836   173,891    91,184
      Operating costs - corporate
       tenant lease assets              3,241       2,246    12,809     2,246
      Depreciation and amortization     7,939       6,245    34,514    10,340
      General and administrative        5,576       3,883    25,706     6,269
      Provision for possible credit
       losses                           1,750       1,250     6,500     4,750
      Stock option compensation
       expense                            693         412     2,864       412
      Cost incurred in acquiring
       external advisor                    --      94,476        --    94,476
      Advisory fees                        --       1,579        --    16,193
        Total costs and expenses       66,062     139,927   256,284   225,870

    Net income before minority
     interest                          56,244     (50,444)  215,538    38,927
      Minority interest                   (72)        (41)     (195)      (41)
      Gain on sale of corporate
       tenant lease assets                 --          --     2,948        --
      Extraordinary loss - early
       extinguishment of debt              --          --      (705)       --
    Net income                        $56,172    ($50,485) $217,586   $38,886

    Preferred dividends                (9,227)     (7,920)  (36,908)  (23,843)
    Net income allocable to common
     shareholders                     $46,945    ($58,405) $180,678   $15,043

    Net income per common share:
     Basic(A)                           $0.55      ($0.80)    $2.11     $0.25
     Diluted                            $0.54      ($0.80)    $2.10     $0.25

    Weighted average common shares
     outstanding:
      Basic                            85,731      73,427    85,441    57,749
      Diluted                          86,530      73,427    86,151    60,393

(A) For the quarter and year ended December 31, 1999, net income per basic

        common share excludes 1% of net income allocable to iStar Financial's
        class B shares. On November 4, 1999, the class B shares were exchanged
        for common shares in connection with the Company's acquisition of
        TriNet and related transactions. As a result, the Company now has a
        single class of common shares outstanding.


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

                                        Three Months Ended     Year Ended
                                           December 31,        December 31,
                                         2000      1999      2000      1999
    ADJUSTED EARNINGS PER SHARE:
    Net income                          $56,172  ($50,485) $217,586   $38,886
    Add: Depreciation                     7,939     6,414    34,514    11,016
    Add: Joint venture depreciation       1,039       365     3,662       365
    Add: Amortization                     3,900     1,857    13,140     6,121
    Add: Cost incurred in acquiring
     external advisor                        --    94,476        --    94,476
    Less: Preferred dividends            (9,227)   (7,920)  (36,908)  (23,843)
    Less: Net income allocable to
     Class B shares                          --       (91)       --      (826)
    Less: Gain on sale of corporate
     tenant lease assets                     --        --    (2,948)       --
    Add: Extraordinary loss - early
     extinguishment of debt                  --        --       705        --
    Adjusted earnings allocable to
     common shareholders:
      Basic                             $59,823   $44,616  $229,751  $126,195
      Diluted                           $60,056   $45,303  $230,688  $127,798

    Adjusted earnings per common share:
      Basic(A)                            $0.70     $0.61     $2.69     $2.19
      Diluted                             $0.69     $0.60     $2.67     $2.07

    Weighted average common shares
     outstanding:
      Basic                              85,731    73,427    85,441    57,749
      Diluted                            86,902    75,348    86,523    61,750

(A) For the quarter and year ended December 31, 1999, net income per basic

        common share excludes 1% of net income allocable to iStar Financial's
        class B shares. On November 4, 1999, the class B shares were exchanged
        for common shares in connection with the Company's acquisition of
        TriNet and related transactions. As a result, the Company now has a
        single class of common shares outstanding.


