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02/28/2006

iStar Financial Announces Fourth Quarter and Fiscal Year 2005 Results

              Board of Directors Approves 5% Increase in Regular
                   Quarterly Cash Dividends on Common Stock

     - Record fourth quarter new financing commitments total $1.7 billion in
       33 separate transactions.

     - Record 2005 origination volume increases to $4.9 billion in 95 total
       financing commitments.

     - Adjusted earnings per diluted common share were $0.81 and $3.36 for the
       fourth quarter and fiscal year 2005, respectively.

     - Total revenues were $197.8 million and $798.5 million for the fourth
       quarter and fiscal year 2005, respectively.

     - Company reaffirms full year 2006 adjusted earnings per diluted common
       share guidance of $3.35 - $3.50.

NEW YORK, Feb. 28 /PRNewswire-FirstCall/ -- iStar Financial Inc. (NYSE: SFI), the leading publicly traded finance company focused on the commercial real estate industry, today reported fourth quarter and fiscal year 2005 results.

Fourth Quarter 2005 Results

iStar Financial reported adjusted earnings for the quarter ended December 31, 2005 of $0.81 per diluted common share versus $0.87 per diluted common share for the fourth quarter 2004. Adjusted earnings allocable to common shareholders for the fourth quarter 2005 were $92.2 million on a diluted basis, compared to $98.4 million for the fourth quarter 2004. Adjusted earnings represents net income computed in accordance with GAAP, adjusted for preferred dividends, depreciation, depletion, amortization and gain (loss) from discontinued operations.

Net income allocable to common shareholders for the fourth quarter was $68.0 million, or $0.60 per diluted common share, compared with $115.0 million, or $1.02 per diluted common share, for the fourth quarter of 2004.

Net investment income for the quarter was $99.3 million, compared to $90.2 million for the fourth quarter of 2004. Net investment income represents interest income, operating lease income and equity in earnings from joint ventures, less interest expense, operating costs for corporate tenant lease assets and loss on early extinguishment of debt, in each case as computed in accordance with GAAP.

The Company announced that during the fourth quarter, it closed a record 33 new financing commitments for a total of $1.67 billion, of which $1.04 billion was funded during the quarter. In addition, the Company funded $114.7 million under pre-existing commitments and received $558.0 million in principal repayments. Cumulative repeat customer business totaled $8.7 billion at December 31, 2005.

For the quarter ended December 31, 2005, the Company generated returns on average book assets and average common book equity of 5.1% and 19.0%, respectively. For the quarter, the Company's debt to book equity plus accumulated depreciation, depletion and loan loss reserves, as determined in accordance with GAAP, was 2.1x.

Jay Sugarman, iStar Financial's chairman and chief executive officer, said, "Setting a new commitment record this past quarter is a solid demonstration that our custom-tailored capital strategy works even in very challenging markets. It is also a testament to the hard work and dedication of our experienced team of real estate professionals."

Fiscal Year 2005 Results

Adjusted earnings allocable to common shareholders for the year ended December 31, 2005 were $382.3 million on a diluted basis, or $3.36 per diluted share, compared to $266.7 million, or $2.37 per diluted share for the period ended December 31, 2004.

Net income allocable to common shareholders for the year ended December 31, 2005 was $239.6 million, or $2.11 per diluted common share, compared with $205.8 million, or $1.83 per diluted common share for the year ended December 31, 2004. For fiscal year 2005, net income allocable to common shareholders includes a $37.5 million non-cash charge for prepayment of the Company's STARs asset-backed notes, which occurred during the quarter ended September 30, 2005.

Net investment income and total revenue were $338.0 million and $798.5 million respectively, for the year ended December 31, 2005, versus $370.2 million and $691.2 million respectively for the year ended December 31, 2004. For fiscal year 2005, net investment income includes a $44.3 million total charge for the prepayment of the Company's STARs asset-backed notes.

