<Page>
Exhibit 99.1
iStar Financial
November 2002
<Page>
DISCLAIMER [LOGO]
- --------------------------------------------------------------------------------
Statements in this presentation 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. (the "Company") 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 the Company'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 the Company's SEC reports and the
prospectus supplement and accompanying prospectuses for the offering.
We use the term "adjusted earnings" in this presentation. A definition of
adjusted earnings and a detailed reconciliation of adjusted earnings to GAAP net
income appears at the end of this presentation.
2
<Page>
OFFERING SUMMARY [LOGO]
- --------------------------------------------------------------------------------
SHARES OFFERED: 8 million primary common shares
2 million secondary common shares
RECENT PRICE: $28.20
CURRENT DIVIDEND YIELD: 8.9%
BOOK-RUNNER: Lehman Brothers
LEAD MANAGER: Merrill Lynch & Co.
CO-MANAGERS: Banc of America Securities LLC
Bear, Stearns & Co. Inc.
Goldman, Sachs & Co.
UBS Warburg
3
<Page>
RECENT DEVELOPMENTS [LOGO]
- --------------------------------------------------------------------------------
o Exceeded $1 billion in net asset growth for 12 months ended 9/30/02.
> Completed an additional $800 million of gross volume with repeat
customers.
o Generated record adjusted earnings of $272.2 million for 12 months ended
9/30/02, up 8.8% from prior 12 months.
o Credit quality remains strong despite challenging economic environment.
> No loan losses.
> Only two loans on non-accrual ($5.5 million total).
o Increased committed credit facilities to $2.7 billion ($1.3 billion
outstanding pre-offering).
o Completed $900 million match-funded STARs offering at a weighted average
coupon of LIBOR+56 bp.
o Received investment grade senior unsecured credit rating from Fitch.
o Moody's and S&P raised ratings outlook to "positive" for a move to
investment grade.
o Increased quarterly dividend to $0.63 for 2002 and announced 5.2% expected
increase for Q1'03 (to $0.6625).
o Delivered 29.2% total rate of return since 9/30/01.
4
<Page>
OUR MARKET FOCUS [LOGO]
- --------------------------------------------------------------------------------
Dominant provider of structured financing for transactions where corporate
credit, real estate and capital markets intersect.
<Table>
CORPORATE TENANT LEASING
-------------------------
LONG-TERM SALE/LEASEBACKS
CORPORATE CREDIT REAL ESTATE
MARKETS MARKETS
iSTAR
CORPORATE STRUCTURED REAL
FINANCE CAPITAL MARKETS ESTATE FINANCE
---------------- ---------------
SECURED DEBT SENIOR MORTGAGES
SENIOR DEBT JUNIOR MORTGAGES
SUBORDINATE DEBT MEZZANINE LOANS
</Table>
5
<Page>
OUR FRANCHISE [LOGO]
- --------------------------------------------------------------------------------
Unique business platform serving as "private banker" to high-end private and
corporate owners of real estate who require highly structured financing.
<Table>
MORE EXPERTISE, HIGHER MARGINS
($100 billion market)
iSTAR FINANCIAL
(few competitors)
($1 trillion market)
LIFE COMPANIES,
COMMERCIAL BANKS
(multiple competitors)
($300 billion market)
CONDUITS
(pure commodity) --->
</Table>
Sources: Rosen Consulting Group / Lend Lease Real Estate Investments.
- --------------------------------------------------------------------------------
FLEXIBILITY
Efficient Market--Commodity Products Inefficient Market--Structured Products
6
<Page>
OUR FRANCHISE [LOGO]
- --------------------------------------------------------------------------------
iStar Financial has become the largest dedicated provider of creative capital
solutions to high-end U.S. corporate and real estate customers by:
o Consistently delivering value-added financial solutions with integrity and
reliability to our customers for nearly ten years.
o Developing brand recognition in our targeted markets through advertising,
customer events, press coverage and industry conferences.