                             iStar Financial Inc.
                         Consolidated Balance Sheets
                                (In thousands)

                                                   As of             As of
                                               December 31,      December 31,
                                                   2000               1999
                                               (unaudited)
     ASSETS

     Loans and other lending investments,
      net                                       $2,225,183        $2,003,506
     Real estate subject to operating
      leases, net                                1,670,169         1,714,284
     Cash and cash equivalents                      22,752            34,408
     Restricted cash                                20,441            10,195
     Marketable securities                              41             4,344
     Accrued interest and operating lease
      income receivable                             20,167            16,211
     Deferred operating lease income
      receivable                                    10,236             1,147
     Other assets                                   65,786            29,457
                  Total assets                  $4,034,775        $3,813,552

     LIABILITIES AND SHAREHOLDERS' EQUITY

     Accounts payable and other
      liabilities                                  $52,038           $54,773
     Dividends payable                              56,661            53,667

     Debt obligations:
             Unsecured senior notes                356,509           353,520
             Unsecured revolving credit
              facilities                           173,450           186,700
             Secured revolving credit
              facilities                           592,349           762,936
             Secured term loans                    349,060           559,288
             iStar Asset Receivables
              secured notes                        588,334                --
             Other debt obligations                 72,265            38,760
                  Total liabilities             $2,240,666        $2,009,644
     Minority interest                               6,224             2,565
     Shareholders' equity                        1,787,885         1,801,343
                  Total liabilities and
                   shareholders' equity         $4,034,775        $3,813,552


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

    PERFORMANCE STATISTICS
                                            Three Months Ended    Year Ended
    Return on Average Book Assets               December 31,      December 31,
                                                   2000              2000
    Adjusted Basic Earnings to Common
     Shareholders                                 $59,823           $229,751
    Plus: Preferred Dividends                       9,227             36,908
    Adjusted Basic Earnings before
     Preferred Dividends                          $69,050           $266,659
    Adjusted Basic Earnings before
     Preferred Dividends - Annualized (A)        $276,200           $266,659

    Average Total Book Assets (B)              $4,054,751         $3,924,164

    Return on Average Book Assets (A)/(B)             6.8%               6.8%

    Return on Average Common Book Equity

    Adjusted Basic Earnings to Common
     Shareholders                                 $59,823           $229,751
    Adjusted Basic Earnings to Common
     - Annualized (C)                            $239,292           $229,751

    Average Total Book Equity                  $1,815,882         $1,794,614
    Less: Book Value of Preferred Equity         (382,000)          (382,000)
    Average Common Book Equity (D)             $1,433,882         $1,412,614

    Return on Average Common Book Equity(C)/(D)      16.7%              16.3%

    Efficiency Ratio

    General & Administrative Expenses              $5,576            $25,706
    Plus: Stock Option Compensation
     Expense                                          693              2,864
    Total Corporate Overhead (E)                   $6,269            $28,570

    Total Revenue (F)                            $122,306           $471,822

    Efficiency Ratio (E)/(F)                          5.1%               6.1%

    CREDIT STATISTICS
                                                                    As of
    Book Debt/Equity                                             December 31,
                                                                     2000

    Book Debt (A)                                                 $2,131,967

    Total Book Equity (B)                                          1,787,885

    Book Debt/Book Equity (A)/(B)                                        1.2x


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

     CREDIT STATISTICS             Three Months Ended           Year Ended
                                   December 31, 2000         December 31, 2000
     Interest Coverage

     EBITDA(a) (A)                      $111,046                  $423,943

     GAAP Interest
      Expense (B)                        $46,863                  $173,891

     EBITDA/GAAP
      Interest Expense (A)/(B)               2.4x                      2.4x

     Fixed Charge Coverage

     EBITDA(a) (C)                      $111,046                  $423,943

     GAAP Interest
      Expense                            $46,863                  $173,891
     Plus: Preferred
      Dividends                            9,227                    36,908
     Total Fixed Charges (D)             $56,090                  $210,799

     EBITDA/Fixed
      Charges (C)/(D)                        2.0x                      2.0x

     FINANCING VOLUME SUMMARY STATISTICS

     Three Months Ended                  LOAN ORIGINATIONS
      December 31, 2000
                                                         Total/
                                          Floating      Weighted     CORPORATE
                            Fixed Rate      Rate        Average(b)    LEASING
     Amount Committed        $15,000      $98,374       $113,374     $123,932
     Amount Funded           $15,000      $60,000        $75,000      $42,305
     Weighted Average
      GAAP Yield               19.18%       12.86%         13.70%       10.14%
     Weighted Average
      All-In Spread/Margin
      (basis points)(c)       +1,329         +621             --         +456
     First $ Loan-to-Value
      Ratio                     26.3%        51.7%          48.4%          --
     Last $ Loan-to-Value
      Ratio                     37.7%        59.8%          56.9%          --

