<Page> EXHIBIT 99.1 [GRAPHIC] [iSTAR FINANCIAL CREATIVE CAPITAL SOLUTIONS(SM) LOGO] $150,000,000 SENIOR NOTES DUE 2008 Investor Presentation March 2003 <Page> [GRAPHIC] DISCLAIMER [iSTAR FINANCIAL LOGO] The information in this investor presentation is not complete, may change without notice, is not intended to substitute for your review of the prospectus supplement and the accompanying prospectus and is qualified in its entirety and is subject to the prospectus supplement and the accompanying prospectus. 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. In addition, you should read the prospectus supplement and accompanying prospectus for the offering and particularly the information contained under the heading "Risk Factors," which contains important information about the Company and 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 document. 2 <Page> [GRAPHIC] THE OFFERING [iSTAR FINANCIAL LOGO] - - ISSUER iStar Financial Inc. (NYSE: SFI) - - ISSUE $150,000,000 Senior Unsecured Notes (Public Filing) - - MATURITY March 2008 / Non-callable - - RATINGS Moody's: Ba1 (positive) S&P: BB+ (positive) Fitch: BBB- - - USE OF PROCEEDS Repay existing indebtedness and general corporate purposes - - FINANCIAL COVENANTS Identical to existing senior notes due August 2008 1. Fixed Charge Coverage 2. Total Indebtedness to Net Worth 3. Senior Recourse Indebtedness to Net Worth Plus Subordinated Debt 4. Unencumbered Assets to Unsecured Debt (maintenance) - - MAKE WHOLE T + 50 bps 3 <Page> [GRAPHIC] OUR MARKET FOCUS [iSTAR FINANCIAL LOGO] Leading provider of structured financing for transactions where corporate credit, real estate and capital markets intersect. [CHART] 4 <Page> [GRAPHIC] OUR FRANCHISE [iSTAR FINANCIAL LOGO] Unique business platform serving as "private banker" to high-end private and corporate owners of real estate who require highly structured financing. [CHART] Sources: Rosen Consulting Group / Lend Lease Real Estate Investments / Morgan Stanley. Efficient Market - Commodity Products Inefficient Market - Structured Products 5 <Page> [GRAPHIC] WHAT WE DO [iSTAR FINANCIAL LOGO] LOANS $3.1 BILLION - - 66% 1ST MORTGAGES - 0% - 66% LTV - - 34% CORPORATE LOANS / 2ND MORTGAGES / PARTNERSHIP LOANS - 58% - 73% LTV - - DSCR: 2.2x - - 85 LOANS / 514 PROPERTIES [CHART] $5.6 BILLION LOAN/CTL ASSETS LEASES $2.5 BILLION - - 53% INVESTMENT GRADE CREDITS - - 87% PUBLIC COMPANIES - - 9.4 YEAR AVERAGE TERM - - 120 CORPORATE CREDITS / 179 FACILITIES - - MISSION-CRITICAL INVESTMENT FOCUS - ---------- As of December 31, 2002. 6 <Page> [GRAPHIC] DIVERSIFIED PRODUCT LINES [iSTAR FINANCIAL LOGO] Diversified product lines and investment strategy reflect ten years of intensive experience in a very focused, niche lending business. <Table> <Caption> AVERAGE INVESTMENT % OF % OF PRODUCT LINE DESCRIPTION SIZE (MILLIONS) ASSETS REVENUE - ------------------------ ----------------------------------------------- --------------- ------ ------- LENDING: Structured Finance Institutional-quality single assets. $ 34.2 26.5% 21.7% Corporate Finance Secured and unsecured loans to leading $ 32.5 12.3% 13.5% public and private companies. Portfolio Finance Cross-collateralized pools of real estate $ 39.7 7.1% 5.9% assets. Loan Acquisition Opportunistic loan purchases. $ 58.7 9.5% 8.8% ====== ======= SUBTOTAL: 55.4% 49.9% LEASING: Corporate Tenant Leasing Mission-critical facilities net- leased to $ 21.7 44.6% 50.1% creditworthy corporate customers. </Table> 