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02/06/2003

iSTAR Financial Announces Record Fourth Quarter and Fiscal Year Results

Fourth Quarter 2002 Summary - Adjusted earnings per diluted share increases to $0.77. - Net investment income hits record high of $80.0 million, up 19% from fourth quarter 2001. - Return on average book equity reaches 18.9%. - First mortgages and investment grade corporate tenant lease transactions comprise 82% of fourth quarter financing commitments. - Tangible book equity surpasses $2.0 billion as Company successfully completes public offering of 8.0 million common shares. Fiscal Year 2002 Summary - Adjusted earnings per diluted share rises to $3.03. - Full-year net asset growth reaches record $1.2 billion. - Return on average book equity reaches record 18.4%. - Company receives investment-grade senior unsecured credit rating from Fitch Ratings. - Standard & Poor's and Moody's Investors Service raise iStar Financial's ratings outlook to "positive" for a move to investment grade. - Asset quality remains strong despite economic downturn and softer commercial real estate markets.

NEW YORK, Feb 6, 2003 /PRNewswire-FirstCall via COMTEX/ -- iStar Financial Inc. (NYSE: SFI) reported that adjusted earnings for the quarter ended December 31, 2002 were $0.77 per diluted share, up from $0.73 per diluted share for the quarter ended December 31, 2001. Adjusted earnings for fourth quarter 2002 were $74.3 million on a diluted basis, compared to $65.0 million for fourth quarter 2001. Adjusted earnings represents net income to common shareholders, computed in accordance with GAAP, before depreciation, amortization, gain (loss) from discontinued operations, extraordinary items and cumulative effect of change in accounting principle.

Net income allocable to common shareholders for the quarter was $53.7 million, or $0.56 per diluted share, compared with $49.5 million, or $0.56 per diluted share, in fourth quarter 2001. Please see the financial tables which follow the text of this press release for a detailed reconciliation of adjusted earnings to GAAP net income.

In the fourth quarter of 2002, iStar Financial achieved a return on average book assets of 6.1% and a return on average common book equity of 18.9%, while leverage decreased to 1.7x book equity. Net investment income for the quarter ended December 31, 2002 increased to a record $80.0 million, up 19.2% from $67.1 million for the fourth quarter of 2001. Net investment income represents interest income, operating lease revenue and equity in earnings from joint ventures and unconsolidated subsidiaries, less interest expense and operating costs for corporate tenant lease assets.

Adjusted earnings for the year ended December 31, 2002 were $281.7 million, or $3.03 per diluted share, excluding a $15.0 million non-cash charge related to performance-based vesting of restricted shares granted under the Company's long-term incentive plan, compared to $255.1 million, or $2.88 per diluted share for the same period in 2001. Net income allocable to common shareholders for the year ended December 31, 2002 was $178.4 million, or $1.93 per diluted share, compared to $193.0 million, or $2.19 per diluted share for the year 2001.

For the fiscal year ended December 31, 2002, iStar Financial generated returns on average book assets and average common book equity of 6.4% and 18.4%, respectively, while leverage was 1.7x book equity. Net investment income and total revenue both increased to record levels of $299.8 million and $525.7 million for the year ended December 31, 2002, respectively, from $264.7 million and $471.1 million, respectively, for the 2001 period.

iStar Financial announced that during the fourth quarter, it closed 15 new financing commitments for a total of $469.1 million, of which $428.2 million was funded during the quarter. In addition, the Company funded $3.7 million under four pre-existing commitments and received $196.7 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 for the quarter and the year. Given the continued weak macroeconomic and uncertain geopolitical environment, our investment strategy this quarter continued to emphasize risk mitigation and capital preservation, with first mortgages and investment-grade sale/leasebacks representing 82% of the quarter's origination volume. We enter 2003 with a strong balance sheet and liquidity position, and our investment pipeline remains very active."

Mr. Sugarman continued, "During 2002, we produced a record $1.2 billion in net asset growth, continued to generate attractive risk-adjusted returns for our shareholders, and did so without excessive leverage. Our record growth during this unsettled economic period is a testament to our market-leading franchise in structured finance and our reputation for providing customers with a reliable, responsive and intelligent source of capital."


