Comprehensive Risk Management

"Our goal as a company is to ensure that the overall credit quality of our portfolio remains strong. That is why iStar continues to have some of the strongest credit statistics and one of the lowest loss ratios in the finance industry. Our consistently strong record is a measure of the quality of our customer base which we believe translates directly into superior results for our portfolio."

Tim O'Connor
Chief Operating Officer

iStar’s culture is highly focused on asset risk management, resulting in one of the lowest loss ratios in the finance industry. The risk management team is comprised of over 70 professionals with in-house experience in asset management, corporate credit, loan servicing, project management and engineering.

The risk management team includes a rated loan servicer, iStar Asset Services, which provides iStar’s customers with responsive post-closing support. iStar employs a pro-active risk management strategy centered on information sharing and frequent customer contact, creating an “early warning” system within the company. The compilation and analysis of all asset information is distributed on-line to all iStar professionals on a continuous, real-time basis.

In addition, iStar also undertakes a comprehensive quarterly risk rating process that enables the Company to evaluate, monitor and pro-actively manage asset-specific credit issues and identify credit trends on a portfolio-wide basis. As part of the risk rating processes iStar conducts a detailed credit review of each asset on a quarterly basis. As shown in the graph below, credit quality has remained strong throughout various economic and market conditions.

At September 30 2006, the Company's non-performing loan assets (NPLs) represented 0.18% of total assets. NPLs represent loans on non-accrual status and repossessed real estate collateral. At September 30 2006, the Company had two loans on non-accrual and no repossessed assets. In addition, watch list assets represented 1.09% of total assets at September 30 2006.