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04/24/2007

iStar Financial Announces First Quarter 2007 Results

--First quarter new financing commitments reached $1.7 billion in a record 44 separate transactions. -- Adjusted earnings per diluted common share were $0.93 for the first quarter 2007. -- Total revenues reached a record $290.8 million for the first quarter 2007, up 31% year-over year. -- Company announces strategic joint venture to further expand its European investment platform. -- Company affirms full year 2007 adjusted earnings per diluted common share guidance of $3.80 - $4.00 and diluted GAAP earnings per share of $2.70 - $2.90.

NEW YORK, April 24, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- iStar Financial Inc. (NYSE: SFI), a leading publicly traded finance company focused on the commercial real estate industry, today reported results for the first quarter ended March 31, 2007.

iStar reported adjusted earnings for the quarter of $0.93 per diluted common share. This compares with $0.90 per diluted common share for the first quarter 2006. Adjusted earnings allocable to common shareholders for the first quarter 2007 were $118.7 million on a diluted basis, compared to $102.6 million for the first quarter 2006. Adjusted earnings represent 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 first quarter was $81.7 million, or $0.64 per diluted common share, compared to $75.5 million, or $0.66 per diluted common share for the first quarter 2006. Please see the financial tables that follow the text of this press release for a detailed reconciliation of adjusted earnings to GAAP net income.

Net investment income for the quarter was $125.6 million, compared to $109.3 million for the first quarter 2006. The year-over-year increase in net investment income was primarily due to continued growth of the Company's loan portfolio. Net investment income represents interest income, operating lease income and equity in earnings (loss) from joint ventures, less interest expense, operating costs for corporate tenant lease assets and loss on early extinguishment of debt.

The Company announced that during the first quarter, it closed a record 44 new financing commitments, for a total of $1.7 billion. Of that amount, $1.1 billion was funded during the first quarter. In addition, the Company funded $273.9 million under pre-existing commitments and received $314.1 million in principal repayments. Cumulative repeat customer business totaled $13.0 billion at March 31, 2007.

Additionally, the Company completed the sale of two non-strategic corporate tenant lease facilities for total proceeds of $34.8 million, net of costs, resulting in a total net book gain of approximately $1.4 million.

The Company also announced that it recently entered into a strategic joint venture that will focus on further expanding its European investment platform. The Company said the joint venture will focus on sale-leaseback, PropCo/OpCo, and other structured financing solutions to capture these and other opportunities in the market.

iStar will partner with London & Regional Properties, a major European real estate investment company, and Moor Park Capital Partners LLP, a well-respected, London-based real estate investment and advisory firm. The joint venture will be managed by Moor Park Capital Partners LLP. iStar said that working with prominent, experienced partners in the joint venture would expand its reach in the European market and is consistent with its strategy of leveraging key European relationships to expand and diversify its financing opportunities outside North America.

For the quarter ended March 31, 2007, the Company generated adjusted return on average common book equity of 19.2%. The Company's debt to book equity plus accumulated depreciation/depletion and loan loss reserves, all as determined in accordance with GAAP, was 2.5x at quarter end.

The Company's net finance margin, calculated as the rate of return on assets less the cost of debt, was 3.27% for the quarter, essentially in-line with the previous quarter.

Capital Markets Summary

During the first quarter, the Company issued a total of $1.05 billion of senior unsecured notes. Specifically, the Company issued $300 million of fixed rate 5.50% notes due 2012; $250 million of fixed rate 5.85% notes due 2017; and $500 million of floating rate notes due 2010 bearing interest at a rate per annum equal to 3-month LIBOR plus 0.35%. The Company said it used the net proceeds to repay outstanding U.S. dollar indebtedness on its unsecured revolving credit facility and for working capital purposes.

As of March 31, 2007, the Company had $1.1 billion outstanding under $2.7 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 March 31, 2007, a one percentage point increase in rates would have increased the Company's adjusted earnings by 1.83%.

Risk Management

At March 31, 2007, first mortgages, participations in first mortgages, senior loans and corporate tenant lease investments collectively comprised 81.4% of the Company's asset base, versus 81.6% in the prior quarter. The Company's loan portfolio consisted of 67% floating rate and 33% fixed rate loans, with a weighted average maturity of 4.0 years. The weighted average last dollar loan-to-value ratio for all structured finance assets was 64.4%. At quarter end, the Company's corporate tenant lease assets were 95.0% leased with a weighted average remaining lease term of 10.6 years. At March 31, 2007, the weighted average risk ratings of the Company's structured finance and corporate tenant lease assets were 2.64 and 2.45, respectively.

