1095651--2/27/2009--ISTAR_FINANCIAL

related topics

{loan, real, estate}

{investment, property, distribution}

{tax, income, asset}

{loss, insurance, financial}

{capital, credit, financial}

{debt, indebtedness, cash}

{condition, economic, financial}

{provision, law, control}

{stock, price, operating}

{regulation, change, law}

{system, service, information}

{personnel, key, retain}

{acquisition, growth, future}

{stock, price, share}

Risks Related to Our Business Changes in general economic conditions have and may continue to adversely affect our business. Limitations on our liquidity and ability to raise capital may adversely affect us. We have suffered adverse consequences as a result of our credit ratings being downgraded. Covenants in our indebtedness could limit our flexibility and adversely affect our financial condition. Changes in market conditions could adversely affect the market price of our common stock. Our reserves for loan losses may prove inadequate, which could have a material adverse effect on our financial results. We are required to make a number of judgments in applying accounting policies and different estimates and assumptions could result in changes to our financial condition and results of operations. Quarterly results may fluctuate and may not be indicative of future quarterly performance. We may suffer a loss if a borrower defaults on a loan and the underlying collateral is not sufficient. We are subject to additional risks associated with loan participations. We are subject to additional risks associated with construction lending. We may experience losses if the creditworthiness of our corporate tenants deteriorates and they are unable to meet their lease obligations. Lease expirations, lease defaults and lease terminations may adversely affect our revenue. We are subject to risks relating to our asset concentration. We compete with a variety of financing and leasing sources for our customers. We are subject to certain risks associated with investing in real estate, including potential liabilities under environmental laws and risks of loss from earthquakes and terrorism. Declines in the market values of our investments may adversely affect periodic reported results. We utilize interest rate hedging arrangements which may adversely affect our borrowing cost and expose us to other risks. Our ability to retain and attract key personnel is critical to our success. We are highly dependent on information systems, and systems failures could significantly disrupt our business. Our growth is dependent on leverage, which may create other risks. We may change certain of our policies without stockholder approval. Certain provisions in our charter may inhibit a change in control. We would be subject to adverse consequences if we fail to qualify as a REIT. To qualify as a REIT, we may be forced to borrow funds, sell assets or take other actions during unfavorable market conditions. Certain of our activities are subject to taxes and could result in taxes allocated to our Shareholders. Our Investment Company Act exemption limits our investment discretion and loss of the exemption would adversely affect us.

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1095651--2/27/2009--ISTAR_FINANCIAL_INC