Mr. Sugarman said, "Our full-year 2005 financing volumes show the continued expansion of our franchise during the year despite the competitive factors in the high-end commercial real estate market. During the year, we focused on controlling those aspects of our business that we could control. We strengthened our platform, expanded our auto loan and lease program through our AutoStar subsidiary and began to see the potential in our investment in Oak Hill Advisors. In summary, we believe our financing platform and capabilities have never been stronger. The additions to our business model that we completed during the year put us firmly on track for what we believe will be continued solid performance over the next five years."

Mr. Sugarman added, "We are committed to a strong and growing dividend as a hallmark of our company. Including the dividend increase we announced earlier today, we've grown our dividend by 5% annually for the last four years. Since becoming a public company in 1998, we've paid approximately $1.7 billion in common share dividends, or $18.74 per common share."

Mr. Sugarman concluded, "Our goal -- and our record -- has been to grow the dividend annually while maintaining a significant safety cushion between adjusted earnings and dividends. Many in our growing group of retail shareholders, and our own management team, make iStar stock a cornerstone of their net worth and count on that dividend every quarter. We have been able to grow our dividend consistently because historically our free cash flow has closely paralleled reported adjusted earnings, giving us significant coverage of the dividend from free cash flow."

Capital Markets Summary

During the fourth quarter, the Company issued $250 million of 5.80% senior unsecured notes due 2011, and $225 million of senior unsecured floating rate notes due 2009 bearing interest at a rate per annum equal to 3-month LIBOR plus 0.55%. The net proceeds of the issuances were used to repay outstanding indebtedness under the Company's unsecured revolving credit facility.

During the first quarter 2006, the Company issued $500 million of 5.65% senior unsecured notes due 2011 and $500 million of 5.875% senior unsecured notes due 2016. In addition, the Company extended the final maturity date on its secured credit facility by two years to January 2008 and reduced its maximum principal amount to $500 million from $700 million. Also during the first quarter 2006, Fitch Ratings upgraded the Company's senior unsecured debt rating to 'BBB' from 'BBB-' and its preferred stock rating to 'BB+' from 'BB'. Most recently, Moody's Investors Service upgraded the Company's senior unsecured ratings to 'Baa2' from 'Baa3' and its preferred stock rating to 'Ba1' from 'Ba2' and Standard and Poor's Ratings upgraded the Company's long- term unsecured senior debt rating to 'BBB' from 'BBB-' and its preferred stock rating to 'BB+' from 'BB'.

Catherine D. Rice, iStar Financial's chief financial officer, said, "Last year we achieved a number of significant milestones that helped us compete during a challenging year and position us well for the long-term. During the year, through a very disciplined strategy, we were successful in transitioning our business to an unsecured funding model. We completed three successful unsecured bond offerings, upsized our unsecured credit facility, eliminated three secured lines of credit and repaid our STARs asset-backed notes. All of these actions are consistent with our long-term goals and representative of our position as a premier investment grade finance company."

Ms. Rice concluded, "The 2005 results show that we made significant progress last year in strengthening the balance sheet. We are pleased that our hard work is being recognized and that iStar has now received upgrades from all the major ratings agencies since the beginning of this year."

As of December 31, 2005, the Company had $1.2 billion outstanding under $2.2 billion in credit facilities. Consistent with its match funding policy under which a one percentage point change in interest rates cannot impact adjusted earnings by more than 2.5%, as of December 31, 2005, a 100 basis point increase in rates would have decreased the Company's adjusted earnings by 0.77%.

Earnings Guidance

Consistent with the Securities and Exchange Commission's Regulation FD and Regulation G, iStar Financial comments on earnings expectations within the context of its regular earnings press releases. The Company continues to expect diluted adjusted earnings per share for the fiscal year 2006 of $3.35-$3.50, and diluted GAAP earnings per share for the fiscal year 2006 of $2.35-$2.50, based on expected net asset growth of approximately $1.5 billion.

Risk Management

At December 31, 2005, first mortgages, participations in first mortgages, corporate tenant leases and corporate financing transactions collectively comprised 93.3% of the Company's asset base. The Company's loan portfolio consisted of 60% floating rate and 40% fixed rate loans. The weighted average first and last dollar loan-to-value ratio for all structured finance assets was 17.0% and 65.2%, respectively. At quarter end, the Company's corporate tenant lease assets were 95.9% leased with a weighted average remaining lease term of 11.0 years.

