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02/14/2002

iStar Financial Announces Record Fourth Quarter and Fiscal Year Earnings

NEW YORK, Feb 14, 2002 /PRNewswire-FirstCall via COMTEX/ --

Fourth Quarter 2001 Summary * Return on equity reaches record level of 18.2%. * Adjusted earnings per diluted share increases 5.8% to $0.73 from $0.69 for fourth quarter 2000. * CTL financing volume grows to record level of $203.6 million. Fiscal Year 2001 Summary * Adjusted earnings per diluted share increases 7.9% to $2.88 from $2.67 for fiscal year 2000. * Total revenue grows to $484.2 million. * Total financing volume reaches $1.2 billion.

iStar Financial Inc. (NYSE: SFI) reported that adjusted earnings for the quarter ended December 31, 2001 increased to $0.73 per diluted common share, up from $0.69 per diluted common share for the quarter ended December 31, 2000. Adjusted earnings for fourth quarter 2001 increased 8.2% to $65.0 million on a diluted basis, from $60.1 million for fourth quarter 2000. Adjusted earnings represent GAAP net income before depreciation and amortization. Net income allocable to common shareholders for the fourth quarter grew to $49.5 million, or $0.56 per diluted common share, compared with $46.9 million, or $0.54 per diluted share, in the fourth quarter of 2000.

In the fourth quarter of 2001, iStar Financial achieved a return on average book assets of 6.9% and a record return on average common book equity of 18.2%, while leverage increased slightly to 1.4x book equity. Net investment income for the quarter ended December 31, 2001 increased to $69.2 million, from $66.9 million for the fourth quarter of 2000. Net investment income represents interest and operating lease revenue less interest expense and operating costs for corporate tenant lease assets.

Adjusted earnings for the year ended December 31, 2001 were $255.1 million, or $2.88 per diluted share, compared to $230.7 million, or $2.67 per diluted share for the same period in 2000. Net income allocable to common shareholders for the year ended December 31, 2001 was $193.0 million, or $2.19 per diluted share, compared to $180.7 million, or $2.10 per diluted share for the year 2000.

For the fiscal year ended December 31, 2001, iStar Financial generated record returns on average book assets and average common book equity of 6.9% and 18.1%, respectively, while leverage averaged 1.3x book equity. Net investment income and total revenue both increased to record levels of $272.5 million and $484.2 million for the year ended December 31, 2001, respectively, from $267.3 million and $471.8 million, respectively, for the 2000 period.

iStar Financial announced that during the fourth quarter, it closed nine new financing commitments totaling $315.4 million, of which $214.4 million was funded during the quarter. In addition, the Company funded $62.5 million under eight pre-existing commitments and received $109.5 million in principal repayments. For the year ended December 31, 2001, iStar Financial closed $1.2 billion in new financing commitments and fundings under pre-existing commitments, and received $676.7 million in principal repayments. The Company's recent transactions continue to reflect its core business strategy of originating structured financing transactions for owners of high-quality commercial real estate assets and leading corporations across the United States.

Jay Sugarman, iStar Financial's chairman and chief executive officer, stated, "We are very pleased with our results this quarter and our overall positioning for the coming year. Following our decision to postpone several transactions immediately after September 11, we have been working very hard to redeploy that capital in more favorably priced opportunities. While much of that effort came to fruition toward the end of the fourth quarter, the attractive returns that are now available to us have proven that decision to be a profitable one."

Mr. Sugarman continued, "Our performance in 2001 is a testament to the strength and stability of iStar Financial's business strategy, asset quality and management team. In a challenging environment, we delivered record earnings while protecting the integrity and high quality of our asset base, maintaining one of the best credit track records in the commercial finance industry."

    Selected Income Statement Data
    (In thousands, except per share amounts)
    (unaudited)
                                         Three Months Ended     Year Ended
                                            December 31,       December 31,
                                           2001     2000      2001      2000

    Net investment income                $69,196  $66,912  $272,455  $267,267
    Other income                           6,410    5,290    28,800    17,855
    Non-interest expense                 (17,552) (15,958)  (70,368)  (69,584)
    Net income before minority interest  $58,054  $56,244  $230,887  $215,538