     Selected Income Statement Data
     (In thousands, except per share amounts)
     (unaudited)
                                         Three Months Ended    Year Ended
                                            December 31,       December 31,
                                           2002     2001      2002      2001

    Net investment income                $79,963  $67,072  $299,823  $264,667
    Other income                           6,731    7,164    27,993    31,057
    Non-interest expense                 (23,677) (17,486) (104,518)  (70,136)
    Net income before minority interest  $63,017  $56,750  $223,298  $225,588

    Minority interest in
     consolidated entities                   (40)     (41)     (162)     (218)
    Income from discontinued operations       (1)   1,304     3,583     5,299
    Gain (loss) from discontinued operations  --      742       717     1,145
    Extraordinary loss on early
     extinguishment of debt                   --       --   (12,166)   (1,620)
    One-time effect of a change in
     accounting principle                     --       --        --      (282)
    Preferred dividends                   (9,227)  (9,227)  (36,908)  (36,908)
    Net income allocable to
     common shareholders                 $53,749  $49,528  $178,362  $193,004

     Selected Balance Sheet Data
     (In thousands)
                                                   As of            As of
                                                December 31,    December 31,
                                                   2002              2001
                                                (unaudited)

    Loans and other lending investments, net     $3,050,342       $2,377,763
    Corporate tenant lease assets, net            2,291,805        1,781,565
    Total assets                                  5,611,697        4,380,640
    Debt obligations                              3,461,590        2,495,369
    Total liabilities                             3,583,816        2,590,212
    Total shareholders' equity                    2,025,300        1,787,778

Transaction Volume

In the fourth quarter of 2002, iStar Financial generated $469.1 million in new financing commitments in 15 separate transactions. The Company also funded an additional $3.7 million under four pre-existing financing commitments and received $196.7 million in loan repayments. Of the Company's fourth quarter financing commitments, 82% represented first mortgages and investment-grade corporate tenant leasing transactions.

During the quarter, the weighted average first dollar and last dollar loan-to-value ratio on new loan commitments was 26.7% and 73.4%, 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.

Mr. Sugarman commented, "We continue to find attractive places to put capital to work on behalf of our customers. The fourth quarter's business brings total 2002 gross originations to a record $1.8 billion, which represents a strong performance by our entire investment team. After $625 million in loan repayments and asset sales during the year, we generated net asset growth of $1.2 billion, also a record."

Capital Markets

During the fourth quarter of 2002, the Company successfully raised 8.0 million shares of primary common equity in a public offering, generating $203.4 million in net proceeds. The Company used these proceeds to repay outstanding borrowings under its secured credit facilities. In connection with the Company's offering, Starwood Opportunity Fund IV, L.P. also sold 3.5 million shares of common stock, reducing its ownership to approximately 19.8% of the Company's common stock on a diluted basis as of December 31, 2002.

Catherine D. Rice, iStar Financial's chief financial officer, stated, "This quarter, we increased our already substantial tangible equity capital base to $2.0 billion. Our recently-completed equity offering also enabled us to broaden our shareholder base and familiarize potential new investors with the Company. We will continue to be proactive in educating the investment community about the merits of our Company."

Subsequent to year end, iStar Financial extended the final maturity of one of its $700 million secured credit facilities to January 2007 from January 2005.

Ms. Rice continued, "We enter 2003 with very strong capital resources and liquidity and a solid balance sheet. We already have refinancing plans in place for the relatively small number of debt maturities this year, and our number one priority is to achieve investment-grade ratings from Moody's and S&P." At December 31, 2002, the Company had $1.3 billion outstanding under its five primary credit facilities, which total $2.7 billion in committed capacity.

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. For fiscal year 2003, the Company currently continues to expect diluted adjusted EPS of $3.22-$3.28. iStar Financial also expects diluted adjusted EPS for the first quarter of $0.77-$0.78.

Ms. Rice commented, "As the supplemental origination data attached to this release shows, in 2002 iStar Financial consistently generated the same attractive risk-adjusted returns on invested capital as in prior years. Specifically, on the $1.8 billion in gross transaction volume this year which was comprised of 59.9% first mortgages, 24.6% corporate tenant leases and 15.5% subordinate financing, we produced weighted average credit spreads to Treasuries or LIBOR of +614 basis points. These figures compare to $1.2 billion of gross volume in 2001 comprised of 50.2% first mortgages, 23.3% corporate tenant leases and 26.5% subordinate financing with weighted average credit spreads of +600 basis points."

