Ladies and gentlemen, thank you for standing by, and welcome to iStar Financial’s First Quarter 2013 Earnings Conference Call. (Operator Instructions) As a reminder, today’s conference is being recorded. At this time for opening remarks and introductions, I would like to turn the conference over to Mr. Jason Fooks, Vice President of Investor Relations and Marketing. Please go ahead.

Thank you, John. Good morning everyone. Thank you for joining us today to review iStar Financial’s first quarter 2013 earnings report. With me today are Jay Sugarman, Chairman and Chief Executive Officer; and David DiStaso, our Chief Financial Officer. This morning’s call is being webcast on our website at istarfinancial.com in the Investor Relations section. There will be a replay of the call beginning at 12:30 PM Eastern Time today. The dial-in for the replay is 1800-475-6701 with a confirmation code of 290986. Before I turn the call over to Jay, I’d like to remind everyone that statements in this earnings call which are not historical facts will be forward-looking. iStar’s actual results may differ materially from these forward-looking statements and the risk factors that could cause these differences are detailed in our SEC reports. In addition, as stated more fully in our SEC reports, iStar disclaims any intent or obligation to update these forward-looking statements except as expressly required by law. Now, I’d like to turn the call over to iStar’s Chairman and CEO, Jay Sugarman. Jay?

Thanks Jason. Thanks to all of you for joining us this morning. We started this year with a clear game plan, work to get our NPL balances down, increase the yield on our operating portfolio, and kick and gear our new investment activity. Our first quarter was a good start in achieving those goals. We made progress on a good chunk of NPLs, got a little momentum going in some of our operating assets, and began getting a pipeline of new investments under letter of intent. We still have plenty of work to do, but we are pleased to see some of our efforts beginning to show results. Let me go through a quick review of the business lines. Our real estate finance book saw continued payoffs and a nice reduction in NPL balances. We are under LOI or letter of intent or in process of working on several sizable new investments and hope that some of those close by the end of the second quarter or very early in the third quarter. Segment profit was $2.4 million and we will need to make more progress on NPLs to get that number up. The net lease book has remained relatively stable and remains a solid performer. We are beginning to target new investments in this area. We may choose to access third-party capital to help ramp this business up. Built-to-suit opportunities as well as situations or expansion of existing assets is possible seemed to offer the best returns right now. And our net lease team is engaged on a number of interesting situations. Segment profit was $8.6 million and we look to grow that through new investments throughout the year. The operating portfolio continues to benefit from very strong performance from the condominium assets to where our assets over the…

Thanks Jay and good morning everyone. Let me begin by discussing our financial results for the first quarter 2013 as well as recent capital markets activities before moving on to discuss our real estate and loan portfolios. For the quarter our net loss was $41 million or a loss of $0.49 per diluted common share compared to a net loss of $55 million or $0.66 per diluted common share for the same quarter last year. Our adjusted income for the quarter was a loss of $300,000 compared to a loss of $2.8 million for the first quarter of 2012. Results in the current quarter included $5 million of loss on early extinguishment of debt and $4 million of other expenses associated with the re-pricing of our $1.71 billion secured credit facility. Excluding these charges, our net loss for the quarter would have been $33 million and our adjusted income would have been $3 million. Contributing to the year-over-year improvement was increased income from residential condominium sales, increased lease income as we continue to lease up our operating properties and a reduction in interest expense and provision for loan loses. This was partially offset by decreasing interest income from an overall small real estate finance portfolio as well as lower earnings from equity method investments. During the first quarter we issued $200 million of our 4.5% Series J Cumulative Convertible Preferred Stock. This stock has an initial conversion price of approximately $12.79 a share. We intend the use net proceeds from this offering to fund new investment originations. As we previously announced this quarter we have re-priced the $1.71 billion outstanding balance on our senior secured credit facility. The term loan now bears interest in an annual rate of LIBOR plus 3.50% with 1% LIBOR floor, a reduction from the prior…

Thanks Dave. We look forward to coming back next quarter with details on the new investment pipeline and further progress on our overall business strategy. But for now let’s go ahead and open it up for questions. Operator?

Thank you. (Operator Instructions) Our first question is from the line of Michael Kim with CRT Capital Group. Please go ahead.

Thanks. Good morning everyone. My question is under the stabilized operating portfolio, commercial operating portfolio, the weighted average effective yield at 9.8% was higher than our expectations and up from the prior quarter and I am just curious what drove the yield increase was it largely the $40 million of additional stabilized assets added during or any sort of one-time items that might affect kind of that yield profile, I guess how should we think about the effective yield going forward is the first quarter a good figure to use?