    Minority interest                       $(41)    $(72)    $(218)    $(195)
    Gain on sale of corporate tenant
      lease assets                           742       --     1,145     2,948
    One-time effect of a change in
      accounting principle                    --       --      (282)       --
    Extraordinary loss - early
      extinguishment of debt                  --       --    (1,620)     (705)
    Preferred dividends                   (9,227)  (9,227)  (36,908)  (36,908)
    Net income allocable to common
      shareholders                       $49,528  $46,945  $193,004  $180,678

    Per basic share                        $0.57    $0.55     $2.24     $2.11
    Per diluted share                      $0.56    $0.54     $2.19     $2.10

    Adjusted earnings allocable to
      common shareholders (1)            $64,972  $60,056  $255,132  $230,688
    Per basic share                        $0.74    $0.70     $2.94     $2.69
    Per diluted share                      $0.73    $0.69     $2.88     $2.67

    Dividends per common share           $0.6125  $0.6000   $2.4500   $2.4000

     (1) Adjusted earnings represent GAAP net income to common shareholders
         before depreciation and amortization, and exclude gains on sale of
         corporate tenant lease assets, the one-time effect of a change in
         accounting principle and extraordinary loss on early extinguishment
         of debt.


    Selected Balance Sheet Data
    (In thousands)
    (unaudited)                                   As of              As of
                                               December 31,       December 31,
                                                  2001                2000

    Loans and other lending investments, net   $2,377,763         $2,225,183
    Corporate tenant lease assets, net          1,841,800          1,670,169
    Total assets                                4,374,618          4,034,775
    Debt obligations                            2,495,369          2,131,967
    Total liabilities                           2,588,132          2,240,666
    Total shareholders' equity                  1,783,836          1,787,885

Transaction Volume

In the fourth quarter of 2001, iStar Financial generated $315.4 million in new financing commitments in nine separate transactions. The Company also funded an additional $62.5 million under eight pre-existing financing commitments and received $109.3 million in loan repayments. Mr. Sugarman stated, "Now that pricing and liquidity in the real estate capital markets have belatedly come to reflect the weaker state of the economy, we are seeing the most favorable investment conditions and financing pipeline in the past 18 months. This is particularly true in our corporate tenant leasing and corporate finance product lines. With our corporate customers seeking to streamline their balance sheets and maximize returns on assets in this difficult economic environment, we expect these favorable conditions to persist in the near term."

During the quarter, the weighted average first dollar and last dollar loan-to-value ratio on new loan commitments and follow-on fundings was 12.0% and 66.5%, respectively. This ratio represents the average beginning and ending points for the Company's lending exposure in the aggregate capitalization of the underlying properties or companies it finances. In its corporate leasing business, the Company's new investments this quarter include three transactions with a weighted average lease term of 18.6 years.

Mr. Sugarman commented, "As we noted in prior earnings releases, since the third quarter of 2000, based upon our bearish view of the economy and softening demand for commercial real estate, we have focused on originating first mortgages, corporate tenant leases to investment-grade customers, and corporate loans backed by broadly diversified real estate portfolios with going-concern value and liquidity beyond our collateral. Our fourth quarter financing commitments continue to reflect this outlook: first mortgages and investment-grade corporate tenant leases accounted for 86% of this quarter's new origination activity."

Capital Markets

During the fourth quarter of 2001, Starwood Mezzanine Investors L.P., Starwood Opportunity Fund IV, L.P. and one of their affiliates sold 18.975 million shares of iStar Financial common stock owned by them in an underwritten public offering. The Company did not sell any shares in the offering. As a result of the offering, all of the remaining shares held by the selling stockholders are held by Starwood Opportunity Fund IV, L.P., which owned approximately 38.7% of the Company's common stock on a diluted basis as of December 31, 2001.

Spencer B. Haber, iStar Financial's president and chief financial officer, stated, "This quarter, we successfully reduced the ownership of the Starwood-affiliated shareholders to less than 39% of the Company's diluted sharecount. As importantly, because iStar Financial originally went public through a merger and not an initial public offering, this secondary offering represented our first real opportunity to tell a broad audience of potential equity investors about our Company."

Mr. Haber continued, "Based on the strength of our story, over 90 institutional investors participated in the offering. The large amount of both institutional and retail demand for our stock prompted Starwood to upsize the offering from 15 to 19 million shares (including the green shoe). The offering also substantially increased the float and liquidity for iStar Financial shares. Since the offering, our average daily trading volume has more than doubled."

During the fourth quarter, five leading financial services equity research analysts initiated coverage on the Company. Mr. Haber said, "We now have equity and fixed income research coverage from an impressive group of ten analysts. As part of communicating to a broader audience, this coverage is indispensable, and we appreciate how supportive of our business strategy the analyst community has been."