At December 31, 2005, the weighted average risk ratings of the Company's structured finance assets was 2.63 for risk of principal loss, compared to last quarter's rating of 2.60, and 3.06 for performance compared to original underwriting, compared to last quarter's rating of 3.02. The weighted average risk rating for corporate tenant lease assets was 2.38 at the end of the fourth quarter, compared to the prior quarter's rating of 2.36.

At quarter end, accumulated loan loss reserves and other asset-specific credit protection represented an aggregate of approximately 6.0% 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 11.6% of the gross book value of the Company's corporate tenant lease assets at quarter end.

At December 31, 2005, the Company's non-performing loan assets (NPLs) represented 0.4% of total assets. NPLs represent loans on non-accrual status and repossessed real estate collateral. At December 31, 2005, the Company had two loans on non-accrual and no repossessed assets. In addition, watch list assets represented 0.2% of total assets at December 31, 2005.

Tim O'Connor, iStar Financial's chief operating officer, said, "In 2005, we continued to manage our business to ensure that the overall credit quality of our portfolio remained strong. We saw no major changes to the overall credit statistics during the fourth quarter and no assets were added to our NPL list, a measure of the quality of our customer base that we believe translates directly into superior results for our portfolio."

Dividend and Other Developments

On December 1, 2005, iStar Financial declared a regular quarterly dividend of $0.7325. The fourth quarter dividend was payable on December 31, 2005 to shareholders of record on December 15, 2005.

iStar Financial announced today that, effective April 1, 2006, its Board of Directors approved an increase in the regular quarterly cash dividend on its common stock to $0.77 per share for the quarter ended March 31, 2006, representing $3.08 per share on an annualized basis. The $0.77 quarterly dividend represents a 5% increase over iStar Financial's pre-existing quarterly dividend rate of $0.7325. The $0.77 quarterly dividend is payable on April 29, 2006 to holders of record on April 15, 2006.

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.

iStar Financial will hold a quarterly earnings conference call at 10:00 a.m. EST today, February 28, 2006. This conference call will be broadcast live over the Internet and can be accessed by all interested parties through iStar Financial's website, http://www.istarfinancial.com, under the "Investor Relations" section. To listen to the live call, please go to the website'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 website.

(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 mix of originations between structured finance and corporate tenant lease assets, repayment levels, the timing of receipt of prepayment penalties, the availability and cost of capital for future investments, competition within the finance and real estate industries, economic conditions, loss experience and other risks detailed from time to time in iStar Financial Inc.'s SEC reports.)



    Selected Income Statement Data
    (In thousands)
    (unaudited)
                                      Three Months Ended  Twelve Months Ended
                                         December 31,         December 31,
                                        2005      2004       2005      2004

    Net investment income (1)          $99,307   $90,236  $337,957  $370,232
    Other income                        11,579    23,983    81,440    56,063
    Non-interest expense (2)           (35,818)  (31,348) (138,679) (230,366)
    Minority interest in consolidated
     entities                             (300)     (229)     (980)     (716)
    Income from continuing operations  $74,768   $82,642  $279,738  $195,213

    Income from discontinued
     operations                            156     3,573     1,821    21,859
    Gain from discontinued operations    5,396    41,226     6,354    43,375
    Preferred dividend requirements
     (3)                               (10,580)  (10,580)  (42,320)  (51,340)
    Net income allocable to common
     shareholders and HPU holders (4)  $69,740  $116,861  $245,593  $209,107


    (1) Net investment income for the twelve months ended December 31, 2005
        includes a $44.3 million charge relating to the redemption of $620.7
        million of STARs asset-backed notes. Net investment income for the
        twelve months ended December 31, 2004 includes an $11.5 million charge
        relating to the redemption of $110 million of the Company's 8.75%
        Senior Notes due 2008.

    (2) Non-interest expense for the twelve months ended December 31, 2004,
        includes the Q1'04 CEO, CFO and ACRE Partners compensation charges of
        $106.9 million.

    (3) Preferred dividend requirements for the twelve months ended December
        31, 2004, includes $9.0 million related to the redemption of the
        Company's 9.375% Series B and 9.20% Series C Cumulative Redeemable
        Preferred Stock.