Hey Michael, yeah I think it’s a strong number maybe a little stronger than we expected as well, it was impacted by some new assets with good stabilized deals but also little bit of progress on leasing and some other assets and a seasonality in a particular hotel assets in (indiscernible). So, it’s probably much higher than we project going forward, but certainly the trend look good. Michael Kim – CRT Capital Group: Yeah. Absolutely, okay, that’s helpful. And in your comments about new investments it sounds like you got some letters of intent, could see some use in the second or third quarter. I guess what does the loan origination pipeline look like right now? I mean what sort of deals are you looking at specifically just looking for color on the size of these transactions and maybe your buy size if you are going to slowdown that portion of the loan or types of collateral general terms, duration or even yield profile?

Lot in there but let me I give you general sense of what we’re looking at. Again as I mentioned on last call I think we think size is important to kind of move away from the pack. Certainly what we see in the conduit world and the life company in commercial banking world is a very competitive environment. We are trying to use our strength working with borrowers who need some flexibility and you have a little bit more fluid situation where they are not sure exactly what they need, but they no need partner who can do senior debt, junior debt anything up and down the capital stock. We are seeing some opportunities in larger deals where we can be sort of a one stop shop for whatever capital needs pop up. That’s something we’re pursuing in the multi-family sector, hospitality mixed use and office world. We are seeing little bit on the net lease side pretty competitive but as I mentioned in my comments of things that have both a strong income stream but also the potential for future development is a place that we think we have some fairly unique skills. So, we are trying to tie some deals down in that sector, but as I said, it takes a little bit of time to get that pipeline set up. As Dave said, we have got about 700 plus of cash. So, we need to get going. And we have got some good progress on the number of fronts, but got to get some things locked and loaded and closed before where we can really tell you where the best opportunities are?

Got you, understood. And lastly just a question on the NPL resolution, it’s great to see that 30% decline, one, you think you can exceed the guidance provided just calling for a 40% reduction and you have more visibility on other resolution for the rest of the year? And also during the first quarter, what was the split between pay-downs versus transfers to performing status assuming that there were no assets that were they can be entitled to?

Okay. So, just in terms of the first quarter, we had about 40% of that reduction was from pay down.

Okay.

The other 60% was mostly comprised of asset, where we got a material pay down and reached resolution on the remainder. We did buyout a couple positions to get ourselves into ownership. We think that was a pretty smart trade. And we have had a couple of borrowers do successful asset sales and reduce their balances to a point where they can go back to performing. We had a mix of things that broke our way. That’s probably the same dynamic we’ll see going forward. It’s hard to predict when these things can’t get done, there are many of them have been in NPL for a long time, but we are making progress, and we do think there are other situations that could possibly get resolved, and if so we could very well beat that target.

Right.

But we are not going to go out on a limb just yet, Mike and...

Sure, yeah. I mean, the pay downs that occur during the first quarter, were those anticipated and did you have visibility that they were going to get pay down or is that kind of unexpected?

The specific timing was not easily pegged. We have been working on those for several years, so…

Right.

Yes, we do think things are getting to the end of the line in many cases. And so it’s just a matter which quarter they happen and which is why we comfortable saying last quarter we felt sizable reduction was in the works, but the fact that we got a number of these down in the first quarter was just good news.

Okay, excellent nice quarter. Thank you.

Thanks Mike.

(Operator Instructions) Our next question is from the line of Joshua Barber with Stifel. Please go ahead.

Hi, good morning. I am wondering if you could talk about your available cash position today, especially in reference to some of your comments about sizable deals. What sort of cash balance are you comfortable running with for the rest of the year and do you think there is possibility to leverage some of your investing cash to sort of multiply the amount of liquidity that you have?

I guess a couple of things Josh. One, as Dave said, we’ve got over $700 million. So, we got plenty of money to pursue pretty much everything we want to right now. We don’t feel constrained. We can lookout and see number of repayments coming in throughout the rest of the year that provide more capital. So, I think the game right now is just to get embedded in a couple high-quality, high-profile, high return deals and see where we go from there. We don’t feel right now limited in anyways. So, we are pursuing those, the deals we think are attractive. Further down the road thinking about the capital structure, as Dave said, we are looking to refinance the rest of this year’s maturities and we have a small maturity coming up in the first quarter of ‘14 and then it’s pretty much a free runway for a couple of years. So, we are going to take a hard look once we get through this capital markets execution cycle and decide where leverage should be for this company long-term. But we continue to believe kind of the 2.5 times – 2 to 2.5 times is where we are going to end up and we work to corporately make sure that kind of the range we stay in.