At March 31, 2007, watch list assets represented 1.27% of total assets versus 1.34% in the prior quarter. During the first quarter, two assets were removed from the watch list, one asset was moved to the non-performing loan (NPL) list and three assets were added to the watch list.

At March 31, 2007, the Company had three loans on its NPL list, representing 0.64% of total assets. The Company's policy is to stop the accrual of interest on loans placed on NPL status. The Company believes it has adequate collateral to support the book value for each of the watch list and NPL assets. The Company had $57.2 million in loan loss allowances at March 31, 2007 versus $52.2 million at December 31, 2006.

During the first quarter, the Company, under a consensual agreement, took title to the one million-square-foot Comerica Tower, a class A+ office building in the central business district of Detroit, Michigan. This signature asset, which was previously on the Company's NPL and watch lists, experienced unexpected tenant vacancies. Given its experience and expertise in owning and managing real estate and the quality of the remaining tenants, the Company said it is well equipped to take ownership and manage this asset and is currently comfortable with its basis.

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 common share for the fiscal year 2007 of $3.80 - $4.00, and diluted GAAP earnings per common share for the fiscal year 2007 of $2.70 - $2.90, based on expected annual net asset growth of approximately $3.0 billion. The Company continues to expect to fund its long-term net asset growth with a combination of unsecured debt and equity.

Dividend

On April 2, 2007, iStar Financial declared a regular quarterly dividend of $0.825. The first quarter dividend will be payable on April 30, 2007 to shareholders of record on April 16, 2007.

Annual Meeting

The Company will host its Annual Meeting of Shareholders at The Harvard Club of New York City, located at 35 West 44th Street, New York, New York 10036 on Wednesday, May 30, 2007 at 9:00 a.m. EDT. All shareholders are cordially invited to attend.

[Financial Tables to Follow]

iStar Financial Inc. is a leading publicly traded finance company focused on the commercial real estate industry. The Company primarily provides custom-tailored investment capital to high-end private and corporate owners of real estate, including senior and mezzanine real estate debt, senior and mezzanine corporate capital, as well as corporate net lease financing and equity. The Company, which is taxed as a real estate investment trust ("REIT"), seeks to deliver strong dividends 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 10:00 a.m. EDT today, April 24, 2007. 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.)

    COMPANY CONTACTS

    Catherine D. Rice                 Andrew G. Backman
    Chief Financial Officer           Vice President - Investor Relations



    Selected Income Statement Data
    (In thousands)
    (unaudited)
                                                       Three Months Ended
                                                            March 31,
                                                     2007               2006

    Net investment income (1)                     $125,604           $109,303
    Other income                                    28,475             13,468
    Other expenses (2)                             (62,642)           (38,806)
    Minority interest in consolidated
     entities                                          564               (248)
    Income from continuing operations              $92,001            $83,717

    Income from discontinued operations                680              2,087
    Gain from discontinued operations                1,415              2,182
    Preferred dividends                            (10,580)           (10,580)
    Net income allocable to common
     shareholders and HPU holders (3)              $83,516            $77,406


    (1) Includes interest income, operating lease income and equity in
        earnings (loss) from joint ventures, less interest expense, operating
        costs for corporate tenant lease assets and loss on early
        extinguishment of debt.


    (2) Includes depreciation and amortization, general and administrative and
        provision for loan loss expenses.


    (3) 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
                                             March 31, 2007  December 31, 2006
                                               (unaudited)

    Loans and other lending investments,
     net                                        $7,691,417         $6,799,850
    Corporate tenant lease assets, net           3,177,585          3,084,794
    Other investments                              444,649            407,617
    Total assets                                12,105,978         11,059,995
    Debt obligations                             8,820,821          7,833,437
    Total liabilities                            9,001,630          8,034,394
    Total shareholders' equity                   3,068,582          2,986,863



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

                                                       Three Months Ended
                                                            March 31,
                                                    2007               2006
    REVENUES

    Interest income                             $180,860             $126,048
    Operating lease income                        81,486               81,914
    Other income                                  28,475               13,468
      Total revenues                             290,821              221,430

    COSTS AND EXPENSES

    Interest expense                             128,539               93,533
    Operating costs - corporate
     tenant lease assets                           6,852                5,412
    Depreciation and amortization                 20,092               18,673
    General and administrative (1)                37,550               19,133
    Provision for loan losses                      5,000                1,000
      Total costs and expenses                   198,033              137,751

