iStar Financial to Acquire Falcon Financial Investment Trust for $7.50 Per Share in Cash

iStar Financial to Acquire Falcon Financial Investment Trust for
$7.50 Per Share in Cash 


NEW YORK, Jan. 20  /PRNewswire-FirstCall/ -- iStar Financial Inc. (NYSE: SFI),
the leading publicly traded finance company focused on the commercial real
estate industry, announced today that it has signed a definitive agreement to
acquire Falcon Financial Investment Trust (NASDAQ:FLCN), an independent finance
company dedicated to providing long-term capital to automotive dealers
throughout the United States.

Under the terms of the agreement, iStar Financial will commence a cash tender
offer to acquire all of Falcon Financial's outstanding shares at a price of
$7.50 per share for an aggregate equity purchase price of approximately $120
million.  Following completion of the tender offer, any remaining shares of
Falcon Financial will be acquired in a cash merger at the same price.  The
board of directors of each company has approved the agreement.  The transaction
is subject to customary conditions including the tender of at least the
majority of the outstanding shares of Falcon Financial and is expected to close
in the first half of 2005.

"We continue to seek opportunities in the underserved segments of the real
estate market that can benefit from our flexible capital solutions and
unmatched customer service approach to lending," said Jay Sugarman, chairman
and CEO of iStar Financial. "Having been Falcon Financial's sole source of
warehouse financing for most of the last year, we fully appreciate the
considerable challenges the company has encountered due to its size and
reliance on the less-flexible securitization market for long-term financing. We
believe that under iStar's leadership and our multi-product umbrella of
high-value capital solutions, we will be able to successfully integrate their
portfolio and manage the business for long-term profitability."

The company will further discuss the acquisition of Falcon Financial on its
fourth quarter and year-end 2004 earnings conference call scheduled for
Tuesday, February 15, 2005. The conference call will begin at 10:00 a.m. ET.
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/, in the "investor relations" section. To listen
to the live call, please go to the company's "investor relations" section of
the website at least 15 minutes prior to the start of the call to register and
download any necessary audio software. For those who are not able to listen to
the live broadcast, a replay will be available shortly after the call on the
iStar Financial website.

Notice to Investors:

This announcement does not constitute an offer to purchase nor a solicitation
of an offer to sell any securities.  The tender offer for the outstanding
shares of Falcon Financial common stock described in this announcement has not
commenced.  Any offers to purchase or solicitation of offers to sell will be
made only pursuant to a tender offer statement and a solicitation and
recommendation statement filed with the Securities and Exchange Commission. 
The tender offer statement (including an offer to purchase, a letter of
transmittal and other offer documents) and the solicitation/recommendation
statement will contain important information and should be read carefully
before any decision is made with respect to the tender offer.  Those materials
will be made available to all stockholders of Falcon Financial at no expense to
them.  In addition, all of those materials (and all other offer documents filed
with the SEC) will be available at no charge on the SEC's web site at
http://www.sec.gov/.

Forward Looking Statements:

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 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.)

iStar Financial is the leading publicly traded finance company focused on the
commercial real estate industry. The Company provides custom-tailored financing
to high-end private and corporate owners of real estate nationwide, including
senior and junior mortgage debt, senior and mezzanine corporate capital, and
corporate net lease financing. The Company, which is taxed as a real estate
investment trust, seeks to deliver a strong dividend and superior risk-adjusted
returns on equity to shareholders by providing the highest quality financing
solutions to its customers. Additional information on iStar Financial is
available on the Company's website at http://www.istarfinancial.com/. 

DATASOURCE: iStar Financial Inc.



CONTACT:  Catherine D. Rice, Chief Financial Officer, or Andrew C.

Richardson, Executive Vice President - Capital Markets, or Andrew G. Backman,

Vice President - Investor Relations, [phone], all of iStar Financial

Inc.



Web site:  http://www.istarfinancial.com/ 

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