    (4) HPU holders are Company employees who purchased high performance
        common stock units under the Company's High Performance Unit Program.



    Selected Balance Sheet Data
    (In thousands)
                                                As of             As of
                                         December 31, 2005   December 31, 2004
                                             (unaudited)

    Loans and other lending investments,
     net                                     $4,661,915        $3,938,427
    Corporate tenant lease assets, net        3,115,361         2,877,042
    Other investments                           240,470            82,854
    Total assets                              8,532,296         7,220,237
    Debt obligations                          5,859,592         4,605,674
    Total liabilities                         6,052,114         4,745,749
    Total shareholders' equity                2,446,671         2,455,242



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

                                      Three Months Ended   Twelve Months Ended
                                         December 31,          December 31,
                                       2005       2004      2005       2004
      Revenue:
         Interest income             $107,550    $88,015  $406,668   $351,972
         Operating lease income        78,637     73,596   310,396    283,157
         Other income                  11,579     23,983    81,440     56,063
           Total revenue              197,766    185,594   798,504    691,192

      Costs and expenses:
         Interest expense              81,717     62,018   313,053    232,728
         Operating costs - corporate
          tenant lease assets           5,963      8,835    23,066     21,987
         Depreciation and
          amortization                 18,601     16,981    72,442     63,778
         General and administrative    16,460     11,530    61,229     47,912
         General and administrative
          - stock-based compensation
          expense                         757        837     2,758    109,676
         Provision for loan losses          -      2,000     2,250      9,000
         Loss on early
          extinguishment of debt        1,642        (87)   46,004     13,091
           Total costs and expenses   125,140    102,114   520,802    498,172

      Income from continuing
       operations before other items   72,626     83,480   277,702    193,020
           Equity in earnings from
            joint ventures              2,442       (609)    3,016      2,909
           Minority interest in
            consolidated entities        (300)      (229)     (980)      (716)
       Income from continuing
        operations                     74,768     82,642   279,738    195,213

           Income from discontinued
            operations                    156      3,573     1,821     21,859
           Gain from discontinued
            operations                  5,396     41,226     6,354     43,375
      Net income                       80,320    127,441   287,913    260,447

      Preferred dividends             (10,580)   (10,580)  (42,320)   (51,340)

      Net income allocable to common
       shareholders and HPU holders   $69,740   $116,861  $245,593   $209,107

      Net income per common share:
           Basic (1)                    $0.60      $1.03     $2.13      $1.87
           Diluted (2)(3)               $0.60      $1.02     $2.11      $1.83

      Weighted average common shares
       outstanding:
           Basic                      113,107    111,402   112,513    110,205
           Diluted                    114,283    112,726   113,703    112,464


     (1) For the three months ended December 31, 2005 and 2004, excludes
         $1,707 and $1,865 of net income allocable to HPU holders,
         respectively. For the twelve months ended December 31, 2005 and 2004,
         excludes $6,043 and $3,314 of net income allocable to HPU holders,
         respectively.

     (2) For the three months ended December 31, 2005 and 2004, excludes
         $1,691 and $1,844 of net income allocable to HPU holders,
         respectively. For the twelve months ended December 31, 2005 and 2004,
         excludes $5,983 and $3,265 of net income allocable to HPU holders,
         respectively.

     (3) For the three months ended December 31, 2005 and 2004, includes $28
         and $39 of joint venture income, respectively.  For the twelve months
         ended December 31, 2005 and 2004, includes $28 and $3 of joint
         venture income, respectively.