ROBERT SARVER - Managing "WE LIKE TO WORK WITH ENTREPRENEURIAL LENDERS WHO
Partner, Southwest Value UNDERSTAND OUR BUSINESS AND CAN MOVE QUICKLY.
Partners ISTAR FINANCIAL PROVIDED A CREATIVE FINANCING
ALTERNATIVE THAT GAVE US TAX DEFERRED PROCEEDS
UP-FRONT AND THE OPPORTUNITY TO EARN SIGNIFICANT
UPSIDE AS RENTAL RATES INCREASED IN THE MARKET."
ROBERT LANDIN - Managing "WE NEEDED TO MAKE SURE OUR LENDER WOULD STICK
Director, Olympus Real WITH US AS THE CAPITAL STRUCTURE FOR OUR LEVERAGED
Estate Corporation BUYOUT OF WALDEN RESIDENTIAL EVOLVED. ISTAR WAS
NOT ONLY FLEXIBLE, BUT DID ENOUGH WORK UP-FRONT TO
HELP US SOLVE MANY OF THE ISSUES THAT CAME UP
ALONG THE WAY. ISTAR REAFFIRMED THIS COMMITMENT IN
TWO SUBSEQUENT FINANCINGS WE'VE SINCE DONE WITH
THEM."
AL HOFFMAN - CEO, "HAVING COMPLETED FIVE LARGE, HIGHLY STRUCTURED
WCI Communities FINANCINGS WITH ISTAR FINANCIAL, WE HAVE BEEN VERY
IMPRESSED BY THEIR ABILITY TO QUICKLY UNDERSTAND
ALL THE MOVING PIECES OF OUR CORPORATE CREDIT AND
TO STRUCTURE CREATIVE LENDING SOLUTIONS WHICH MEET
OUR NEEDS."
RICHARD COOPER - Chairman, "I DON'T KNOW ANYONE BETTER AT DEVELOPING
Amelia Island Company 'OUTSIDE-THE-BOX' SOLUTIONS TO REAL ESTATE
BORROWERS' NEEDS. IT'S A PLEASURE TO WORK WITH A
LENDER WHO THINKS ABOUT VALUE CREATION THE SAME
WAY WE DO."
7
<Page>
HIGH-QUALITY CUSTOMERS [LOGO]
- --------------------------------------------------------------------------------
[LOGOS]
8
<Page>
HIGH-QUALITY COLLATERAL [LOGO]
- --------------------------------------------------------------------------------
[PHOTOS]
9
<Page>
WHAT WE DO [LOGO]
- --------------------------------------------------------------------------------
<Table>
LOANS $5.3 BILLION LOAN/CTL ASSETS LEASES
----- ------
$3.0 BILLION $2.3 BILLION
o 67% 1ST MORTGAGES o 52% INVESTMENT
GRADE CREDITS
> 0% - 66% LTV
o 86% PUBLIC COMPANIES
o 33% CORPORATE LOANS/ --------------
2ND MORTGAGES/ LOANS / LEASES o 9.1 YEAR AVERAGE TERM
PARTNERSHIP LOANS --------------
o 117 CORPORATE CREDITS/
> 59% - 73% LTV 176 FACILITIES
o DSCR: 2.1X o MISSION-CRITICAL
INVESTMENT FOCUS
o 78 LOANS/402 PROPERTIES
</Table>
- ----------
As of September 30, 2002.
10
<Page>
ASSET QUALITY AND DIVERSIFICATION [LOGO]
- --------------------------------------------------------------------------------
Asset base broadly diversified by year of origination, asset type, obligor,
geography and property type.
Loan and CTL Assets at September 30, 2002 ($5.3 billion)
=================== ================= ===============
FINANCING STRUCTURE GEOGRAPHIC REGION COLLATERAL TYPE
- ------------------- ----------------- ---------------
[PIE CHART OMITTED] [PIE CHART OMITTED] [PIE CHART OMITTED]
===============================================================================
11
<Page>
INVESTMENT/UNDERWRITING PROCESS [LOGO]
- --------------------------------------------------------------------------------
o Initial transaction screening and evaluation using proprietary Six Point
Methodology SM.
