UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  April 25, 2006

iStar Financial Inc.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code:  (212) 930-9400

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02             Results of Operations and Financial Condition.

The information in this Current Report, including the exhibit hereto, is being furnished and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, unless it is specifically incorporated by reference therein.

On April 25, 2006, iStar Financial Inc. issued an earnings release announcing its financial results for the quarter ended March 31, 2006. A copy of the earnings release is attached as Exhibit 99.1.

ITEM 9.01             Financial Statements and Exhibits.

Exhibit 99.1            Earnings Release.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

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EXHIBIT INDEX

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Exhibit 99.1

iStar Financial Announces First Quarter 2006 Results

•                       First quarter new financing commitments total $663 million in 16 separate transactions.

•                       Adjusted earnings per diluted common share were $0.90 for the first quarter 2006, up 22% year-over-year.

•                       Total revenues reach a record $224.6 million for the first quarter 2006.

•                       Company reaffirms full year 2006 adjusted earnings per diluted common share guidance of $3.35 - $3.50.

NEW YORK – April 25, 2006 – iStar Financial Inc. (NYSE: SFI), the leading publicly traded finance company focused on the commercial real estate industry, today reported first  quarter 2006 results.

iStar Financial reported adjusted earnings for the quarter ended March 31, 2006 of $0.90 per diluted common share versus $0.74 per diluted common share for the first quarter 2005. Adjusted earnings allocable to common shareholders for the first quarter 2006 were $102.6 million on a diluted basis, compared to $83.5 million for the first quarter 2005. Adjusted earnings represents net income computed in accordance with GAAP, adjusted for preferred dividends, depreciation, depletion, amortization and gain (loss) from discontinued operations.

Net income allocable to common shareholders for the first quarter was $75.6 million, or $0.66 per diluted common share, compared with $58.3 million, or $0.52 per diluted common share, for the first quarter 2005.

Net investment income for the quarter was $111.2 million, compared to $93.0 million for the first quarter of 2005, primarily due to year-over-year growth of the Company’s balance sheet. Net investment income represents interest income, operating lease income and equity in earnings from joint ventures, less interest expense, operating costs for corporate tenant lease assets and loss on early extinguishment of debt, in each case as computed in accordance with GAAP.

The Company announced that during the first quarter, it closed 16 new financing commitments, for a total of $663 million, of which $611 million was funded during the quarter. In addition, the Company funded $206 million under pre-existing commitments and received $474 million in principal repayments. Two transactions this quarter were sourced by the Company’s recently established iStar Europe subsidiary. Cumulative repeat customer business totaled $9.2 billion at March 31, 2006.

For the quarter ended March 31, 2006, the Company generated return on average common book equity of 21.1%. The Company’s debt to book equity plus accumulated depreciation/depletion and loan loss reserves, as determined in accordance with GAAP, was 2.1x for the first quarter.

Capital Markets Summary

As previously announced, the Company issued $500 million of 5.65% senior unsecured notes due 2011 and $500 million of 5.875% senior unsecured notes due 2016 during the first quarter 2006. In addition, the Company extended the final maturity date on its secured credit facility by two years to January 2008 and reduced its maximum principal amount to $500 million from $700 million. Also during the first quarter 2006, Fitch Ratings upgraded the Company’s senior unsecured debt rating to ‘BBB’ from ‘BBB-’ and its preferred stock rating to ‘BB+’ from ‘BB’. In addition, Moody’s Investors Service upgraded the Company’s senior unsecured ratings to ‘Baa2’ from ‘Baa3’ and its preferred stock rating to ‘Ba1’ from ‘Ba2’ and Standard and Poor’s Ratings upgraded the Company’s long-term unsecured senior debt rating to ‘BBB’ from ‘BBB-’ and its preferred stock rating to ‘BB+’ from ‘BB’.

As of March 31, 2006, the Company had $538 million outstanding under $2.0 billion in credit facilities. Consistent with its match funding policy under which a one percentage point change in interest rates cannot impact adjusted earnings by more than 2.5%, as of March 31, 2006, a 100 basis point increase in rates would have increased the Company’s adjusted earnings by 1.20%.

Earnings Guidance

Consistent with the Securities and Exchange Commission’s Regulation FD and Regulation G, iStar Financial comments on earnings expectations within the context of its regular earnings press releases. The Company continues to expect diluted adjusted earnings per share for the fiscal year 2006 of $3.35-$3.50, and diluted GAAP earnings per share for the fiscal year 2006 of $2.35-$2.50, based on expected net asset growth of approximately $1.5 billion. The Company expects to fund its net asset growth with a combination of unsecured notes and equity.