Ms. Rice continued, "Average beginning and ending loan-to-value ratios improved year-to-year, with the 2002 loans at an average of 16.2% to 68.4% LTV and the 2001 loans at an average of 26.8% to 72.6% LTV."

As previously announced, for the first quarter of fiscal year 2003, the Company currently expects to increase its dividend by 5.2%, from $0.63 per share to $0.6625 per share. This expectation is based upon the Company's current forecast for its results of operations for that period. Actual results may differ due to the factors discussed elsewhere in this press release, and dividends are only payable upon declaration by the Company's Board of Directors.

For fiscal 2003, the Company's dividend payout ratio should range from approximately 78%-80%, based on expected basic adjusted EPS of $3.32-$3.38 per share and assuming the increased dividend is paid for each quarter of 2003.

Risk Management

At December 31, 2002, first mortgages, corporate tenant leases and corporate financing transactions collectively comprised 87.6% 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 27.2% and 68.3%, respectively. The weighted average debt service coverage for all structured finance assets, based on actual 2002 cash flow and current interest rates, was 2.2x at December 31, 2002.

At quarter end, the Company's corporate tenant lease assets were 96.1% leased with a weighted average remaining lease term of 9.4 years. Corporate tenant lease expirations for 2003 represent 2.1% of annualized total revenue for fourth quarter 2002. At quarter end, 87.2% of the Company's corporate lease customers were public companies (or subsidiaries of public companies).

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 and performance well above our underwriting, a "two" signifying better than average credit quality and performance above our underwriting, "three" as an average rating and performance in line with our underwriting, a "four" indicating that management time and attention is required and performance below our underwriting, and a "five" denoting a potential problem asset and performance well below our underwriting. In addition to the ratings system, the Company maintains a "watch list" of assets which require highly proactive asset management to preserve their current ratings.

Based upon the Company's fourth quarter 2002 review, the weighted average risk rating of the Company's structured finance assets improved, to 2.75 from last quarter's rating of 2.81. The weighted average risk rating for corporate tenant lease assets at the end of the fourth quarter also improved, to 2.76 from the prior quarter's rating of 2.80.

For the fourth quarter, the Company added two loans and removed one corporate tenant lease asset from its credit watch list. The Company now has four loans and two corporate tenant lease assets on the list, with a combined book value of $107.6 million as of December 31, 2002, down from $137.3 million at September 30, 2002. The Company is currently comfortable that it has adequate collateral to support the book value for each of the watch list assets.

At year end, accumulated loan loss reserves and other asset-specific credit protection represented an aggregate of approximately 6.22% of the gross book value of the Company's loans. In addition, cash deposits, letters of credit, allowances for doubtful accounts and accumulated depreciation relating to corporate tenant lease assets represented 9.06% of the gross book value of the Company's corporate tenant lease assets at year end. As of December 31, 2002, the Company had three assets on non-accrual status with an aggregate gross book value of $11.1 million, or 0.2% of the gross book value of the Company's investments, up from $5.5 million at September 30, 2002. Each of the Company's three non-accrual assets continues to pay as agreed.

Timothy J. O'Connor, iStar Financial's chief operating officer, stated, "Seven quarters into an economic slowdown and a weaker commercial real estate environment, our asset quality remains strong. Our proactive risk management strategy, diverse asset base and asset-specific reserves have served us well in this environment. As the economy recovers and real estate fundamentals improve later this year, we look forward to continuing to demonstrate the credit strength that has been the hallmark of our business over the years."

Other Developments

On December 2, 2002, iStar Financial declared a regular quarterly cash dividend of $0.63 per common share for the quarter ended December 31, 2002. The fourth quarter 2002 dividend, which is payable on December 30, 2002 to holders of record as of December 16, 2002, represents approximately 79.7% of basic adjusted earnings per share for the fourth quarter.