> Transaction Source/Review > Structure/Control
> Collateral Quality > Alternative Investment Test
> Equity Sponsor/Corporate Lessee > Liquidity/Match Funding
o Intensive underwriting process provides for comprehensive review of
potential investments from all key disciplines.
> Investments
> Credit
> Risk Management
> Legal
> Capital Markets
o Multi-tiered approval process.
> $0 - $30 Million: Management Investment Committee
> $30- $50 Million: Board Investment Committee
> Over $50 Million: Full Board of Directors
12
<Page>
OUR FRANCHISE [LOGO]
- --------------------------------------------------------------------------------
Approximately 65% of our originations come from existing customers
or other direct sources. The remaining 35% comes from select third-party
intermediaries whom we have familiarized over the years with our unique
brand of financial solutions.
2001 ORIGINATION SOURCES
[The following table was represented by a pie chart in the printed material.]
Existing Customers 24%
Direct - Customer 18%
Direct - Other Lenders 23%
Other Third Parties 35%
13
<Page>
MANAGING GROWTH [LOGO]
- --------------------------------------------------------------------------------
Structured and originated $6.8 billion of financing transactions in nine-year
history, with $2.9 billion of volume from repeat customers.
[The following table was represented by a bar chart in the printed material.]
CUMULATIVE FINANCING TRANSACTIONS
($ millions)
<Table>
<Caption>
12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01 9/30/02
- -------- -------- -------- -------- -------- -------- -------- -------
$768 (1) $933 (1) $1,210 $2,250 $3,267 $4,283 $5,517 $6,819
iStar Financial Private Predecessors iStar Financial
</Table>
- ----------
(1) Includes third-party senior positions originated, placed and/or structured
by SFI.
14
<Page>
SUPERIOR BUSINESS MODEL [LOGO]
- --------------------------------------------------------------------------------
o LESS COMPETITION: Provide level of service, knowledge, creativity and
flexibility unavailable from other lenders. Target premium pricing segment
of market.
> Avoid commodity businesses such as conduit lending, CMBS, RMBS.
o LESS LEVERAGE, HIGHER ROE: Higher ROA yields higher ROE with lower
leverage.
> Nearly $2 billion of tangible equity capital in place to support
future expansion.
o LOWER OPERATING COSTS: Better operating efficiency creates lower beta
business.
o NO TAXES: REIT structure provides superior returns on equity at a fraction
of the leverage of taxable finance companies.
o LESS INTEREST RATE EXPOSURE: Minimal exposure to changes in interest rates
and mismatched maturities.
> 100 basis point move in short-term rates has minimal impact on
earnings.
o MORE MANAGEMENT EXPERTISE: Management team with leading talent/experience
across all key success disciplines - principals, not processors.
> Highly disciplined risk management minimizes losses and surprises.
o MORE ALIGNMENT WITH SHAREHOLDER INTERESTS: Employees and directors own
approximately $150 million of the Company's common equity.
15
<Page>
DEEP SENIOR MANAGEMENT TEAM [LOGO]
- --------------------------------------------------------------------------------
Management's expertise includes extensive experience across all key disciplines
necessary to execute our business plan.
[The following table was represented by an organizational chart in the printed
material.]
<Table>
Sugarman*
Chairman/CEO
17 years
Haber
President
14 years
Abrams* Cozzi* Digel* Dorsch* Rice* Curtis* O'Connor* Matis*
EVP EVP EVP EVP CFO SVP-Credit EVP - COO EVP - General
Investments Investments Investments Investments Counsel
26 years 12 years 21 years 19 years 16 years 17 years 21 years 30 years
Jones* Lodge* Olmstead*
EVP EVP EVP
Investments Investments Investments
22 years 20 years 22 years Richardson Sinnett Tretola Rubin Dugan
SVP - Capital SVP - VP SVP - Loan SVP - HR, Asst.