-more-

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Risk Management

At March 31, 2006, first mortgages, participations in first mortgages, senior loans and corporate tenant lease financing collectively comprised 87.9% of the Company’s asset base versus 86.1% in the prior quarter. The Company’s loan portfolio consisted of 58% floating rate and 42% fixed rate loans, with a weighted average maturity of 4.0 years. The weighted average first and last dollar loan-to-value ratio for all structured finance assets was 13.9% and 63.0%, respectively. At quarter end, the Company’s corporate tenant lease assets were 95.7% leased with a weighted average remaining lease term of 11.0 years.

As of March 31, 2006, the Company’s weighted average GAAP yield on its structured finance assets and corporate tenant lease assets was 10.36% and 9.75%, respectively. The company’s net finance margin, calculated as the rate of return on assets less the cost of debt, improved to 3.59% from 3.26% in the prior quarter.

At March 31, 2006, the weighted average risk ratings of the Company’s structured finance and corporate tenant lease assets were 2.71 and 2.42, respectively.

At quarter end, accumulated loan loss reserves and other asset-specific credit protection represented an aggregate of approximately 5.8% of the gross book value of the Company’s loans. In addition, cash deposits, letters of credit, allowances for doubtful accounts and accumulated depreciation relating to corporate tenant lease assets represented 11.9% of the gross book value of the Company’s corporate tenant lease assets at quarter end.

At March 31, 2006, the Company’s non-performing loan assets (NPLs) represented 0.35% of total assets. NPLs represent loans on non-accrual status and repossessed real estate collateral. At March 31, 2006, the Company had two loans on non-accrual and no repossessed assets. In addition, one asset was removed and one asset was added to the watch list this quarter, with watch list assets representing 0.71% of total assets at March 31, 2006.

Other Developments

Earlier this quarter, the Company’s subsidiary, TimberStar, led the acquisition of approximately 900,000 acres of forestland and related assets in Arkansas, Louisiana and Texas from International Paper Co. for approximately $1.17 billion.  Through TimberStar, the Company has committed to provide approximately $468 million of capital to a venture to fund the purchase.  Due to significant interest from a number of equity sponsors, the Company has elected to syndicate part of its capital commitment, which, will ultimately reduce the Company’s investment in the venture to approximately $150 - $175 million. The acquisition is expected to close during the third quarter 2006.

TimberStar seeks to acquire a geographically diverse portfolio of timberlands that generate attractive cash-on-cash yields and capital appreciation. It is focused on creating partnerships with high-quality customers through long-term supply agreements. Prior to the pending purchase of the assets from International Paper, the Company’s TimberStar subsidiary had invested approximately $150 million in its timber portfolio.

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Dividend and Annual Meeting

On April 3, 2006, iStar Financial declared a regular quarterly dividend of $0.77. The first quarter dividend will be payable on April 28, 2006 to shareholders of record on April 14, 2006.

The Company will host its Annual Meeting of Shareholders at The Harvard Club of New York City, located at 35 West 44th street, New York, New York 10036 on Wednesday, May 31, 2006 at 9:00 am local time. All shareholders are cordially invited to attend.

[Financial Tables to Follow]

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iStar Financial Inc. is the leading publicly traded finance company focused on the commercial real estate industry. The Company primarily provides custom tailored financing to high end private and corporate owners of real estate, including senior and mezzanine real estate debt, senior and mezzanine corporate capital, and corporate net lease financing. The Company, which is taxed as a real estate investment trust (“REIT”), seeks to deliver strong dividends and superior risk-adjusted returns on equity to shareholders by providing innovative and value added financing solutions to its customers.

iStar Financial will hold a quarterly earnings conference call at 10:00 a.m. EDT today, April 25, 2006. This conference call will be broadcast live over the Internet and can be accessed by all interested parties through iStar Financial’s website, www.istarfinancial.com, under the “Investor Relations” section. To listen to the live call, please go to the website’s “Investor Relations” section at least 15 minutes prior to the start of the call to register, download and install any necessary audio software. For those who are not available to listen to the live broadcast, a replay will be available shortly after the call on the iStar Financial website.

(Note: 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 timing of receipt of prepayment penalties, 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.)

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Selected Income Statement Data

(In thousands)

(unaudited)

(1)          HPU holders are Company employees who purchased high performance common stock units under the Company’s High Performance Unit Program.

Selected Balance Sheet Data

(In thousands)

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iStar Financial Inc.

Consolidated Statements of Operations

(In thousands, except per share amounts)

(unaudited)

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iStar Financial Inc.