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 a strong dividend 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 11:00 a.m. EST today, February 6, 2003. 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 Statements of Operations
                   (In thousands, except per share amounts)
                                 (unaudited)

                                       Three Months Ended     Year Ended
                                          December 31,        December 31,
                                         2002      2001      2002       2001
     Revenue:
        Interest income                $68,572   $60,914  $255,631   $254,119
        Operating lease income          65,018    48,683   242,100    185,943
        Other income                     6,731     7,164    27,993     31,057
          Total revenue                140,321   116,761   525,724    471,119

     Costs and expenses:
        Interest expense                49,440    41,177   185,375    169,974
        Operating costs - corporate
         tenant lease assets             4,108     3,058    13,755     12,782
        Depreciation and amortization   12,943     9,321    47,821     35,411
        General and administrative       7,601     5,420    30,449     24,151
        General and administrative -
         stock-based compensation
         expense                           633       995    17,998      3,574
        Provision for loan losses        2,500     1,750     8,250      7,000
          Total costs and expenses      77,225    61,721   303,648    252,892

     Net income before other items      63,096    55,040   222,076    218,227
          Equity in earnings from
           joint ventures and
           unconsolidated subsidiaries     (79)    1,710     1,222      7,361
          Minority interest in
           consolidated entities           (40)      (41)     (162)      (218)
          Income from discontinued
           operations                       (1)    1,304     3,583      5,299
          Gain (loss) from
           discontinued operations          --       742       717      1,145
          Extraordinary loss on early
           extinguishment of debt           --        --   (12,166)    (1,620)
          One-time effect of a change
           in accounting principle          --        --        --       (282)
     Net income                         62,976    58,755   215,270    229,912

     Preferred dividends                (9,227)   (9,227)  (36,908)   (36,908)
     Net income allocable to
      common shareholders              $53,749   $49,528  $178,362   $193,004

     Net income per common share:
          Basic                          $0.57     $0.57     $1.98      $2.24
          Diluted                        $0.56     $0.56     $1.93      $2.19

     Weighted average common shares
      outstanding:
          Basic                         93,671    86,969    89,886     86,349
          Diluted                       96,353    88,888    92,649     88,234


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

                                    Three Months Ended        Year Ended
                                        December 31,          December 31,
                                      2002       2001       2002        2001
     ADJUSTED EARNINGS:(1)
     Net income                     $62,976    $58,755   $215,270    $229,912
     Add: Joint venture income          249        254        991         965
     Add: Depreciation               12,988      9,387     48,041      35,642
     Add: Joint venture
      depreciation and amortization   1,042      1,216      4,433       4,044
     Add: Amortization                6,258      5,329     23,460      20,720
     Add: Extraordinary loss -
      early extinguishment of debt       --         --     12,166       1,620
     Add: One-time effect of a
      change in accounting principle     --         --         --         282
     Less: Preferred dividends       (9,227)    (9,227)   (36,908)    (36,908)
     Less: (Gain) loss from
      discontinued operations            --       (742)      (717)     (1,145)
     Adjusted diluted earnings
      allocable to common shareholders:
        Before non-cash incentive
         compensation charge        $74,286    $64,972   $281,686    $255,132
        After non-cash incentive
         compensation charge        $74,286    $64,972   $266,736    $255,132

     Adjusted earnings per
      diluted common share:
        Before non-cash incentive
         compensation charge          $0.77      $0.73      $3.03       $2.88
        After non-cash incentive
         compensation charge          $0.77      $0.73      $2.87       $2.88

     Weighted average common
      shares outstanding:
        Basic                        93,671     86,969     89,886      86,349
        Diluted                      96,650     89,185     93,020      88,606

     Common shares
      outstanding at end
      of period:
        Basic                        98,114     87,387
        Diluted                     101,217     89,512

    (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.  The Company's
        management believes that adjusted earnings more closely approximates
        operating cash flow and is a useful measure for investors to consider,
        in conjunction with net income and other GAAP measures, in evaluating
        the Company's financial performance.  This is primarily because the
        Company is a commercial finance company that focuses on real estate
        lending and corporate tenant leasing; therefore, the Company's net
        income (determined in accordance with GAAP) reflects significant
        non-cash depreciation expense on corporate tenant lease assets.  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.
                         Consolidated Balance Sheets
                                (In thousands)

                                                     As of           As of
                                                  December 31,    December 31,
                                                     2002            2001
                                                 (unaudited)
     ASSETS

     Loans and other lending investments, net    $3,050,342      $2,377,763
     Corporate tenant lease assets, net           2,291,805       1,781,565
     Investments in and advances to joint
      ventures and unconsolidated subsidiaries       30,611          60,794
     Assets held for sale                            28,501              --
     Cash and cash equivalents                       15,934          15,670
     Restricted cash                                 40,211          17,852
     Accrued interest and operating
      lease income receivable                        26,804          31,797
     Deferred operating lease income receivable      36,739          21,195
     Deferred expenses and other assets              90,750          74,004
                     Total assets                $5,611,697      $4,380,640