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

                                     Three Months Ended  Twelve Months Ended
                                         December 31,        December 31,
                                       2005       2004     2005       2004

      ADJUSTED EARNINGS: (1)
      Net income  (2)                 $80,320   $127,441 $287,913   $260,447
      Add: Depreciation, depletion
       and amortization                19,558     17,190   75,574     67,853
      Add: Joint venture income            31         39      136        166
      Add: Joint venture depreciation
       and amortization                 2,738         72    8,284      3,544
      Add: Amortization of deferred
       financing costs  (3)             7,814      7,053   68,651     33,651
      Less: Preferred dividends  (4)  (10,580)   (10,580) (42,320)   (51,340)
      Less: Gain from discontinued
       operations                      (5,396)   (41,226)  (6,354)   (43,375)

      Adjusted earnings allocable to
       common shareholders and HPU
       holders:
         Basic                        $94,454    $99,950 $391,748   $270,780
         Diluted                      $94,485    $99,989 $391,884   $270,946

      Adjusted earnings per common
       share:
         Basic: (5)                     $0.81      $0.88    $3.40      $2.42
         Diluted: (6)                   $0.81      $0.87    $3.36      $2.37

      Weighted average common shares
       outstanding:
         Basic                        113,107    111,402  112,513    110,205
         Diluted                      114,283    112,726  113,747    112,537

      Common shares outstanding at
       end of period:
         Basic                        113,209    111,432  113,209    111,432
         Diluted                      114,403    112,747  114,403    112,747

      (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.  Rather, adjusted earnings is an additional measure
          the Company uses to analyze how its business is performing. 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) For the twelve months ended December 31, 2005, includes a $44.3
          million charge relating to the redemption of $620.7 million of STARs
          asset-backed notes. For the twelve months ended  December 31, 2005,
          includes the Q1'04 CEO, CFO, and ACRE Partners compensation charges
          of $106.9 million and the 8.75% Senior Notes due 2008 redemption
          charge of $11.5 million.

      (3) For the twelve months ended December 31, 2005, includes a $37.5
          million non-cash charge relating to the redemption of STARs asset-
          backed notes.

      (4) For the twelve months ended December 31, 2004, includes $9.0 million
          relating to redemption of the 9.375% Series B and 9.20% Series C
          Cumulative Redeemable Preferred Stock in Q1'04.

      (5) For the three months ended December 31, 2005 and 2004, excludes
          $2,312 and $1,595 of net income allocable to HPU holders,
          respectively. For the twelve months ended December 31, 2005 and
          2004, excludes $9,636 and $4,317 of net income allocable to HPU
          holders, respectively.

      (6) For the three months ended December 31, 2005 and 2004, excludes
          $2,290 and $1,577 of net income allocable to HPU holders,
          respectively. For the twelve months ended December 31, 2005 and
          2004, excludes $9,538 and $4,261 of net income allocable to HPU
          holders, respectively.



                               iStar Financial Inc.
                           Consolidated Balance Sheets
                                  (In thousands)

                                               As of              As of
                                         December 31, 2005  December 31, 2004
                                            (unaudited)

     ASSETS

     Loans and other lending investments,
      net                                    $4,661,915        $3,938,427
     Corporate tenant lease assets, net       3,115,361         2,877,042
     Other investments                          240,470            82,854
     Investments in joint ventures              202,128             5,663
     Cash and cash equivalents                  115,370            88,422
     Restricted cash                             28,804            39,568
     Accrued interest and operating lease
      income receivable                          32,166            25,633
     Deferred operating lease income
      receivable                                 76,874            62,092
     Deferred expenses and other assets          50,005           100,536
     Goodwill                                     9,203                 -
                     Total assets            $8,532,296        $7,220,237



     LIABILITIES AND SHAREHOLDERS' EQUITY

     Accounts payable, accrued expenses
      and other liabilities                    $192,522          $140,075

     Debt obligations:
             Unsecured senior notes           4,108,477         2,064,435
             Unsecured revolving credit
              facilities                      1,242,000           840,000
             Secured revolving credit
              facilities                              -            78,587
             Secured term loans                 411,144           693,472
             Other debt obligations              97,971                 -
             iStar Asset Receivables
              secured notes                           -           929,180
                     Total liabilities        6,052,114         4,745,749
     Minority interest in consolidated
      entities                                   33,511            19,246
     Shareholders' equity                     2,446,671         2,455,242
                     Total liabilities
                      and shareholders'
                      equity                 $8,532,296        $7,220,237



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

    PERFORMANCE STATISTICS
                                                   Three Months Ended
    Return on Average Book Assets                   December 31, 2005