Markets Project Controller Servicing Gen. Counsel
Finance
Investments Finance/Acctg. Project Mgmt. Asset Mgmt. Loan Legal
Servicing
11 25 6 34 12 3
Professionals Professionals Professionals Professionals Professionals Professionals
</Table>
- ----------
*Denotes member of Investment Committee.
16
<Page>
COMPREHENSIVE RISK MANAGEMENT [LOGO]
- --------------------------------------------------------------------------------
iSTAR FINANCIAL HAS ONE OF THE LOWEST LOSS RATIOS IN THE FINANCE INDUSTRY.
o 50+ person risk management team with in-house expertise in asset
management, corporate credit, loan servicing, project management and
engineering.
o Proactive strategy centered around information sharing, frequent customer
contact and "early warning" system.
o Compilation and analysis of asset information is distributed on-line to all
iStar Financial professionals on a continuous, real-time basis.
o Comprehensive risk rating process that enables us to evaluate, monitor and
pro-actively manage asset-specific credit issues and identify credit trends
on a portfolio-wide basis.
[The following table was represented by a bar chart in the printed material.]
Weighted Average Structured Finance Risk Ratings
(1=lowest risk, 5=highest risk)
<Table>
<Caption>
1998 1999 2000 2001 2002
- ---- ------------------------- ----------------------- ---------------------- ----------------
12/31 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31 3/31 6/30 9/30
2.71 2.64 2.62 2.63 2.54 2.55 2.55 2.59 2.50 2.53 2.68 2.82 2.75 2.77 2.74 2.81
</Table>
17
<Page>
MINIMAL NON-ACCRUAL LOANS [LOGO]
- --------------------------------------------------------------------------------
[The following table was represented by a bar chart in the printed material.]
<Table>
% of Total Book Assets
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 0.9% 0.9% 0.1% 0.1% 0.2% 0.2% 0.1% 0.1% 0.1% 0.1%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
\ / \ / \ / \ / \ /
1998 1999 2000 2001 2002 YTD
</Table>
18
<Page>
LEASE EXPIRATION PROFILE [LOGO]
- --------------------------------------------------------------------------------
At September 30, 2002, the weighted average remaining lease term of iStar
Financial's corporate tenant leasing portfolio was 9.1 years and the portfolio
was 97% leased.
LEASE EXPIRATION PROFILE
(AT SEPTEMBER 30, 2002)
[The following table was represented by a bar chart in the printed material.]
[EDGAR REPRESENTATION OF GRAPHIC]
2002 0.9%
2003 2.5%
2004 4.4%
2005 3.4%
2006 5.6%
2007 3.9%
2008 1.7%
2009 27.5%
19
<Page>
DEEP, BROAD CAPITAL RESOURCES [LOGO]
- --------------------------------------------------------------------------------
SECURED CREDIT FACILITIES
o State-of-the-art, committed revolvers from RBS, Deutsche Bank, Lehman
Brothers and Goldman Sachs.
o $2.4 billion (capacity) in place.
o $1.3 billion outstanding.
o Primary source of working capital.
MATCH FUNDING FACILITIES
o iStar Asset Receivables (STARsSM).
> Recent upgrades strengthen funding capabilities and lower costs.
o Term lending relationships with a dozen commercial banks and insurance
companies.
UNSECURED CREDIT FACILITIES
o Leading commercial banks, including Bank of America, CIBC, Deutsche Bank,
Fleet and UBS.
o $300 million (capacity).
o $0 outstanding.
UNSECURED CORPORATE BONDS
o Ba1 (+) / BB+ (+) / BBB- senior unsecured credit ratings.
> Positive credit momentum should lead to additional investment grade
ratings within 9-15 months.
o $625 million outstanding.
- ----------
As of September 30, 2002.
20
<Page>
CONSERVATIVE FINANCIAL POLICIES [LOGO]
- --------------------------------------------------------------------------------
o SFI's leverage policies provide for a maximum 2.0x book debt/equity ratio.
> Ability to match-fund in long-term, secured debt markets if credit
facilities, corporate debt or equity is unavailable.
