Our record 2005 origination volumes and impressive momentum into 2006 demonstrates our ability to grow our franchise despite the competitive factors in the high-end commercial real estate markets. We made significant progress in strengthening our balance sheet and lowering our overall cost of funds, allowing us to expand our market-leading offerings.

Our “private banker” strategy and unparalleled experience have helped us structure over $21 billion of financing commitments in our 13-year history, over $11 billion from repeat customers who valued the iStar experience.

In 2005, 60% of the deals we closed were deals that were directly sourced (via iStar investment professionals), and 40% were deals brought to us by third parties including high-end commercial real estate brokers.

Last year, relationships also formed the foundation for a significant strategic investment that puts us in a position to capture more of the opportunities created when the commercial real estate and corporate credit worlds intersect. In 2005, we acquired a significant minority interest in Oak Hill Advisors, one of the premier corporate credit organizations in the world. Oak Hill Advisors has invested over $55 billion in 400+ corporate credits and currently manages approximately $7.5 billion of corporate credit for large institutions and high-net-worth families worldwide. With 20 corporate credit specialists covering a wide range of industries, Oak Hill Advisors is helping us to further build our superior information platform, increase deal flow and strengthen our entry into the European markets.

We see opportunities to take the iStar approach to new market sectors where iStar's model can differentiate us in a very competitive marketplace.

In 2005, we entered the European commercial real estate markets with the establishment of our subsidiary, iStar Europe, with an office located in London. We also further enhanced our entry into the automotive retail sector via our AutoStar platform with the acquisition of Falcon Financial. The auto dealer industry is a $50 billion market consisting of 22,000 auto dealers nationwide. We saw no dominant provider of one-stop, customized capital solution to this high-end market. We also recognized that - with 50 percent of dealer revenues coming from maintenance and repair - margins are consistent through many business and economic cycles resulting in stable cash flows. Our AutoStar business is on track to meet its goal of becoming a $1 billion business in 2007.

We are committed to a strong and growing dividend as a hallmark of our company's value. Including the dividend increase we announced in February 2006, we've grown our dividend by 5% annually for the last four years. Since becoming a public company in 1998, we've increased our quarterly dividend by 120% and paid approximately $2.0 billion in common share dividends, or $21.05 per common share.

Many in our growing group of retail shareholders, and our own management team, make iStar stock a cornerstone of their net worth and count on that dividend every quarter. We have been able to grow our dividend consistently because historically our free cash flow has closely paralleled reported adjusted earnings, giving us significant coverage of the dividend from free cash flow.

The strategy we began to put in place in 2005 builds on our experience and expertise - identifying new opportunities while not diverging from our core strengths and competencies.

In recent months we achieved a number of significant milestones that helped us compete during a challenging year and positioned us well for the long-term. We strengthened and further established dominant information platforms, fostered stronger customer relationships and firmly transitioned our business to an unsecured funding model.

Completed five successful unsecured
   bond offerings

Upsized our unsecured credit facility
   to $2.2 billion

Eliminated three secured lines of credit

Repaid our STARs asset-backed notes

All of these actions are consistent with our long-term goals and representative of our position as a premier investment grade finance company. The evolution of our business model, which we completed during the year, put us firmly on track for what we believe will be continued solid performance over the next four years.