    Income from continuing operations
      before other items                          92,788               83,679
         Equity in earnings (loss) from
          joint ventures                          (1,351)                 286
         Minority interest in
          consolidated entities                      564                 (248)
    Income from continuing operations             92,001               83,717

           Income from discontinued
            operations                               680                2,087
           Gain from discontinued
            operations                             1,415                2,182
    Net income                                    94,096               87,986

    Preferred dividends                          (10,580)             (10,580)

    Net income allocable to common
     shareholders and HPU holders                $83,516              $77,406

    Net income per common share
         Basic                                     $0.64                $0.67
         Diluted (2)                               $0.64                $0.66

    Net income per HPU share
         Basic (3)                               $122.00              $126.20
         Diluted (2) (4)                         $120.93              $125.00


    (1) For the three months ended March 31, 2007 and 2006, includes $4,409
        and $1,204 of stock-based compensation expense.


    (2) For the three months ended March 31, 2007 and 2006, includes the
        allocable share of $28 of joint venture income.


    (3) For the three months ended March 31, 2007 and 2006, $1,830 and $1,893
        of net income is allocable to HPU holders, respectively.


    (4) For the three months ended March 31, 2007 and 2006, $1,814 and $1,875
        of net income is allocable to HPU holders, respectively.



                                iStar Financial Inc.
                           Earnings Per Share Information
                      (In thousands, except per share amounts)
                                    (unaudited)

                                                        Three Months Ended
                                                             March 31,
                                                      2007               2006
    EPS INFORMATION FOR COMMON SHARES

    Income from continuing operations
     per common share (1)
        Basic                                        $0.63              $0.63
        Diluted (2)                                  $0.62              $0.62

    Net income per common share
        Basic                                        $0.64              $0.67
        Diluted (2)                                  $0.64              $0.66

    Weighted average common shares
     outstanding
        Basic                                      126,693            113,243
        Diluted (2)                                127,867            114,357

    EPS INFORMATION FOR HPU SHARES

    Income from continuing operations
     per HPU share (1)
        Basic                                      $118.93            $119.27
        Diluted (2)                                $117.87            $118.07

    Net income per HPU share (3)
        Basic                                      $122.00            $126.20
        Diluted (2)                                $120.93            $125.00

    Weighted average HPU shares
     outstanding
        Basic                                           15                 15
        Diluted (2)                                     15                 15

    (1) For the three months ended March 31, 2007 and 2006, excludes preferred
        dividends of $10,580.


    (2) For the three months ended March 31, 2007 and 2006, includes the
        allocable share of $28 of joint venture income.


    (3) As more fully explained in the Company's quarterly SEC filings, three
        plans of the Company's HPU program vested in December 2002, December
        2003 and December 2004, respectively. Each of the respective plans
        contain 5 HPU shares. Cumulatively, these 15 shares were entitled to
        $1,830 and $1,893 of net income for the three months ended March 31,
        2007 and 2006, respectively. On a diluted basis, these cumulative 15
        shares were entitled to $1,814 and $1,875 of net income for the three
        months ended March 31, 2007 and 2006, respectively.



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

                                                       Three Months Ended
                                                            March 31,
                                                     2007               2006
    ADJUSTED EARNINGS (1)

    Net income                                     $94,096            $87,986
    Add: Depreciation, depletion and
     amortization                                   21,878             21,012
    Add: Joint venture income                           30                 30
    Add: Joint venture depreciation,
     depletion and amortization                     10,837              2,724
    Add: Amortization of deferred
     financing costs                                 6,444              6,113
    Less: Preferred dividends                      (10,580)           (10,580)
    Less: Gain from discontinued
     operations                                     (1,415)            (2,182)

    Adjusted earnings allocable to
     common shareholders and HPU holders:
       Basic                                      $121,260           $105,073
       Diluted                                    $121,290           $105,103

    Adjusted earnings per common share:
       Basic (2)                                     $0.94              $0.91
       Diluted (3)                                   $0.93              $0.90

    Weighted average common shares outstanding:
       Basic                                       126,693            113,243
       Diluted                                     127,867            114,357

    Common shares outstanding at end of period:
       Basic                                       126,708            113,268
       Diluted                                     127,883            114,375

    (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 three months ended March 31, 2007 and 2006, excludes $2,657
        and $2,569 of net income allocable to HPU holders, respectively.

    (3) For the three months ended March 31, 2007 and 2006, excludes $2,634
        and $2,545 of net income allocable to HPU holders, respectively.