     LIABILITIES AND SHAREHOLDERS' EQUITY

     Accounts payable and other liabilities        $117,001         $89,618
     Dividends payable                                5,225           5,225

     Debt obligations:
         Unsecured senior notes                     617,317         609,302
         Unsecured revolving credit facilities           --              --
         Secured revolving credit facilities      1,273,754         900,546
         Secured term loans                         682,615         506,613
         iStar Asset Receivables secured notes      871,943         462,373
         Other debt obligations                      15,961          16,535
             Total liabilities                   $3,583,816      $2,590,212
     Minority interest                                2,581           2,650
     Shareholders' equity                         2,025,300       1,787,778
             Total liabilities and
              shareholders' equity               $5,611,697      $4,380,640


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

    PERFORMANCE  STATISTICS

    Return on Average Book Assets            Three Months Ended  Year Ended
                                                 December 31,    December 31,
                                                    2002             2002
    Adjusted Basic Earnings to
     Common Shareholders (1) (2)                  $74,037         $280,695
    Plus: Preferred Dividends                       9,227           36,908
    Adjusted Basic Earnings before
     Preferred Dividends                          $83,264         $317,603
    Adjusted Basic Earnings before
     Preferred Dividends - Annualized (A)        $333,056         $317,603

    Average Total Book Assets (B)              $5,489,590       $4,996,168

    Return on Average Book Assets (A) / (B)           6.1%             6.4%

    Return on Average Common Book Equity

    Adjusted Basic Earnings to
     Common Shareholders (1) (2)                  $74,037         $280,695
    Adjusted Basic Earnings to
     Common - Annualized (C)                     $296,148         $280,695

    Average Total Book Equity                  $1,951,422       $1,906,539
    Less: Book Value of Preferred Equity         (382,000)        (382,000)
    Average Common Book Equity (D)             $1,569,422       $1,524,539

    Return on Average Common
     Book Equity (C) / (D)                           18.9%            18.4%

    Efficiency Ratio

    General & Administrative Expenses              $7,601          $30,449
    Plus: General and Administrative -
     Stock-Based Compensation                         633           17,998
    Total Corporate Overhead (E)                   $8,234          $48,447

    Total Revenue (F)                            $140,321         $525,724

    Efficiency Ratio (E) / (F)                        5.9%             9.2%

    CREDIT STATISTICS

    Book Debt / Equity

    Book Debt (A)                              $3,461,590

    Total Book Equity (B)                      $2,025,300

    Book Debt / Book Equity (A) / (B)                 1.7x

    (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.  The Company's
        management believes that adjusted earnings more closely approximates
        operating cash flow and is a useful measure for investors to consider,
        in conjunction with net income and other GAAP measures, in evaluating
        the Company's financial performance.  This is primarily because the
        Company is a commercial finance company that focuses on real estate
        lending and corporate tenant leasing; therefore, the Company's net
        income (determined in accordance with GAAP) reflects significant non-
        cash depreciation expense on corporate tenant lease assets.  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) Excludes a $15.0 million non-cash charge related to performance-based
        vesting of restricted shares granted under the Company's long-term
        incentive plan for the year ended December 31, 2002.


                             iStar Financial Inc.
                           Supplemental Information
                                (In thousands)

     CREDIT STATISTICS  (cont.)
                                          Three Months Ended    Year Ended
     Interest Coverage                     December 31, 2002 December 31, 2002

     EBITDA (1) (A)                             $125,400         $471,443

     GAAP Interest Expense (B)                   $49,440         $185,375

     EBITDA / GAAP Interest Expense (A) / (B)        2.5x             2.5x

     Fixed Charge Coverage

     EBITDA (1) (C)                             $125,400         $471,443

     GAAP Interest Expense                       $49,440         $185,375
     Plus: Preferred Dividends                     9,227           36,908
     Total Fixed Charges (D)                     $58,667         $222,283

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


     FINANCING VOLUME SUMMARY STATISTICS

     Three Months Ended December 31, 2002          LOAN ORIGINATIONS
                                                            Total/
                                               Floating    Weighted  CORPORATE
                                     Fixed Rate  Rate       Average   LEASING