> 15 - 20% sustainable ROE target.
o Maintain large equity base.
> $1.9 billion tangible book equity.
o Maintain diversified sources of investment capital.
o Match-funding discipline: maturities and interest rates.
> 100 basis point change in short term rates has minimal impact on
adjusted earnings.
o Comprehensive reserve policies.
> Loans: Loss reserves and asset-specific cash reserves total $168
million (567 basis points of book assets).
> CTLs: Cash deposits, letters of credit and accumulated depreciation
total $217 million (936 basis points of book assets).
21
<Page>
PRO FORMA CAPITALIZATION [LOGO]
- --------------------------------------------------------------------------------
<Table>
<Caption>
AS OF
SEPTEMBER 30, 2002
------------------------------
(IN THOUSANDS)
ACTUAL AS ADJUSTED(1)
---------- --------------
LONG-TERM DEBT, INCLUDING CURRENT MATURITIES:
Unsecured senior notes $ 612,337 $ 612,337
Unsecured revolving credit facilities 0 0
Secured revolving credit facilities 1,258,427 1,044,607
Secured term loans 622,743 622,743
iStar Asset Receivables secured notes 877,770 877,770
Other debt obligations 16,283 16,283
---------- ----------
TOTAL LONG-TERM DEBT $3,387,560 $3,173,740
SHAREHOLDERS' EQUITY $1,877,545 $2,091,365
TOTAL LONG-TERM DEBT/SHAREHOLDERS' EQUITY 1.8x 1.5x
</Table>
Notes:
- ----------
(1) Assumes 8.0 million primary shares sold at the current price of $28.20 per
share, a 5.0% gross underwriting spread and $500,000 of offering expenses.
22
<Page>
SUPERIOR RISK-ADJUSTED RETURNS [LOGO]
- --------------------------------------------------------------------------------
SFI has generated superior risk-adjusted returns on invested capital...
[EDGAR REPRESENTATION OF CHART]
1998(1) 1999 2000 2001
------- ---- ---- ----
ROAA 6.0% 6.4% 6.7% 7.1%
ROAE 12.4% 14.7% 15.8% 17.7%
- ----------
(1) Annualized - Company went public March 18, 1998.
23
<Page>
SOLID EARNINGS GROWTH [LOGO]
- --------------------------------------------------------------------------------
....and grown annual adjusted earnings by 173% since going public.
[EDGAR REPRESENTATION OF CHART]
1998(2) 1999 2000 2001
------- -------- ------- -------
Adjusted Earnings (in millions)(1)
$ 93.60 $ 127.80 $ 230.7 $ 255.1
- ----------
(1) See the Appendix of this presentation for a detailed reconciliation of
adjusted earnings to GAAP net income.
(2) Annualized--Company went public March 18, 1998.
24
<Page>
COMPELLING TOTAL RATE OF RETURN [LOGO]
- --------------------------------------------------------------------------------
Average annual total rates of return since 3/20/98(1)
[The following table was represented by a bar chart in the printed material.]
<Table>
Annual Shareholder Returns
(Assumes All Dividends Reinvested)
28.6% -1.7% -3.4% -6.3%
iStar Financial Russell 1000 Financial S&P 500 Index NASDAQ
Index
</Table>
- ----------
(1) iStar issued 53 million shares, comprising 99% of its then outstanding
common stock, at $15.00 per share on March 18, 1998.
25
<Page>
COMPELLING TOTAL RATE OF RETURN [LOGO]
- --------------------------------------------------------------------------------
Total rates of return since 12/31/99
[The following table was represented by a bar chart in the printed material.]
<Table>
Annual Shareholder Returns
(Assumes All Dividends Reinvested)
122.8% -5.8% -36.3% -66.3%
iStar Financial Russell 1000 Financial S&P 500 Index NASDAQ
Index
</Table>
26
<Page>
STRONG CURRENT RETURNS [LOGO]
- --------------------------------------------------------------------------------
o Increased quarterly dividends 80% since going public.
o Conservative dividend payout ratios (78%-82% of adjusted earnings) create
substantial safety cushion.
o 20%-25% of 2002 dividend expected to represent tax-deferred return of
capital.