     Year Ended December 31, 2000           LOAN ORIGINATIONS

                                                         Total/
                                         Floating       Weighted    CORPORATE
                           Fixed Rate      Rate         Average(b)   LEASING
     Amount Committed       $275,330     $464,475       $739,805    $222,246
     Amount Funded          $270,330     $400,930       $671,260    $128,797
     Weighted Average
      GAAP Yield               12.81%          74%         12.14%      11.47%
     Weighted Average All-In
      Spread/Margin
      (basis points)(c)         +674         +533             --        +547
     First $ Loan-to-Value
      Ratio                     32.7%        24.9%          27.8%         --
     Last $ Loan-to-Value
      Ratio                     75.3%        57.1%          63.9%         --

(a) EBITDA is calculated as total revenue minus the sum of general and

        administrative expenses, provision for possible credit losses, stock
        option compensation expense and operating costs on corporate tenant
        lease assets.

(b) Weighted average based on amount committed.

(c) Based on average quarterly one-month LIBOR (floating rate loans) and

U.S. Treasury rates (fixed rate loans) during the quarter.

                             iStar Financial Inc.
                           Supplemental Information
        (as of and for the three-month period ended December 31, 2000)
                                (In thousands)
                                 (unaudited)

    UNFUNDED COMMITMENTS                                           As of
                                                            December 31, 2000

    Number of Loans with Unfunded Commitments                           9

    Discretionary Commitments                                     $83,518
    Non-Discretionary Commitments                                  67,570
    Total Unfunded Commitments                                   $151,088

    Estimated Weighted Average
     Funding Period                                 Approximately 2 years


                             iStar Financial Inc.
                           Supplemental Information
        (as of and for the three-month period ended December 31, 2000)
                                (In thousands)
                                 (unaudited)

    PORTFOLIO STATISTICS AS OF DECEMBER 31, 2000 (A)

    Security Type                                      $                 %
    First Mortgages                                 $1,191             30.1%
    Second Mortgages                                   340              8.6%
    Corporate/Partnership Loans/Other                  688             17.4%
    Corporate Tenant Leases                          1,737             43.9%
                 Total                              $3,956            100.0%

    Collateral Type                                    $                 %
    Office                                          $1,919             48.5%
    Industrial/R&D                                     402             10.2%
    Retail                                             115              2.9%
    Hotel                                              798             20.2%
    Mixed Use                                          146              3.7%
    Apartment/Residential                              270              6.8%
    Homebuilder/Land                                   128              3.2%
    Resort/Entertainment                               178              4.5%
                 Total                              $3,956            100.0%

    Product Line                                       $                 %
    Structured Finance                                $948             24.0%
    Portfolio Finance                                  371              9.4%
    Loan Acquisition                                   479             12.1%
    Corporate Lending                                  421             10.6%
    Corporate Tenant Leasing                         1,737             43.9%
                 Total                              $3,956            100.0%

    Collateral Location                                $                 %
    West                                            $1,251             31.6%
    Southwest                                          100              2.5%
    South                                              644             16.3%
    Central                                            277              7.0%
    North Central                                       71              1.8%
    Northeast                                          678             17.1%
    Mid-Atlantic                                       361              9.1%
    Southeast                                          395             10.0%
    Northwest                                          179              4.6%
                 Total                              $3,956            100.0%

(A) Figures presented prior to loan loss reserves and accumulated

depreciation. SOURCE iStar Financial Inc.

CONTACT: Spencer B. Haber, Exec. Vice President and CFO, or Lianne A. Merchant, Vice President, Investor Relations, both of iStar Financial Inc., 212-930-9400/

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