    Adjusted basic earnings allocable to
     common shareholders and HPU holders (1)              $94,454
    Plus: Preferred dividends                              10,580
    Adjusted basic earnings before preferred dividends   $105,034

    Adjusted basic earnings before
     preferred dividends - Annualized (A)                $420,137
    Average total book assets (B)                      $8,246,433
    Return on average book assets (A)/(B)                     5.1%

    Return on Average Common Book Equity

    Adjusted basic earnings allocable to
     common shareholders and HPU holders (1)              $94,454
    Adjusted basic earnings allocable to
     common shareholders and HPU holders
     - Annualized (C)                                    $377,817

    Average total book equity                          $2,495,362
    Less: Average book value of preferred equity         (506,176)
    Average common book equity (D)                     $1,989,186
    Return on average common book equity (C)/(D)             19.0%

    Efficiency Ratio

    General & administrative expenses                     $16,460
    Plus: General and administrative - stock-based
     compensation                                             757
    Total corporate overhead (E)                          $17,217

    Total revenue (F)                                    $197,766

    Efficiency ratio (E)/(F)                                  8.7%


    CREDIT STATISTICS

    Book Debt (A)                                      $5,859,592

    Book Equity                                        $2,446,671
    Plus: Accumulated Depreciation,
     Depletion and Loan Loss Reserves                     345,684
    Sum of Book Equity, Accumulated
     Depreciation, Depletion and Loan
     Loss Reserves (B)                                 $2,792,355

    Book Debt / Sum of Book Equity,
     Accumulated Depreciation, Depletion and Loan
      Loss Reserves (A)/(B)                                   2.1x

    Ratio of earnings to fixed charges                        1.9x

    Ratio of earnings to fixed charges
     and preferred stock dividends                            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.  Rather, adjusted
        earnings is an additional measure the Company uses to analyze how its
        business is performing.  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.
                              Supplemental Information
                                   (In thousands)
                                     (unaudited)

          CREDIT STATISTICS  (cont.)
                                                    Three Months Ended
      Interest Coverage                             December 31, 2005
      EBITDA(1) (C)                                      $181,810
      GAAP interest expense (D)                           $81,717

      EBITDA / GAAP interest expense  (C)/(D)                 2.2x

      Fixed Charge Coverage

      EBITDA(1) (C)                                      $181,810

      GAAP interest expense                               $81,717
      Plus: Preferred Dividends                            10,580
      Total GAAP interest expense and
       preferred dividends (E)                            $92,297

      EBITDA / GAAP interest expense and
       preferred dividends (C)/(E)                            2.0x


      Unencumbered assets                              $8,129,358

      RECONCILIATION OF NET INCOME TO EBITDA

      Net Income                                          $80,320
      Add: GAAP interest expense                           81,717
      Add: Depreciation, depletion and amortization        19,773

      EBITDA  (1)                                        $181,810


      (1) 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. It should be noted that
          the Company's manner of calculating EBITDA may differ from the
          calculations of similarly-titled measures by other companies.



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

     FINANCING VOLUME SUMMARY STATISTICS

      Three Months Ended
       December 31, 2005         LOAN ORIGINATIONS
                                               Total/
                             Fixed   Floating Weighted  CORPORATE    OTHER
                             Rate     Rate    Average    LEASING  INVESTMENTS
      Amount funded        $332,775 $601,298  $934,073   $101,022    $7,375
      Weighted average
       GAAP yield             13.41%    9.26%    10.74%      8.78%     N/A
      Weighted average
       all-in spread/margin
       (basis points) (1)       898      509         -        419      N/A
      Weighted average first
       $ loan-to-value ratio   10.4%     5.3%      7.1%        N/A     N/A
      Weighted average last
       $ loan-to-value ratio   67.0%    68.7%     68.1%        N/A     N/A