7 <Page> [GRAPHIC] OUR FRANCHISE [iSTAR FINANCIAL LOGO] iStar Financial has become the largest dedicated provider of creative capital solutions to high-end U.S. corporate and real estate customers by: - - Consistently delivering value-added financial solutions with integrity and reliability to our customers for ten years. - - Developing brand recognition in our targeted markets through advertising, customer events, press coverage and industry conferences. <Table> ROBERT SARVER - Managing "WE LIKE TO WORK WITH ENTREPRENEURIAL LENDERS WHO Partner, Southwest UNDERSTAND OUR BUSINESS AND CAN MOVE QUICKLY. Value 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 WITH US AS THE CAPITAL STRUCTURE FOR OUR LEVERAGED Real 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." </Table> 8 <Page> [GRAPHIC] HIGH-QUALITY CUSTOMERS [iSTAR FINANCIAL LOGO] [IBM(R) LOGO] [NOKIA CONNECTING PEOPLE LOGO] [LOGO] [PEPSICO LOGO] [FEDEX(R) LOGO] [NORTHROP GRUMMAN LOGO] [OLYMPUS REAL ESTATE CORPORATION LOGO] [DAIMLER CHRYSLER LOGO] [HP LOGO] [THE MILLS(R) LOGO] [HONEYWELL LOGO] [ENTERGY(R) LOGO] [WELLS FARGO LOGO] [CHELSEA PROPERTY GROUP LOGO] [VERIZON LOGO] [LVMH MOET HENNESSY LOUIS VUITTON LOGO] [WELCH'S(R) LOGO] [UNILEVER LOGO] [AIM CO LOGO] [WELLPOINT LOGO] [CRESENT LOGO] [DRIVERS WANTED LOGO] [LEND LEASE REAL ESTATE INVESTMENTS LOGO] [DEPARTMENT OF VETERANS AFFAIRS LOGO] [THE BLACKSTONE GROUP LOGO] [CSC LOGO] [LEXMARK(TM) PASSION FOR PRINTING IDEAS.(TM) LOGO] 9 <Page> [GRAPHIC] HIGH-QUALITY COLLATERAL [iSTAR FINANCIAL LOGO] [PHOTO OF BUILDINGS] 10 <Page> [GRAPHIC] MANAGING GROWTH [iSTAR FINANCIAL LOGO] Structured and originated $7.3 billion of financing transactions in ten-year history, with $3.1 billion of volume from repeat customers. [CHART] Cumulative Financing Transactions ($ MILLIONS) <Table> <Caption> 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02 $768(1) $933(1) $1,210 $2,250 $3,267 $4,283 $5,517 $7,267 </Table> - ---------- (1) Includes third-party senior positions originated, placed and/or structured by SFI. 11 <Page> [GRAPHIC] OUR BUSINESS MODEL [iSTAR FINANCIAL LOGO] - - 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. - - LESS LEVERAGE, HIGHER ROE: Higher ROA yields higher ROE with lower leverage. - Over $2 billion of tangible equity capital in place to support future expansion. - - LOWER OPERATING COSTS: Better operating efficiency creates lower beta business. - - NO TAXES: REIT structure provides attractive returns on equity at a fraction of the leverage of taxable finance companies. - - 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. - - 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. - - MORE ALIGNMENT WITH SHAREHOLDER INTERESTS: Employees and directors own approximately $160 million of the Company's common equity. 12 <Page> [GRAPHIC] DEEP SENIOR MANAGEMENT TEAM [iSTAR FINANCIAL LOGO] Management's expertise includes extensive experience across all key disciplines necessary to execute our business plan. [CHART] - ---------- * Denotes member of Investment Committee. 