The iStar Evolution
We began our business in 1993 and operated as part of a private company for the next five years. During that time, we raised over $750 million in equity capital from leading institutional and high-net worth investors such as IBM, DuPont and GM pension funds, as well as the Ziff, Pritzker and Burden (Vanderbilt) families. From 1998 through 2000, we completed a number of strategic corporate acquisitions to complement our organic growth and enhance our business franchise. iStar began trading on the New York Stock Exchange on November 4, 1999. The company is taxed as a real estate investment trust (“REIT”), permitting higher returns on equity at a fraction of the leverage of taxable finance companies.
Phase 1: Foundation
From the beginning we set out to capture significant opportunities in the underserved segments of the high-end real estate market. As a private company for our first five years, iStar built a solid foundation. We added marquee clients, many of whom are still our customers today. We analyzed the high-end marketplace and developed our ability to cross over between the real estate markets, capital markets and corporate finance markets. We also began identifying customers who were interested in iStar’s highly personalized, high-integrity approach to the business. Our mission remains the same today as it was at our inception: to be the premier provider of flexible financing solutions to underserved segments of the high-end real estate market while delivering attractive risk-adjusted returns to our valued shareholders. And we have not changed the core values that guide the way we do business, operating with a high degree of integrity, honesty and customer service.
Phase 2: Expansion
iStar expanded into the public markets kicked off phase two, which began in earnest with the $1.5 billion acquisition of TriNet Corporate Realty Trust, then the largest triple net lease company in the public markets. Success led to a natural expansion of our business. We focused on educating the market on iStar’s unique approach to real estate financing, clearly differentiating our model from the more prevalent syndication, securitization and commercial finance models that existed at the time. We made a number of other strategic corporate acquisitions to complement our organic growth and extend our business franchise during this phase. We took a number of important steps that have helped make iStar Financial the leading publicly traded finance company focused on the commercial real estate industry. In 2004, we received “investment grade” ratings from all three major rating agencies, significantly strengthening our cost advantage in the marketplace. Our financial results during this phase were excellent, demonstrating our commitment to our shareholders. For example, we grew our revenues by 168%, increased our total assets by approximately 90% and delivered total cumulative shareholder returns, including dividends, of 308%.
Phase 3: Evolution
In 2005, we carefully analyzed various changes in the market to better position the company. We continue to utilize the same type of forward thinking that served us well in phases one and two, while remaining true to the strengths and market position we have clearly staked out with our customers. We are focused on maintaining strategic relationships and working to deliver the most comprehensive capital solutions to the marketplace. You can read more about iStar`s strategy in Return On Ideas.