    FINANCING VOLUME SUMMARY STATISTICS

    Year Ended
     December 31, 2005     LOAN ORIGINATIONS
                                          Total/
                     Fixed  Floating     Weighted    CORPORATE     OTHER
                     Rate     Rate        Average     LEASING    INVESTMENTS
    Amount
    funded       $1,095,370 $1,766,769  $2,862,139    $275,398    $171,582
    Weighted
     average
     GAAP
     yield (2)        10.16%     8.32%       9.03%       9.75%         N/A
    Weighted
     average
     all-in
     spread/margin
    (basis
     points) (1)        612       496           -         525          N/A
    Weighted
     average first
     $ loan-to-value
     ratio             32.7%      8.6%       17.5%        N/A          N/A
    Weighted
     average last
     $ loan-to-value
     ratio             68.4%     65.8%       66.8%        N/A          N/A


      UNFUNDED COMMITMENTS

      Number of assets with unfunded
       commitments                                            51
      Discretionary commitments                          $38,707
      Non-discretionary commitments                    1,442,639
      Total unfunded commitments                      $1,481,346

      Estimated weighted average
      funding period                     Approximately 4.6 years


    (1) 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 and year-end respectively.

    (2) Yield excludes up-front fees earned from an acquisition financing
        funded during the third quarter.



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

         LOANS AND OTHER LENDING INVESTMENTS CREDIT STATISTICS

                                                        As of
                                         December 31, 2005  December 31, 2004
                                             $        %         $        %
         Carrying value of non-performing
          loans /
            As a percentage of total
             assets                        $35,291   0.41%   $27,526   0.38%

         Reserve for loan losses /
            As a percentage of total
             assets                        $46,876   0.55%   $42,436   0.59%
            As a percentage of non-
             performing loans                         133%              154%


                                                 Twelve Months Ended
                                         December 31, 2005   December 31, 2004
                                             $         %         $       %
         Net charge-offs /
            As a percentage of total
             assets                             $0   0.00%        $0   0.00%


    RECONCILIATION OF DILUTED ADJUSTED EPS
    GUIDANCE TO DILUTED GAAP EPS GUIDANCE (1)

                                                Year Ended
                                            December 31, 2006

    Earnings per diluted common share
     guidance                                 $2.35 - $2.50
    Add: Depreciation, depletion and
     amortization per diluted common share    $0.85 - $1.15
    Adjusted earnings per diluted common
     share guidance                           $3.35 - $3.50

    (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. Rather, adjusted
        earnings is an additional measure the Company uses to analyze how its
        business is performing. 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.
                            Supplemental Information
                                 (In millions)
                                  (unaudited)

    PORTFOLIO STATISTICS AS OF DECEMBER 31, 2005 (1)

    Security Type                                     $                 %
    Corporate Tenant Leases                         $3,458             41.3%
    First Mortgages (2)                              3,544             42.4
    Corporate/Partnership Loans                      1,165             13.9
    Other Investments                                  198              2.4
               Total                                $8,365            100.0%

    Collateral Type
    Office (CTL)                                    $1,651             19.7%
    Industrial/R&D                                   1,334             15.9
    Office (Lending)                                   642              7.7
    Entertainment/Leisure                              716              8.6
    Hotel (Lending)                                    586              7.0
    Mixed Use/Mixed Collateral                         601              7.2
    Apartment/Residential                              423              5.1
    Retail                                           1,071             12.8
    Hotel (Investment Grade CTL)                       268              3.2
    Other                                            1,073             12.8
               Total                                $8,365            100.0%

    Collateral Location
    West                                            $2,084             24.9%
    Northeast                                        1,354             16.2
    Southeast                                        1,210             14.5
    Central                                            740              8.8
    Mid-Atlantic                                       727              8.7
    Various                                            715              8.5
    South                                              597              7.1
    Southwest                                          417              5.0
    North Central                                      308              3.7
    Northwest                                          213              2.6
               Total                                $8,365            100.0%


    (1) Figures presented prior to loan loss reserves, accumulated
        depreciation and impact of statement of Financial Accounting
        Standards No. 141 ("SFAS No. 141") "Business Combinations."
    (2) Includes $407.1 million of junior participation interests in
        first mortgages.

SOURCE iStar Financial Inc.
CONTACT: Catherine D. Rice, Chief Financial Officer, or Andrew C. Richardson, Executive Vice President - Capital Markets, or Andrew G. Backman, Vice President - Investor Relations, all of iStar Financial Inc., +1-212-930-9400 /

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