At December 31, 2001, the Company had $901 million outstanding under $2.2 billion of total credit facilities. Mr. Haber added, "Our balance sheet and liquidity position is as strong as it has ever been in the Company's history. We have just $17 million of debt maturing between now and March 2003, and we have already developed refinancing plans for all of our 2003 maturities. Following September 11, there has been no material change to our capital resources, which are considerable."

Consistent with the Securities and Exchange Commission's Regulation FD, iStar Financial comments on earnings expectations within the context of its regular earnings press releases. The Company currently expects basic and diluted adjusted EPS of $0.75 and $0.73, respectively, for the first quarter of 2002. For the calendar year 2002, iStar Financial currently expects adjusted EPS of $3.07 to $3.09 (basic) and $3.00 to $3.02 (diluted).

Mr. Haber commented, "As of December 31, our in-place net investment margins again improved to record levels of 414 basis points, up sequentially each quarter in 2001 from 360 basis points for the first quarter. As the supplemental origination data attached to this release shows, in 2001 iStar Financial consistently generated the same attractive risk-adjusted returns on invested capital as in prior years."

Mr. Haber concluded, "This year, on $1.2 billion in gross transaction volume, we produced average credit spreads to Treasuries or LIBOR of +789, +508 and +549 basis points on our fixed-rate lending, floating-rate lending and corporate tenant leasing businesses, respectively. These figures compare to 2000 spreads on $1.0 billion of gross volume of +674, +533 and +547 basis points for the same product lines, respectively. Average beginning and ending loan-to-value ratios were also very consistent year-to-year, with the 2001 loans at an average of 26.8% to 72.6% LTV and the 2000 loans at an average of 27.8% to 63.9% LTV. As to corporate tenant leases, the average term on new transactions increased to 17.9 years in 2001 from 16.1 years in 2000."

Credit Risk Management

At December 31, 2001, first mortgages, corporate tenant leases and corporate financing transactions collectively comprised 81.9% of the Company's asset base. The weighted average first and last dollar loan-to-value ratio for all structured finance assets (senior and junior loans) was 31.1% and 69.7%, respectively.

Timothy J. O'Connor, iStar Financial's chief operating officer, stated, "Consistent with our approach to corporate tenant leasing as a financing business, not a real estate business, our primary focus has been on lengthening lease terms. We have consistently mitigated risk by pro-actively extending leases prior to their stated maturities and originating new investments with 15- to 20-year average lease terms." As of December 31, 2001, the weighted average lease term of the Company's corporate tenant leasing portfolio increased to 9.1 years, and the portfolio was 98.4% leased. Lease expirations for 2002 and 2003 represent just 2.2% and 3.4% of fourth quarter annualized total GAAP revenue, respectively.

The Company establishes loss reserves based on a quarterly bottom-up review of each of its 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. Attendance at the quarterly review sessions is mandatory for each of the Company's professional employees. These 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 asset 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. In addition to the ratings system, the Company maintains a "watch list" of assets which require highly pro-active asset management to preserve their current ratings.

Mr. O'Connor commented, "We are very pleased with the performance of our portfolio through this difficult credit environment. During the fourth quarter, we saw steady improvement in the credit quality of our hotel lending business. Our hotel lending business consists of 12 loans accounting for 12.3% of the Company's total book assets. Backing these 12 loans is a broadly diversified portfolio of over 110 hotel properties in more than 75 geographic markets. Based on current interest rates at December 31, these 12 loans had average trailing 12-month and budgeted 2002 debt service coverage of 2.1x and 2.2x, respectively."

Mr. O'Connor continued, "In the fourth quarter, we continued to see an across-the-board rebound in hotel collateral operating performance from the mid-September lows. None of our hotel loans has missed a payment. This quarter, we removed one hotel loan from our credit watch list, and have just one hotel loan remaining on the list. The remaining loan is a $42 million first mortgage which should perform marginally throughout the winter months, but for which our borrower recently posted additional collateral and reserves that should support the asset through this period. We continue to be comfortable with our principal exposure on this asset."

Based upon the Company's fourth quarter 2001 review, the weighted average risk rating of the Company's structured finance assets improved to 2.75 from last quarter's rating of 2.82. The weighted average risk rating for corporate tenant lease assets at the end of the fourth quarter also improved to 2.77 over the prior quarter's rating of 2.92.