13 <Page> [GRAPHIC] INVESTMENT / UNDERWRITING PROCESS [iSTAR FINANCIAL LOGO] - - Initial transactionXscreening and evaluation using proprietary Six Point Methodology(SM). - Transaction Source/Review - Collateral Quality - Equity Sponsor/Corporate Lessee - Structure/Control - Alternative Investment Test - Liquidity/Match Funding - - Intensive underwriting process provides for comprehensive review of potential investments from all key disciplines. - Investments - Credit - Risk Management - Legal - Capital Markets - - Multi-tiered approval process. - $0 - $30 Million: Management Investment Committee - $30- $50 Million: Board Investment Committee - Over $50 Million: Full Board of Directors 14 <Page> [GRAPHIC] OUR FRANCHISE [iSTAR FINANCIAL 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. [CHART] 2002 ORIGINATION SOURCES <Table> Existing Customers 31% Other Third Parties 35% Direct - Other Lenders 9% Direct - Customers 25% </Table> 15 <Page> [GRAPHIC] ASSET QUALITY AND DIVERSIFICATION [iSTAR FINANCIAL LOGO] Asset base broadly diversified by year of origination, asset type, obligor, geography and property type. Loan and CTL Assets at December 31, 2002 ($5.6 billion) [CHART] Financing Structure <Table> First Mortgages 37% Second Mortgages 5% Corporate / Partnership Loans / Other Assets 13% Corporate Tenant Lease 45% </Table> [CHART] Geographic Region <Table> North Central 4% Central 8% South 12% Southwest 2% West 29% Various 1% Northwest 4% Southeast 11% Mid-Atlantic 11% Northeast 18% </Table> [CHART] Collateral Type <Table> Apartment / Residential 5% Conference Ctr. / Entertainment 7% Retail 4% Other 1% Hotel - Lending 12% Hotel - Investment Grade CTL 5% Mixed Use / Mixed Collateral 4% Office - Lending 20% Office - CTL 27% Industrial / R&D 15% </Table> 16 <Page> [GRAPHIC] COMPREHENSIVE RISK MANAGEMENT [iSTAR FINANCIAL LOGO] iSTAR FINANCIAL HAS ONE OF THE LOWEST LOSS RATIOS IN THE FINANCE INDUSTRY. - - 50+ person risk management team with in-house expertise in asset management, corporate credit, loan servicing, project management and engineering. - - Proactive strategy centered around information sharing, frequent customer contact and "early warning" system. - - Compilation and analysis of asset information is distributed on-line to all iStar Financial professionals on a continuous, real-time basis. - - 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. [CHART] WEIGHTED AVERAGE STRUCTURED FINANCE RISK RATINGS (1=LOWEST RISK; 5=HIGHEST RISK) <Table> <Caption> 12/31/98 3/31/99 6/30/99 9/30/99 12/31/99 3/31/00 6/30/00 9/30/00 12/31/00 2.71 2.64 2.62 2.63 2.54 2.55 2.55 2.59 2.50 <Caption> 3/31/01 6/30/01 9/30/01 12/31/01 3/31/02 6/30/02 9/30/02 12/31/02 2.53 2.68 2.82 2.75 2.77 2.74 2.81 2.75 </Table> 17 <Page> [GRAPHIC] MINIMAL NON-ACCRUAL LOANS [iSTAR FINANCIAL LOGO] [CHART] <Table> 1998 Q1 - Q2 - Q3 - Q4 - 1999 Q1 - Q2 - Q3 - Q4 - 2000 Q1 0.1% Q2 0.9% Q3 0.9% Q4 0.1% 2001 Q1 0.1% Q2 0.2% Q3 0.2% Q4 0.1% 2002 Q1 0.1% Q2 0.1% Q3 0.1% Q4 0.2% </Table> 18 <Page> [GRAPHIC] LEASE EXPIRATION PROFILE [iSTAR FINANCIAL LOGO] At December 31, 2002, the weighted average remaining lease term of iStar Financial's corporate tenant leasing portfolio was 9.4 years and the portfolio was 96% leased. [CHART] Lease Expiration Profile (at December 31, 2002) <Table> 2003 2.1% 2004 3.7% 2005 3.0% 2006 5.4% 2007 3.8% 2008 2.1% 2009 and thereafter 29.3% </Table> 19 <Page> [GRAPHIC] DEEP, BROAD CAPITAL RESOURCES [iSTAR FINANCIAL LOGO] SECURED CREDIT FACILITIES - - State-of-the-art, committed revolvers from RBS, Deutsche Bank, Lehman Brothers and Goldman Sachs. - - $2.4 billion (capacity) in place. - - $1.3 billion outstanding. - - Primary source of working capital. UNSECURED CREDIT FACILITIES - - Leading commercial banks, including Bank of America, CIBC, Deutsche Bank, Fleet and UBS. - - $300 million (capacity). - - $0 outstanding. MATCH FUNDING FACILITIES - - iStar Asset Receivables (STARs(SM)). - Recent upgrades strengthen funding capabilities and lower costs. - - Term lending relationships with a dozen commercial banks and insurance companies. UNSECURED CORPORATE BONDS - - Ba1 (+) / BB+ (+) / BBB- senior unsecured credit ratings. - Positive credit momentum should lead to additional investment grade ratings within 12 months. - - $625 million outstanding. - ---------- As of December 31, 2002. 