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11/11/2002

iStar Financial Announces Public Offering of Common Stock

NEW YORK, Nov. 11 /PRNewswire-FirstCall/ -- iStar Financial Inc. (NYSE: SFI) today announced that it has commenced an underwritten public offering of 8.0 million shares of its common stock. In addition to the shares offered by iStar Financial, Starwood Opportunity Fund IV, L.P. is proposing to sell 2.0 million shares of common stock owned by the Fund in the offering. The Fund has also agreed to sell up to 1.5 million shares to the underwriters solely to cover over-allotments. The joint lead managing underwriters of the offering are Lehman Brothers Inc. and Merrill Lynch & Co.

iStar Financial plans to use the net proceeds from the offering to repay secured indebtedness. The earnings guidance provided by iStar Financial in its press release issued on October 24, 2002 already assumed the completion of this offering in the fourth quarter of 2002. iStar Financial will not receive any proceeds from the sale of shares by the Fund.

As part of the offering, both iStar Financial and Starwood Opportunity Fund IV, L.P. have agreed not to sell any other shares of common stock for a period of 90 days, subject to customary exceptions. Assuming the underwriters' over-allotment option is exercised in full, the Fund will own approximately 20.1% of iStar Financial's common stock on a diluted basis following the offering (21.6% if the over-allotment option is not exercised).

The offering is being made solely by means of a prospectus supplement and the accompanying prospectuses, copies of which are available from the underwriters for the offering.

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 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. Additional information on iStar Financial is available on the Company's Web site at http://www.istarfinancial.com.

SOURCE iStar Financial Inc.

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

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