     Amount Funded                    $81,906  $217,607    $299,512  $132,413
     Weighted Average GAAP Yield       13.37%     6.90%       8.67%     9.90%
     Weighted Average All-In
      Spread/Margin
      (basis points) (2)              + 1,098     + 534          --     + 563
     Weighted Average First
      $ Loan-to-Value Ratio             17.5%     25.5%       23.3%        --
     Weighted Average Last
      $ Loan-to-Value Ratio             76.2%     70.4%       72.0%        --

     Year Ended December 31, 2002                  LOAN ORIGINATIONS
                                                           Total/
                                               Floating   Weighted   CORPORATE
                                    Fixed Rate   Rate      Average    LEASING

     Amount Committed                $391,309  $922,766  $1,314,075  $428,793
     Weighted Average GAAP Yield       13.18%     7.12%       8.92%     9.56%
     Weighted Average All-In
      Spread/Margin
      (basis points) (2)                + 942     + 535          --     + 484
     Weighted Average First
      $ Loan-to-Value Ratio             24.3%     12.8%       16.2%        --
     Weighted Average Last
      $ Loan-to-Value Ratio             69.1%     68.1%       68.4%        --

    (1) EBITDA is calculated as total revenue plus equity in earnings
        from joint ventures and unconsolidated subsidiaries minus the
        sum of general and administrative expenses, general and
        administrative - stock-based compensation (excluding the non-cash
        charge related to performance-based vesting of restricted shares
        granted under the Company's long-term incentive plan), provision for
        loan losses and operating costs on corporate tenant lease assets.
        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.  The Company's management
        believes that EBITDA more closely approximates operating cash flow and
        is a useful measure for investors to consider, in conjunction with net
        income and other GAAP measures, in evaluating the Company's financial
        performance.  This is primarily because the Company is a commercial
        finance company that focuses on real estate lending and corporate
        tenant leasing; therefore, the Company's net income (determined in
        accordance with GAAP) reflects significant non-cash depreciation
        expense on corporate tenant lease assets.  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) 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)

     UNFUNDED COMMITMENTS

     Number of Loans with Unfunded Commitments                        9
     Discretionary Commitments                                  $22,225
     Non-Discretionary Commitments                               75,515
     Total Unfunded Commitments                                 $97,740
     Estimated Weighted Average Funding Period      Approximately 2.0 years


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

    PORTFOLIO STATISTICS AS OF DECEMBER 31, 2002 (1)

    Security Type                                       $                 %
    Corporate Tenant Leases                         $2,479             44.6%
    First Mortgages                                  2,038             36.7%
    Corporate/Partnership Loans/Other                  740             13.3%
    Second Mortgages                                   302              5.4%
                 Total                              $5,559            100.0%

    Collateral Type                                     $                 %
    Office (CTL)                                    $1,525             27.4%
    Office (Lending)                                 1,093             19.7%
    Industrial/R&D                                     834             15.0%
    Hotel (Lending)                                    666             12.0%
    Conference/Entertainment                           404              7.3%
    Hotel (Investment-Grade CTL)                       271              4.9%
    Apartment/Residential                              259              4.6%
    Retail                                             214              3.8%
    Mixed Use/Mixed Collateral                         212              3.8%
    Other                                               81              1.5%
                 Total                              $5,559            100.0%

    Product Line                                        $                 %
    Corporate Tenant Leasing                        $2,479             44.6%
    Structured Finance                               1,472             26.5%
    Corporate Finance                                  683             12.3%
    Loan Acquisition                                   528              9.5%
    Portfolio Finance                                  397              7.1%
                 Total                              $5,559            100.0%

    Collateral Location                                 $                 %
    West                                            $1,605             28.9%
    Northeast                                        1,024             18.3%
    South                                              653             11.8%
    Southeast                                          641             11.5%
    Mid-Atlantic                                       593             10.7%
    Central                                            433              7.8%
    North Central                                      245              4.4%
    Northwest                                          227              4.1%
    Southwest                                           82              1.5%
    Various                                             56              1.0%
                 Total                              $5,559            100.0%

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

SOURCE iSTAR Financial Inc.

CONTACT: Catherine D. Rice, Chief Financial Officer, +1-212-930-9400, or Andrew C. Richardson, Executive Vice President, +1-212-930-9400, or Erin C. Gatewood, Associate, Investor Relations, +1-212-930-9400

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