[The following table was represented by a bar chart in the printed material.]
<Table>
$0.35 $0.38 $0.41 $0.42 $0.43 $0.44 $0.57 $0.60 $0.60 $0.60 $0.60 $0.6125 $0.6125 $0.6125 $0.6125 $0.63 $0.63 $0.63
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
\ / \ / \ / \ / \ /
1998 1999 2000 2001 2002 YTD
</Table>
27
<Page>
SIGNIFICANT RATINGS UPSIDE POTENTIAL [LOGO]
- --------------------------------------------------------------------------------
iStar Financial outscores the A-rated finance company peer
group on both risk and profitability metrics.
- -------------------------------------------- ------------------ ----------------
iStar Peer Group
Financial Median (1)
- -------------------------------------------- ------------------ ----------------
Senior Unsecured Credit Rating BBB-/BB+(+)/ A/A-/A3
Ba1(+)
- -------------------------------------------- ------------------ ----------------
Tangible Book Equity ($ in millions) $1,878 $902
- -------------------------------------------- ------------------ ----------------
Total Liabilities / Tangible Equity 1.9x 7.4x
- -------------------------------------------- ------------------ ----------------
EBIDA/ Interest 2.5x 2.1x
- -------------------------------------------- ------------------ ----------------
ROAA 6.1% 3.6%
- -------------------------------------------- ------------------ ----------------
G&A/Revenue 6.5% 17.8%
- -------------------------------------------- ------------------ ----------------
Rating Agency Risk-Based Capital
Adequacy Score 2.01 0.93
- -------------------------------------------- ------------------ ----------------
- ----------
(1) Peer Group includes CIT Group, Financial Federal Corp., GATX Financial,
Textron Financial and Transamerica Finance Corp. Balance sheet data as of
latest available quarter. Income statement data as of latest available
trailing twelve months.
28
<Page>
CORPORATE HIGHLIGHTS [LOGO]
- --------------------------------------------------------------------------------
o Largest independent finance company in attractive $100 - $150 billion
market niche.
o Consistent, nine-year track record of superior results.
o Intensive risk management and employee ownership lead to best loss
performance in finance industry.
o Significant investor upside could be realized through:
> Continued strong total rate of return (growth and dividends).
> Potential for multiple expansion.
> Potential for ratings upgrade.
29
<Page>
[LOGO]
- --------------------------------------------------------------------------------
APPENDIX
30
<Page>
CASE STUDY: PORTFOLIO FINANCE [LOGO]
- --------------------------------------------------------------------------------
San Diego Office Portfolio
- ------------------------------------ --------------------------------------
o Collateral: Cross collateralized
portfolio of downtown office
buildings totaling 1.1 million
sf.
o Equity Sponsor: Southwest Value
Partners, a leading private real
estate investment firm.
o Investment Structure: 1st and 2nd
mortgages.
[PHOTO]
o Credit Statistics:
> LTV: 0% - 70%.
> DSCR: 2.43x.
o Match Funding Vehicle: STARsSM.
o Match-Funded ROE: 18.14%.
- ------------------------------------ --------------------------------------
31
<Page>
CASE STUDY: STRUCTURED FINANCE [LOGO]
- --------------------------------------------------------------------------------
Charlotte, NC
- ------------------------------------ --------------------------------------
o Collateral: 1,794,941 sf,
11-building office / mixed use
corporate campus on 206 acres.
o Equity Sponsor: Blackacre Capital
Management, the real estate
investment arm of Cerberus
Capital.
o Investment Structure: 1st
mortgage.
[PHOTO] o Credit Statistics:
> LTV: 0% - 78%.
> DSCR: 1.92x.
o Match Funding Vehicle: STARsSM
(2003).
o Match-Funded ROE: 18.32%.