                               iStar Financial Inc.
                           Consolidated Balance Sheets
                                  (In thousands)


                                                 As of             As of
                                             March 31, 2007  December 31, 2006
                                              (unaudited)
    ASSETS

    Loans and other lending investments, net    $7,691,417         $6,799,850
    Corporate tenant lease assets, net           3,177,585          3,084,794
    Other investments                              444,649            407,617
    Investments in joint ventures                  366,453            382,030
    Assets held for sale                            24,124              9,398
    Cash and cash equivalents                      126,873            105,951
    Restricted cash                                 28,631             28,986
    Accrued interest and operating lease
     income receivable                              81,703             72,954
    Deferred operating lease income
     receivable                                     83,629             79,498
    Deferred expenses and other assets              63,178             71,181
    Goodwill                                        17,736             17,736
          Total assets                         $12,105,978        $11,059,995



    LIABILITIES AND SHAREHOLDERS' EQUITY

    Accounts payable, accrued expenses
     and other liabilities                        $180,809           $200,957

    Debt obligations:
      Unsecured senior notes                     7,095,012          6,250,249
      Unsecured revolving credit
       facilities                                1,112,229            923,068
      Secured term loans                           515,568            562,116
      Other debt obligations                        98,012             98,004
        Total liabilities                        9,001,630          8,034,394
    Minority interest in consolidated
     entities                                       35,766             38,738
    Shareholders' equity                         3,068,582          2,986,863
          Total liabilities and
           shareholders' equity                $12,105,978        $11,059,995



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

    PERFORMANCE STATISTICS
                                                            Three Months Ended
    Net Finance Margin                                        March 31, 2007

    Weighted average GAAP yield of loan
     and CTL investments                                                9.69%
    Less: Cost of debt                                                 (6.42%)
    Net Finance Margin (1)                                              3.27%

    Adjusted Return on Average Common Book Equity

    Adjusted basic earnings allocable to
     common shareholders and HPU holders (2)                         $121,260
    Adjusted basic earnings allocable to
     common shareholders and HPU holders -
     Annualized (A)                                                  $485,040

    Average total book equity                                      $3,027,723
    Less: Average book value of preferred equity                     (506,176)
    Average common book equity (B)                                 $2,521,547
    Adjusted Return on Average Common Book
     Equity (A) / (B)                                                   19.2%

    Efficiency Ratio

    General and administrative expenses (C)                           $37,550
    Total revenue (D)                                                $290,821
    Efficiency Ratio (C) / (D)                                          12.9%

    (1)  Weighted average GAAP yield is the annualized sum of interest income
         and operating lease income (excluding other income), divided by the
         sum of average gross corporate tenant lease assets, average loans and
         other lending investments, average SFAS No. 141 purchase intangibles
         and average assets held for sale over the period.  Cost of debt is
         the annualized sum of interest expense and operating costs-corporate
         tenant lease assets, divided by the average gross debt obligations
         over the period.  Operating lease income and operating costs-
         corporate tenant lease assets exclude SFAS No. 144 adjustments from
         discontinued operations of $980 and $133, respectively.  The Company
         does not consider net finance margin to be a measure of the Company's
         liquidity or cash flows.  It is one of several measures that
         management considers to be an indicator of the profitability of its
         operations.

    (2)  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
                                                            Three Months Ended
                                                              March 31, 2007
    Book debt (A)                                                   $8,820,821

    Book equity                                                     $3,068,582
    Add: Accumulated depreciation/depletion
     and loan loss reserves                                            456,653
    Sum of book equity, accumulated
     depreciation/depletion and loan loss
     reserves (B)                                                   $3,525,235

    Book Debt / Sum of Book Equity,
     Accumulated Depreciation/Depletion
     and Loan Loss Reserves (A) / (B)                                     2.5x

    Ratio of Earnings to Fixed Charges                                    1.8x

    Ratio of Earnings to Fixed Charges and
     Preferred Stock Dividends                                            1.7x

    Interest Coverage

    EBITDA (1) (C)                                                    $255,350
    GAAP interest expense (D)                                         $128,539

    EBITDA / GAAP Interest Expense (C) / (D)                              2.0x

    Fixed Charge Coverage

    EBITDA (1) (C)                                                    $255,350

    GAAP interest expense                                             $128,539
    Add: Preferred dividends                                            10,580
    Total GAAP interest expense and
     preferred dividends (E)                                          $139,119

    EBITDA / GAAP Interest Expense and
     Preferred Dividends (C) / (E)                                        1.8x

