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09/21/2005

iStar Financial Announces Redemption Date for iStar Asset Receivables ('STARs') Notes

Repayment of Notes to Unencumber Approximately $1.3 Billion of Assets; Reduces Company's Secured Debt to 12.2% of Total Debt

NEW YORK, Sept 21, 2005 /PRNewswire-FirstCall via COMTEX News Network/ -- iStar Financial Inc. (NYSE: SFI), the leading publicly traded finance company focused on the commercial real estate industry, today announced that it has given irrevocable notice to the Indenture Trustee of its iStar Asset Receivables Series 2002-1 and 2003-1 Notes that it will fully repay all outstanding Series 2002-1 and 2003-1 Notes on September 28, 2005.

The total outstanding principal balance of the Notes was approximately $716 million at June 30, 2005. The Company expects to incur one-time cash costs, including prepayment and other fees, of approximately $8.0 million and a non-cash charge of approximately $38.0 million to write off deferred financing fees and expenses. Based on current U.S. Treasury rates, these one-time costs would reduce the company's full year 2005 diluted adjusted earnings per share by approximately $0.07 and its diluted earnings per share by approximately $0.40, consistent with the company's prior guidance outlined in its second quarter 2005 earnings release.

Catherine D. Rice, iStar Financial's chief financial officer commented, "Over five years ago as a non-investment grade company, iStar Financial developed the STARs program as a cost-effective source of on-balance sheet match funded capital for a majority of its lending and leasing investments. We were very pleased with the receptivity of iStar by the asset-backed markets. However, as an investment grade finance company today, the unsecured debt markets currently offer better cost and more flexible debt capital for match funding our investments. Further, the repayment of these notes will unencumber approximately $1.3 billion of assets and reduce the Company's secured debt to just 12.2% of our total debt, based upon June 30, 2005 balances."

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 and mezzanine 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 the highest quality financing solutions to its customers. Additional information on iStar Financial is available on the Company's website at http://www.istarfinancial.com.

SOURCE iStar Financial Inc.

Catherine D. Rice, CFO, or Andrew C. Richardson, Executive VP, Capital Markets, or Adrew G. Backman, VP of Investor Relations, +1-212-930-9400, all of iStar Financial Inc.

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