20 <Page> [GRAPHIC] CONSERVATIVE FINANCIAL POLICIES [iSTAR FINANCIAL LOGO] - - 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. - No losses to creditors in a high severity stress test. - 15 - 20% sustainable ROE target. - - Maintain large equity base. - $2.0 billion tangible book equity. - - Maintain diversified sources of investment capital. - - Match-funding discipline: maturities and interest rates. - 100 basis point change in short term rates has minimal impact on adjusted earnings. - - Comprehensive reserve policies. - Loans: Loss reserves and asset-specific cash reserves total $192 million (622 basis points of book assets) at December 31, 2002. - CTLs: Cash deposits, letters of credit, allowances for doubtful accounts and accumulated depreciation total $225 million (906 basis points of book assets) at December 31, 2002. 21 <Page> [GRAPHIC] RECENT FINANCIAL HIGHLIGHTS [iSTAR FINANCIAL LOGO] - - Announced fourth quarter 2002 adjusted earnings of $74.3 million on a diluted basis, compared to $65.0 million for fourth quarter 2001. - - Adjusted earnings for the year ended December 31, 2002 were $281.7 million(1), compared to $255.1 million for 2001. - - During the fourth quarter, the Company closed 15 new financing commitments for a total of $469.1 million. - - In 2002, the Company reached record levels for gross originations and net asset growth of $1.8 billion and $1.2 billion, respectively. - - Company now has a total market capitalization of $6.6 billion. - - On November 14, 2002, the Company issued 8.0 million shares of common stock, raising $202.9 million in net proceeds. The proceeds were used to repay secured indebtedness. - - Subsequent to year end, the Company extended the final maturity of one of its $700 million secured credit facilities to January 2007 from January 2005. - ---------- (1) Excludes $15.0 million non-cash charge related to performance-based vesting of restricted shares granted under the Company's long-term incentive plan. 22 <Page> [GRAPHIC] RELIABLE CASH FLOW PERFORMANCE [iSTAR FINANCIAL LOGO] [CHART] EBITDA(1) ($ IN MILLIONS) <Table> 1998(2) $ 148.6 1999 $ 234.9 2000 $ 423.4 2001 $ 436.2 2002(3) $ 471.4 </Table> - ---------- (1) EBITDA is calculated as total revenue plus equity in earnings from joint ventures and unconsolidated subsidiaries minus the sum of general and administrative expenses, general and administrative - stock-based compensation expense, provision for loan losses, operating costs - corporate tenant lease assets and, prior to November 4, 1999, advisory fees. EBITDA 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 EBITDA indicative of funds available to fund our cash needs or available for distributions to shareholders. (2) Annualized - Company went public March 18, 1998. (3) Excludes $15.0 million non-cash charge related to performance-based vesting of restricted shares granted under the Company's long-term incentive plan. 23 <Page> [GRAPHIC] ATTRACTIVE RETURNS ON INVESTED CAPITAL [iSTAR FINANCIAL LOGO] [CHART] <Table> <Caption> 1998(1) 1999 2000 