The Company currently has three loans and two corporate tenant lease assets on its watch list, with a combined book value of $100.0 million as of December 31, 2001, down from watch list assets with a combined $141.0 million book value at September 30, 2001. The Company is currently comfortable that it has adequate collateral to support the book value for each of the watch list assets.

At quarter end, on-balance sheet accumulated loan loss reserves, cash deposits on corporate tenant leases, and corporate tenant lease depreciation represented approximately 2.43% of the gross book value of the Company's investments (loans and operating leases). As of December 31, 2001, the Company had two assets on non-accrual status with an aggregate gross book value of $6.2 million, or 0.14% of the gross book value of the Company's investments.

In addition to its on-balance sheet reserves, the Company has asset-specific sheet cash reserves, deposits and letters of credit totaling $107 million for its loans and $69 million for its corporate tenant leases. The Company typically requires these reserves and letters of credit to be funded and/or posted at the closing of a transaction in accounts in which the Company has a security interest. These reserve figures do not include additional reserves posted by borrowers for tax and insurance payments on properties collateralizing the Company's loans.

Mr. O'Connor said, "Overall, we are pleased with the continued strong performance of our assets through this cycle. Given improving risk ratings and our reserve balances, we remain very comfortable with our asset quality."

Other Developments

On December 3, 2001, iStar Financial declared a regular quarterly cash dividend of $0.6125 per common share for the quarter ended December 31, 2001. The fourth quarter 2001 dividend, which was paid on December 31, 2001 to holders of record as of December 17, 2001, represents approximately 82.3% of basic adjusted earnings per share for the fourth quarter. iStar Financial's Board of Directors reviews the Company's dividend for potential increase in the first quarter of each fiscal year, applicable to such quarter.

iStar Financial is the largest publicly traded finance company focused exclusively 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 mezzanine and subordinated capital, 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, 2002. This conference call will be broadcast live over the Internet and can be accessed by all interested parties through iStar Financial's Web site, http://www.istarfinancial.com, under the "investor relations" section. To listen to the live call, please go to the Web site'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 Web site.

(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,
                              2001          2000         2001          2000
    Revenue:
      Interest income      $60,914       $70,916     $254,119      $268,011
      Operating lease
        income              52,578        46,100      201,257       185,956
      Other income           6,410         5,290       28,800        17,855
        Total revenue      119,902       122,306      484,176       471,822

    Costs and expenses:
      Interest expense      41,216        46,863      170,121       173,891
      Operating costs --
        corporate tenant
        lease assets         3,080         3,241       12,800        12,809
      Depreciation and
        amortization         9,387         7,939       35,642        34,514
      General and
        administrative       5,420         5,576       24,151        25,706
      Provision for possible
        credit losses        1,750         1,750        7,000         6,500
      Stock-based compensation
        expense                995           693        3,575         2,864
        Total costs and
          expenses          61,848        66,062      253,289       256,284

    Net income before
      minority interest     58,054        56,244      230,887       215,538
        Minority interest     (41)          (72)        (218)         (195)
      Gain on sale of
        corporate tenant
        lease assets           742            --        1,145         2,948
      One-time effect of a
        change in accounting
        principle               --            --        (282)            --
      Extraordinary loss --
        early extinguishments
        of debt                 --            --      (1,620)         (705)
    Net income             $58,755       $56,172     $229,912      $217,586

    Preferred dividends    (9,227)       (9,227)     (36,908)      (36,908)
    Net income allocable to
      common shareholders  $49,528       $46,945     $193,004      $180,678

    Net income per common share:
      Basic                  $0.57         $0.55        $2.24         $2.11
      Diluted                $0.56         $0.54        $2.19         $2.10

    Weighted average common shares outstanding:
      Basic                 86,969        85,731       86,349        85,441
      Diluted               88,888        86,530       88,234        86,151


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

                                      Three Months Ended       Year Ended
                                        December 31,          December 31,
                                      2001       2000      2001        2000