    RECONCILIATION OF NET INCOME TO EBITDA

    Net income                                                         $94,096
    Add: GAAP interest expense                                         128,539
    Add: Depreciation, depletion and
     amortization                                                       21,878
    Add: Joint venture depreciation,
     depletion and amortization                                         10,837

    EBITDA (1)                                                        $255,350

    (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)

    Three Months Ended
    March 31, 2007                LOAN ORIGINATIONS


                                                    Total/              OTHER
                             Fixed     Floating   Weighted  CORPORATE  INVEST-
                              Rate       Rate      Average    LEASING   MENTS

    Amount funded            $82,498  $1,026,856  $1,109,354  $20,000   $5,226
    Weighted average GAAP
     yield                    12.62%       8.24%       8.56%   10.55%      N/A
    Weighted average all-
     in spread/margin
     (basis points) (1)          804         328           -      586      N/A
    Weighted average first
     $ loan-to-value ratio    34.34%      12.25%      13.89%      N/A      N/A
    Weighted average last
     $ loan-to-value ratio    67.40%      63.98%      64.23%      N/A      N/A


    UNFUNDED COMMITMENTS

    Number of assets with unfunded
     commitments                                                           124

    Discretionary commitments                                          $16,893
    Non-discretionary commitments                                    3,228,105
    Total unfunded commitments                                      $3,244,998
    Estimated weighted average funding
     period                                            Approximately 2.9 years

    UNENCUMBERED ASSETS                                            $11,509,044

    RISK MANAGEMENT STATISTICS
      (weighted average risk rating)       2007             2006
                                           March   Dec     Sept   June   March
                                            31,     31,     30,    30,    31,
    Structured Finance Assets
     (principal risk)                       2.64   2.74    2.75   2.67    2.71
    Corporate Tenant Lease Assets           2.45   2.37    2.39   2.38    2.42

                                            (1=lowest risk; 5=highest risk)


    (1)  Represents spread over base rate LIBOR (floating-rate loans) and
         interpolated U.S. Treasury rates (fixed-rate loans and corporate
         leasing transactions) during the quarter.



                             iStar Financial Inc.
                           Supplemental Information
                   (In thousands, except per share amounts)
                                 (unaudited)

    LOANS AND OTHER LENDING
    INVESTMENTS CREDIT STATISTICS

                                                       As of
                                         March 31, 2007     December 31, 2006

    Carrying value of
    non-performing loans /
     As a percentage of total assets    $77,725    0.64%    $61,480      0.56%

    Reserve for loan losses /
     As a percentage of total assets    $57,201    0.47%    $52,201      0.47%
     As a percentage of
      non-performing loans                           74%                   85%


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

                                                                Year Ending
                                                             December 31, 2007

    Earnings per diluted common share guidance                  $2.70 -  $2.90
    Add:  Depreciation, depletion and
     amortization per diluted common share                      $0.90 -  $1.30
    Adjusted earnings per diluted
     common share guidance                                      $3.80 -  $4.00


    (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
     MARCH 31, 2007 (1)

    Security Type

    First Mortgages / Senior Loans                     $6,068            50.8%
    Corporate Tenant Leases                             3,656            30.6
    Mezzanine / Subordinated Debt                       1,680            14.0
    Other Investments                                     551             4.6
          Total                                       $11,955           100.0%

    Collateral Type

    Apartment / Residential                            $2,139            17.9%
    Office (CTL)                                        1,770            14.8
    Other                                               1,561            13.0
    Retail                                              1,465            12.3
    Industrial / R&D                                    1,444            12.1
    Mixed Use / Mixed Collateral                        1,294            10.8
    Entertainment / Leisure                             1,113             9.3
    Hotel                                                 777             6.5
    Office (Lending)                                      392             3.3
          Total                                       $11,955           100.0%

    Collateral Location

    West                                               $2,478            20.7%
    Southeast                                           1,902            15.9
    Northeast                                           1,826            15.3
    Various                                             1,270            10.6
    Mid-Atlantic                                        1,033             8.6
    South                                                 991             8.3
    Central                                               810             6.8
    International                                         580             4.9
    Southwest                                             518             4.3
    Northcentral                                          353             3.0
    Northwest                                             194             1.6
          Total                                       $11,955           100.0%

    (1)  Figures presented prior to loan loss reserves, accumulated
         depreciation and impact of Statement of Financial Accounting
         Standards No. 141, "Business Combinations."

SOURCE iStar Financial Inc.

Catherine D. Rice, Chief Financial Officer
or
Andrew G. Backman, Vice President
Investor Relations
both of iStar Financial Inc.
1-212-930-9400

http://www.istarfinancial.com

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