2001 2002(2) ROAA 6.0% 6.4% 6.7% 7.1% 6.4% ROAE 12.4% 14.7% 15.8% 17.7% 18.4% </Table> - ---------- (1) Annualized - Company went public March 18, 1998. (2) Excludes a $15.0 million non-cash charge related to performance-based vesting of restricted shares granted under the Company's long-term incentive plan. 24 <Page> [GRAPHIC] STRONG CREDIT STATISTICS [iSTAR FINANCIAL LOGO] [CHART] <Table> <Caption> 1998(1) 1999 2000 2001 2002(2) EBITDA/Interest 2.6 2.6 2.4 2.6 2.5 EBITDA/Fixed Charges(3) 2.5 2.0 2.0 2.1 2.1 </Table> - ---------- (1) Because second quarter 1998 was our first full quarter as a public company, the credit statistics for 1998 represent second through fourth quarter 1998 results annualized. (2) Excludes a $15.0 million non-cash charge related to performance-based vesting of restricted shares granted under our long-term incentive plan. (3) Fixed charges is defined as the sum of interest expense and preferred stock dividends. 25 <Page> [GRAPHIC] PRO FORMA CAPITALIZATION [iSTAR FINANCIAL LOGO] <Table> <Caption> AS OF DECEMBER 31, 2002 PRO FORMA FOR OFFERING ---------------------- ($ IN THOUSANDS) LONG-TERM DEBT, INCLUDING CURRENT MATURITIES: UNSECURED SENIOR NOTES, LESS DISCOUNT $ 623,080 UNSECURED REVOLVING CREDIT FACILITIES - SECURED REVOLVING CREDIT FACILITIES 1,275,773 SECURED TERM LOANS, LESS DISCOUNT 682,615 iSTAR ASSET RECEIVABLES SECURED NOTES, LESS DISCOUNT 871,943 OTHER DEBT OBLIGATIONS 15,961 ------------ TOTAL LONG-TERM DEBT $ 3,469,372 SHAREHOLDERS' EQUITY 2,025,300 ------------ TOTAL CAPITALIZATION $ 5,494,672 ============ </Table> 26 <Page> [GRAPHIC] ATTRACTIVE CREDIT STATISTICS [iSTAR FINANCIAL LOGO] <Table> <Caption> DECEMBER 31, 2002 PRO FORMA ----------------- EBITDA / GAAP INTEREST EXPENSE 2.5x EBITDA / FIXED CHARGES 2.1x TOTAL DEBT / TOTAL SHAREHOLDERS' EQUITY 1.7x UNENCUMBERED ASSETS / UNSECURED DEBT 2.11x </Table> 27 <Page> [GRAPHIC] SIGNIFICANT RATINGS UPSIDE POTENTIAL [iSTAR FINANCIAL LOGO] iStar Financial outscores the A-rated finance company peer group on both risk and profitability metrics. <Table> <Caption> iSTAR Peer Group FINANCIAL Median(1) ------------ ----------- SENIOR UNSECURED CREDIT RATING BBB- / BB+(+) BBB+ / A- / / BA1(+) A3 TANGIBLE BOOK EQUITY ($ IN MILLIONS) $ 2,025 $ 854 TOTAL LIABILITIES / TANGIBLE EQUITY 1.8x 7.5x EBIDA / INTEREST 2.5x 1.5x ROAA 6.4%(2) 3.7% G&A / REVENUE 6.4%(2) 18.4% RATING AGENCY RISK-BASED CAPITAL ADEQUACY SCORE 2.09 1.08 </Table> - ---------- (1) Peer Group includes CIT Group, Financial Federal Corp., GATX Financial, Textron Financial and Transamerica Finance Corp. Ba lance sheet data as of latest available quarter. Income statement data as of latest available trailing twelve months. (2) Excludes a $15.0 million non-cash charge related to performance-based vesting of restricted shares granted under our long-term incentive plan. 28 <Page> [GRAPHIC] CORPORATE HIGHLIGHTS [iSTAR FINANCIAL LOGO] - - Largest independent finance company in attractive $100 - $150 billion market niche. - - Consistent, ten-year track record of superior results. - - Non-commodity focus and tax-advantaged structure create attractive returns with significantly lower leverage. - - Large tangible equity capital base and match funding discipline. - - Intensive risk management and employee ownership lead to best loss performance in finance industry. - - Ratings upside potential with non-call life structure. 