    ADJUSTED EARNINGS PER SHARE:
    Net income                      $58,755    $56,172   $229,912    $217,586
    Add: Depreciation                 9,387      7,939     35,642      34,514
    Add: Joint venture depreciation
      and amortization                1,216      1,039      4,044       3,662
    Add: One-time effect of a change
      in accounting principle            --         --        282          --
    Add: Amortization                 5,329      3,900     20,720      13,140
    Less: Preferred dividends        (9,227)    (9,227)   (36,908)    (36,908)
    Less: (Gain) on sale of corporate
      tenant lease assets              (742)        --     (1,145)     (2,948)
    Add: Extraordinary loss --
      early extinguishment of debt       --         --      1,620         705
    Adjusted earnings allocable to common shareholders:
      Basic                         $64,718    $59,823   $254,167    $229,751
      Diluted                       $64,972    $60,056   $255,132    $230,688

    Adjusted earnings per common share:
      Basic                           $0.74      $0.70      $2.94       $2.69
      Diluted                         $0.73      $0.69      $2.88       $2.67

    Weighted average common shares outstanding:
      Basic                          86,969     85,731     86,349      85,441
      Diluted                        89,185     86,902     88,606      86,523


                             iStar Financial Inc.
                         Consolidated Balance Sheets
                                (In thousands)
                                 (unaudited)

                                                  As of              As of
                                               December 31,       December 31,
                                                   2001               2000
     ASSETS
     Loans and other lending investments,
       net                                      $2,377,763        $2,225,183
     Corporate tenant lease assets, net          1,841,800         1,670,169
     Cash and cash equivalents                      15,670            22,752
     Restricted cash                                17,852            20,441
     Accrued interest and operating
       lease income receivable                      26,688            20,167
     Deferred operating lease income receivable     21,195            10,236
     Deferred expenses and other assets             73,650            65,827
                     Total assets               $4,374,618        $4,034,775

     LIABILITIES AND SHAREHOLDERS' EQUITY
     Accounts payable and other liabilities        $87,538           $52,038
     Dividends payable                               5,225            56,661

     Debt obligations:
       Unsecured senior notes                      609,302           356,510
       Unsecured revolving credit facilities            --           173,450
       Secured revolving credit facilities         900,546           592,349
       Secured term loans                          506,612           349,060
       iStar Asset Receivables secured notes       462,373           588,335
       Other debt obligations                       16,536            72,263
                     Total liabilities          $2,588,132        $2,240,666
     Minority interest                               2,650             6,224
     Shareholders' equity                        1,783,836         1,787,885
                     Total liabilities and
                       shareholders' equity     $4,374,618        $4,034,775


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

    PERFORMANCE  STATISTICS

    Return on Average Book Assets             Three Months Ended   Year Ended
                                                  December 31,    December 31,
                                                     2001             2001

    Adjusted Basic Earnings to Common Shareholders $64,718          $254,167
    Plus: Preferred Dividends                        9,227            36,908
    Adjusted Basic Earnings before
      Preferred Dividends                          $73,945          $291,075
    Adjusted Basic Earnings before
      Preferred Dividends -- Annualized (A)       $295,780          $291,075

    Average Total Book Assets (B)               $4,285,585        $4,204,697

    Return on Average Book Assets (A) / (B)           6.9%              6.9%

    Return on Average Common Book Equity

    Adjusted Basic Earnings to Common Shareholders $64,718          $254,167
    Adjusted Basic Earnings to
      Common -- Annualized (C)                    $258,872          $254,167

    Average Total Book Equity                   $1,802,631        $1,785,861
    Less: Book Value of Preferred Equity          (382,000)         (382,000)
    Average Common Book Equity (D)              $1,420,631        $1,403,861

    Return on Average Common
     Book Equity (C) / (D)                           18.2%             18.1%

    Efficiency Ratio

    General & Administrative Expenses               $5,420           $24,151
    Plus: Stock-Based Compensation Expense             995             3,575
    Total Corporate Overhead (E)                    $6,415           $27,726

    Total Revenue (F)                             $119,902          $484,176

    Efficiency Ratio (E) / (F)                        5.4%              5.7%

    CREDIT STATISTICS

    Book Debt / Equity

    Book Debt (A)                               $2,495,369

    Total Book Equity (B)                       $1,783,836

    Book Debt / Book Equity (A) / (B)                 1.4x

     Interest Coverage

     EBITDA (1) (A)                               $108,657          $436,650

     GAAP Interest Expense (B)                     $41,216          $170,121

     EBITDA / GAAP Interest Expense (A) / (B)         2.6x              2.6x

     Fixed Charge Coverage

     EBITDA (1) (C)                               $108,657          $436,650

     GAAP Interest Expense                         $41,216          $170,121
     Plus: Preferred Dividends                       9,227            36,908
     Total Fixed Charges (D)                       $50,443          $207,029