Great. When you look at your net lease portfolio, I am just curious and more of a maintenance question, but it looks like the unlevered yields actually fell this quarter even though occupancy was mostly flat. Can you talk about what happened there, it looks like rents fell off while OpEx went up a bit also can you help us with what’s going on there?

Let’s make sure we’re using same terminology. We are showing this quarter and going forward the yields on the gross carrying value. I think historically we’ve also shown the yields on the net. But as you think about that business and certainly as we own more and more assets we’re going to gravitate towards showing yields on gross carrying value before depreciation and it’s a better metric for you, I expect you to follow. So one, let’s just make sure we are using that terminology.

Okay, but it still did look like no, I did fall a bit this quarter, is there going on there?

Let me take a look here, we’ll have to come back to you on that there is nothing specific in the books that I complain to. There may have been one or two assets that rolled into a different lease status, but let us come back to you on that Josh.

Okay, great and one last question Jay. When you mentioned the potential use of third party capital was that specific for general forward investment or was that also potentially for part of your land bank?

It can be in any form but really the specifically comment was directed towards the net lease book.

Great, thanks very much.

Your next question is from Jonathan Feldman with Nomura Securities. Please go ahead.

Good morning. Question was what do you guys see as the opportunity to further optimize your cost of debt capital going forward or do you think you have reached the limit there?

I hope, we have reached the limit. We think as we demonstrate to the market both the right side and the left side of the balance sheet getting stronger and that there is room certainly to refashion some of the pricing on the right side of the balance sheet. I think the market and certainly rating agencies are giving us indications that as we move to a stronger position on the assets side in terms of earnings that there might be some room to move those ratings up and that would certainly save us some cost on the interest side of the new debt. I think the secured piece of the portfolio continues to pay down, we continue to look at those assets and with the optimal way to have them finance. We think the re-pricing got us to a closer place but we are constantly looking at the Jonathan and we have some flexibility now to fine tune that nothing dramatic. But we certainly think there is a little more room to go.

Great and then just on final question, that is you commented briefly on the capital available on the balance sheet but I just wanted to follow up by asking how you felt about or if there are any sort of near and medium term plans to raise any equity capital or do you feel like you have the ability to recycle investments to provide you with the liquidity that you would like to make those new investments?

I think we feel really good right now where we are in terms of liquidity and future liquidity needs. So, I think right now we are good where we are. And the next thing in the capital markets will be refinancing of the upcoming maturities. Once we get all the capital invested in all that capital market activity done certainly we would think about growth capital with the opportunities that are there.

(Operator Instructions) And I’ll go to (indiscernible) with Goldman Sachs. Please go ahead.

Thank you very much. Congratulations on the quarter, just some housekeeping items, so you already mentioned Jay in your prepared remarks that you might access third party capital for that net lease portfolio. Is that third-party capital for investors that you would like to investor a long side risk or is that third party capital where you may potential upsize the amount that you might look to do in the unsecured debt market maybe above that 545, do you have room in your covenants to do that?

Yeah, now was former we have had a lot of interest in that sector and we think there is ways to not only expand or pool of capital available, but also bring in the types of investors who maybe interested another parts of our business. So, it’s a good relationship opportunity if it’s there, but there is nothing certain and so I don’t want to go too far here, but that’s one sector that we think there is capital that would like our expertise.

Great. Okay, great. And then regarding the cash on hand of over $700 million is any of that restricted or is that all available for use in terms of new investments and general corporate purposes?

Yeah, (indiscernible) the majority of that cash is available and not restricted. We have very small balance of restricted cash for deposits. So, the majority of that 700 plus is available for all corporate uses.

Great and then just one last question, the room in your covenants the headroom, do you have ability to upsize any potential capital markets transaction above the $545 million that matures in 2013 or are you really looking to just replace that debt for debt?

Yeah, right now based on our covenants, we are looking to replace the debt and raise the $545 million extend the maturities to that and improve the rate structure.

Great, okay, perfect. Thank you.

And Mr. Fooks, we have no further questions.

Thanks, John and thanks to everyone for joining us this morning. If you should have any additional questions on today’s earnings release, please feel free to contact me directly. John, would you please give the conference call replay instructions once again. Thank you.