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02/25/2004

iStar Financial Prices Offering of 7.50% Preferred Stock

Intends to Use Proceeds to Redeem 8.75% Senior Notes

NEW YORK, Feb 25, 2004 /PRNewswire-FirstCall via COMTEX/ -- iStar Financial Inc. (NYSE: SFI) today announced that it has priced an underwritten public offering of 5,000,000 shares of its 7.50% Series I Cumulative Redeemable Preferred Stock. Each share of the new Series I Preferred Stock will have a liquidation preference of $25.00 per share. Bear, Stearns & Co. Inc. is acting as the sole-book running manager of the offering and McDonald Investments Inc., Stifel, Nicolaus & Company Incorporated, Advest, Inc., and BB&T Capital Markets are co-managers.

iStar Financial intends to use the approximately $121 million of net proceeds from the offering to redeem approximately $110 million aggregate principal amount of its outstanding 8.75% Senior Notes due 2008 at a price of 108.75% of their principal amount plus accrued interest to the redemption date. The redemption is expected to be completed in the first quarter of 2004.

Upon completion of the redemption, approximately $240 million aggregate principal amount of the Senior Notes will remain outstanding.

The redemption of the Senior Notes will result in an aggregate charge to iStar Financial's adjusted earnings and net income determined in accordance with GAAP of approximately $9.6 million and $11.5 million, respectively, in the first quarter of 2004 due to the payment of the redemption premium. This anticipated charge was not reflected in the earnings guidance that we issued on February 12, 2004.

This press release does not constitute an offer to sell or a solicitation of offers to buy the Series I Preferred Stock. The offering is being made solely by means of a prospectus supplement and accompanying prospectus, copies of which will be filed with the Securities and Exchange Commission.

iStar Financial is the leading publicly traded finance company focused on the commercial real estate industry. The Company provides custom-tailored financing to high-end private and corporate owners of real estate nationwide, including senior and junior mortgage debt, senior, mezzanine and subordinated corporate 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. Additional information on iStar Financial is available on the Company's website at www.istarfinancial.com.

SOURCE iStar Financial Inc.

Catherine D. Rice, Chief Financial Officer, or Andrew C.
Richardson, Executive Vice President - Capital Markets, or Laca Wong,
Associate - Investor Relations, all of iStar Financial Inc., +1-212-930-9400
http://www.istarfinancial.com
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