Reconciliation of Adjusted Earnings to GAAP Net Income

(In thousands, except per share amounts)

(unaudited)

(1)   Adjusted earnings should be examined in conjunction with net income as shown in the Consolidated Statements of Operations. Adjusted earnings should not be considered as an alternative to net income (determinedin accordance with GAAP) as an indicator of the Company’s performance, or to cash flows from operating activities (determined in accordance with GAAP) as a measure of the Company’sliquidity, nor is thismeasure indicative of fundsavailable to fund the Company’s cash needs or available for distribution to shareholders. Rather, adjusted earnings is an additional measure the Company uses to analyze how its business is performing. It should be noted that the Company’s manner of calculating adjusted earnings may differ from the calculations of similarly-titled measures by other companies.

(2)   For the three months ended March 31, 2006 and 2005, excludes $2,569 and $2,124 of net income allocable to HPU holders, respectively.

(3)   For the three months ended March 31, 2006 and 2005, excludes $2,545 and $2,102 of net income allocable to HPU holders, respectively.

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iStar Financial Inc.

Consolidated Balance Sheets

(In thousands)

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iStar Financial Inc.

Supplemental Information

(In thousands)

(unaudited)

PERFORMANCE STATISTICS

(1)   Weighted average GAAP yield is the annualized sum of interest income and operatinglease income, divided by the sum of average gross corporate tenant lease assets, average loans and other lending investments, average SFAS No. 141 purchase intangibles and average assets held for sale over the period. Cost of debt is the annualized sum of interest expense and operatingcosts–corporate tenant lease assets, dividedby the average grossdebt obligations over the period. Operatinglease income andoperatingcosts–corporate tenant lease assets exclude SFAS No. 144 adjustments from discountinuedoperations of $165 and ($8), respectively. The Company does not consider net finance margin to be a measure of the Company’s liquidity or cash flows. It isone of several measuresthat management considersto be an indicator of the profitability of its operations.

(2)   Adjusted earnings should be examined in conjunction with net income as shown in the Consolidated Statements of Operations. Adjusted earnings should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of the Company’s performance, or to cash flows from operating activities (determined in accordance with GAAP) as a measure of the Company’s liquidity, nor is this measure indicative of funds available to fund the Company’s cash needs or available for distribution to shareholders. Rather, adjusted earnings is an additional measure the Company uses to analyze how its business is performing. It should be noted that the Company’s manner of calculating adjusted earnings may differ from the calculations of similarly-titled measures by other companies.

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CREDIT STATISTICS

(1)          EBITDA should be examined in conjunction with net income as shown in the Consolidated Statements of Operations. EBITDA should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of the Company’s performance, or to cash flows from operating activities (determined in accordance with GAAP) as a measure of the Company’s liquidity, nor is this measure indicative of funds available to fund the Company’s cash needs or available for distribution to shareholders. It should be noted that the Company’s manner of calculating EBITDA may differ from the calculations of similarly-titled measures by other companies.

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FINANCING VOLUME SUMMARY STATISTICS (1)

Three Months Ended March 31, 2006

RISK MANAGEMENT STATISTICS

(1)          Excludes other investments.

(2)          Based on average quarterly one-month LIBOR (floating-rate loans) and U.S. Treasury rates (fixed-rate loans and corporate leasing transactions) during the quarter.

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iStar Financial Inc.

Supplemental Information

(In thousands, except per share amounts)

(unaudited)

LOANS AND OTHER LENDING INVESTMENTS CREDIT STATISTICS

RECONCILIATION OF DILUTED ADJUSTED EPS

GUIDANCE TO DILUTED GAAP EPS GUIDANCE (1)

(1)          Adjusted earnings should be examined in conjunction with net income as shown in the Consolidated Statements of Operations. Adjusted earnings should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of the Company’s performance, or to cash flows from operating activities (determined in accordance with GAAP) as a measure of the Company’s liquidity, nor is this measure indicative of funds available to fund the Company’s cash needs or available for distribution to shareholders. Rather, adjusted earnings is an additional measure the Company uses to analyze how its business is performing. It should be noted that the Company’s manner of calculating adjusted earnings may differ from the calculations of similarly-titled measures by other companies.

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iStar Financial Inc.

Supplemental Information

(In millions)

(unaudited)

PORTFOLIO STATISTICS AS OF MARCH 31, 2006 (1)

(1)          Figures presented prior to loan loss reserves, accumulated depreciation and impact of statement of Financial Accounting Standards No. 141 (“SFAS No. 141”) “Business Combinations.”

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