     EBITDA / Fixed Charges (C) / (D)                 2.2x              2.1x


     FINANCING  VOLUME  SUMMARY  STATISTICS

     Three Months Ended December 31, 2001           LOAN ORIGINATIONS
                                                           Total/
                                                 Floating  Weighted  CORPORATE
                                      Fixed Rate   Rate    Average    LEASING

     Amount Committed                    $8,156  $166,151  $174,307  $203,590
     Weighted Average GAAP Yield         13.08%     7.79%     8.04%    10.52%
     Weighted Average All-In
       Spread/Margin (basis points) (2)   + 899     + 559        --     + 555
     Weighted Average First
       $ Loan-to-Value Ratio              81.0%     10.5%     12.0%        --
     Weighted Average Last
       $ Loan-to-Value Ratio              84.4%     66.1%     66.5%        --


     Year Ended December 31, 2001                   LOAN ORIGINATIONS
                                                           Total/
                                                 Floating Weighted  CORPORATE
                                      Fixed Rate   Rate    Average   LEASING

     Amount Committed                  $349,118  $562,606  $911,724  $276,474
     Weighted Average GAAP Yield         12.83%     8.95%    10.44%    10.67%
     Weighted Average All-In
       Spread/Margin (basis points) (2)   + 789     + 508       --      + 549
     Weighted Average First
       $ Loan-to-Value Ratio              45.8%     15.1%    26.8%         --
     Weighted Average Last
       $ Loan-to-Value Ratio              82.9%     66.3%     72.6%        --

     (1) EBITDA is calculated as total revenue minus the sum of general and
         administrative expenses, provision for possible credit losses,
         stock-based compensation expense and operating costs on corporate
         tenant lease assets.
     (2) Based on average quarterly one-month LIBOR (floating-rate loans) and
         U.S. Treasury rates (fixed-rate loans and corporate leasing
         transactions) during the quarter.


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

     UNFUNDED COMMITMENTS                                As of
                                                   December 31, 2001

     Number of Loans with Unfunded Commitments              9

     Discretionary Commitments                        $31,840
     Non-Discretionary Commitments                    137,467
     Total Unfunded Commitments                      $169,307

     Estimated Weighted Average Funding Period   Approximately 1.1 years


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

    PORTFOLIO STATISTICS AS OF DECEMBER 31, 2001 (1)

    Security Type                                      $                 %
    First Mortgages                                 $1,265             29.3%
    Second Mortgages                                   399              9.2%
    Corporate/Partnership Loans/Other                  663             15.3%
    Corporate Tenant Leases                          1,994             46.2%
                 Total                              $4,321            100.0%

    Collateral Type                                    $                 %
    Office                                          $2,063             47.7%
    Industrial/R&D                                     569             13.2%
    Retail                                             217              5.0%
    Hotel (Lending)                                    539             12.5%
    Hotel (Investment-Grade CTL)                       272              6.3%
    Mixed Use                                          152              3.5%
    Apartment/Residential                              184              4.3%
    Conference/Entertainment                           301              6.9%
    Various                                             24              0.6%
                 Total                              $4,321            100.0%

    Product Line                                       $                 %
    Structured Finance                              $1,049             24.3%
    Corporate Finance                                  516             11.9%
    Portfolio Finance                                  390              9.0%
    Loan Acquisition                                   372              8.6%
    Corporate Tenant Leasing                         1,994             46.2%
                 Total                              $4,321            100.0%

    Collateral Location                                $                 %
    West                                            $1,280             29.6%
    Southwest                                           75              1.7%
    South                                              728             16.9%
    Central                                            356              8.2%
    North Central                                       80              1.9%
    Northeast                                          849             19.7%
    Mid-Atlantic                                       346              8.0%
    Southeast                                          398              9.2%
    Northwest                                          186              4.3%
    Various                                             23              0.5%
                 Total                              $4,321            100.0%

     (1) Figures presented prior to loan loss reserves and accumulated
         depreciation.


                    
SOURCE iStar Financial Inc.

CONTACT:          Spencer B. Haber, President & Chief Financial Officer,
                  +1-212-930-9400, Andrew C. Richardson, Senior Vice President, Capital Markets,
                  +1-212-930-9400, or Erin C. Hart, Associate, Investor Relations,
                  +1-212-930-9400, all of iStar Financial Inc.

URL:              http://www.istarfinancial.com
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