29 <Page> [GRAPHIC] [iSTAR FINANCIAL LOGO] APPENDIX 30 <Page> [GRAPHIC] CASE STUDY: PORTFOLIO FINANCE [iSTAR FINANCIAL LOGO] San Diego Office Portfolio [PHOTO OF BUILDING] - - Collateral: Cross collateralized portfolio of downtown office buildings totaling 1.1 million sf. - - Equity Sponsor: Southwest Value Partners, a leading private real estate investment firm. - - Investment Structure: 1st and 2nd mortgages. - - Credit Statistics: - LTV: 0%-68%. - DSCR: 2.40x. - - Match Funding Vehicle: STARs(SM). 31 <Page> [GRAPHIC] CASE STUDY: STRUCTURED FINANCE [iSTAR FINANCIAL LOGO] Meridian Corporate Center [PHOTO OF BUILDING] - - Collateral: 1,794,941 sf, 11-building office / mixed use corporate campus on 206 acres located in Charlotte, NC. - - Equity Sponsor: Blackacre Capital Management, the real estate investment arm of Cerberus Capital. - - Investment Structure: 1st mortgage. - - Credit Statistics: - LTV: 0% - 78%. - DSCR: 1.92x. - - Match Funding Vehicle: STARs(SM) (2003). 32 <Page> [GRAPHIC] CASE STUDY: CORPORATE FINANCE [iSTAR FINANCIAL LOGO] 140 Apartment Communities [PHOTO OF BUILDING] - - Collateral: Diversified portfolio of 140 apartment communities located primarily in 10 major U.S. markets. - - Equity Sponsor: Olympus Real Estate, a large institutional private equity firm. - $400 million equity investment junior to iStar - - Investment Structure: Subordinate capital - - Credit Statistics: - LTV: 62% -83%. - DSCR: 1.37x. - - Match Funding Vehicle: Syndicated term loan. 33 <Page> [GRAPHIC] CASE STUDY: CORPORATE TENANT LEASING [iSTAR FINANCIAL LOGO] Northrop Grumman IT Headquarters [PHOTO OF BUILDING] - - Collateral: 574,558 square foot newly-constructed Class A+ office building with structured parking located in McLean, VA. - - Corporate Sponsor: Northrop Grumman Corporation (NYSE: NOC). - - Credit Rating: Baa3 / BBB-. - - Investment Structure: Credit tenant lease guaranteed by Northrop. - - Match Funding Vehicle: STARs(SM) (2003). 34 <Page> [GRAPHIC] ADJUSTED EARNINGS [iSTAR FINANCIAL 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, ---------------------------------------------------------------- 2002 2001 2000 1999 1998(1) --------- --------- --------- --------- --------- (IN THOUSANDS) Net income $ 230,220(3) $ 229,912 $ 217,586 $ 38,886 $ 85,033 Add: Joint venture income 991 965 937 1,603 0 Add: Depreciation 48,041 35,642 34,514 11,016 5,496 Add: Joint venture depreciation and amortization 4,433 4,044 3,662 365 0 Add: Amortization of deferred financing costs 23,460 20,720 13,140 6,121 4,317 Less: Preferred dividends (36,908) (36,908) (36,908) (23,843) (1,259) Less: Gain from discontinued operations (717) (1,145) (2,948) 0 0 Add: Extraordinary loss early extinguishment of debt 12,166 1,620 705 0 0 Add: Cumulative effect of change in accounting principle 0 282 0 0 0 Less: Net income allocable to class B shares 0 0 0 (826) 0 Add: Cost incurred in acquiring former external advisor(2) 0 0 0 94,476 0 --------- --------- --------- --------- --------- Adjusted diluted earnings allocable to common shareholders $ 281,686(3) $ 255,132 $ 230,688 $ 127,798 $ 93,588 ========= ========= ========= ========= ========= </Table> - ---------- (1) Because second quarter was our first full quarter as a public company, the results for 1998 represent second through fourth quarter annualized. (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. (3) Excludes a $15.0 million non-cash charge related to performance-based vesting of restricted shares granted under the Company's long-term incentive plan. 35