- ------------------------------------ --------------------------------------
32
<Page>
CASE STUDY: CORPORATE FINANCE [LOGO]
- --------------------------------------------------------------------------------
140 Apartment Communities
- ------------------------------------ ---------------------------------------
o Collateral: Diversified portfolio
of 140 apartment communities
located primarily in 10 major U.S.
markets.
o Equity Sponsor: Olympus Real
Estate.
o $400 million equity
investment junior to iStar.
o Investment Structure: Subordinate
capital.
[PHOTO]
o Credit Statistics:
> LTV: 61% - 83%.
> DSCR: 1.31x.
o Match Funding Vehicle: Syndicated
term loan.
o Match-Funded ROE: 21.81%.
- ------------------------------------ ---------------------------------------
33
<Page>
CASE STUDY: CORPORATE TENANT LEASING [LOGO]
- --------------------------------------------------------------------------------
Tyson's Corner, VA
- ------------------------------------ ---------------------------------------
o Collateral: 574,558 square foot
newly-constructed Class A+ office
building with structured parking.
o Corporate Sponsor: Northrop
Grumman Corporation (NYSE: NOC).
o Credit Rating: Baa3 / BBB-.
[PHOTO]
o Investment Structure: Credit
tenant lease guaranteed by
Northrop.
o Match Funding Vehicle: STARsSM
(2003).
o Match-Funded ROE: 15.00%.
- ------------------------------------ ---------------------------------------
34
<Page>
ADJUSTED EARNINGS [LOGO]
- --------------------------------------------------------------------------------
Adjusted earnings represents net income computed in accordance with GAAP,
before gain (loss) from discontinued operations, extraordinary items and
cumulative effect of change in accounting principle, plus depreciation and
amortization, less preferred stock dividends. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in our Annual Report
on Form 10-K for the fiscal year ended December 31, 2001.
We believe that to facilitate a clear understanding of the historical
operating results of our company, adjusted earnings should be examined in
conjunction with net income as shown in the "Consolidated Statements of
Operations" in our Annual Report on Form 10-K dated December 31, 2001. Adjusted
earnings should not be considered as an alternative to net income (determined in
accordance with GAAP) as an indicator of our performance, or to cash flows from
operating activities (determined in accordance with GAAP) as a measure of our
liquidity, nor is it indicative of funds available to fund our cash needs or
available for distribution to our shareholders. We believe 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 our financial performance. This is primarily because we
are a commercial finance company that focuses on real estate lending and
corporate tenant leasing; therefore, our net income (determined in accordance
with GAAP) reflects significant non-cash depreciation expense on corporate
tenant lease assets. It should be noted that our manner of calculating adjusted
earnings may differ from the calculation of similarly-titled measures by other
companies.
<Table>
<Caption>
YEARS ENDED
RECONCILIATION OF ADJUSTED EARNINGS TO GAAP NET INCOME: DECEMBER 31,
-------------------------------------------------------
2001 2000 1999 1998(1)
-------- -------- -------- -------
Net income $229,912 $217,586 $38,886 $63,775
Add: Joint venture income 965 937 1,603 0
Add: Depreciation 35,642 34,514 11,016 4,122
Add: Joint venture depreciation and amortization 4,044 3,662 365 0
Add: Amortization of deferred financing costs 20,720 13,140 6,121 3,238
Less: Preferred dividends (36,908) (36,908) (23,843) (944)
Less: Gain from discontinued operations (1,145) (2,948) 0 0
Add: Extraordinary loss early extinguishment of debt 1,620 705 0 0
Add: Cumulative effect of change in accounting principle 282 0 0 0
Less: Net income allocable to class B shares 0 0 (826) 0
Add: Cost incurred in acquiring former external advisor(2) 0 0 94,476 0
-------- -------- -------- -------
Adjusted diluted earnings allocable to common shareholders $255,132 $230,688 $127,798 $70,191
======== ======== ======== =======
</Table>
- ----------
(1) Annualized - Company went public March 18, 1998.
(2) This amount represents a non-recurring, non-cash charge of approximately
$94.5 million relating to the acquisition of our former external advisor on
November 4, 1999.
35