Other Investments

The Company's other investments and its proportionate share of results from equity method investments were as follows ($ in thousands):



	Carrying Value as of December 31,				Equity in earnings for the years ended December 31,
	2012		2011		2012		2011			2010
LNR	$	205,773	$	159,764	$	60,669	$	53,861		$	1,797
Madison Funds	56,547		103,305		10,246		3,641			9,717
Oak Hill Funds	29,840		56,817		5,844		1,918			11,613
Real estate equity investments	47,619		69,100		21,636		(5,273		)	2,522
Other equity method investments(1)	47,939		56,849		4,614		40,944			26,259
Total equity method investments	$	387,718	$	445,835	$	103,009	$	95,091		$	51,908
Other	11,125		12,000
Total other investments	$	398,843	$	457,835

Explanatory Note:

_______________________________________________________________________________


(1)	For the years ended December 31, 2011 and 2010, amounts include $38.4 million and $22.4 million, respectively, of earnings related to Oak Hill Advisors, L.P. and related entities that were sold in October 2011.

Equity Method Investments

LNR—On July 29, 2010, the Company acquired an ownership interest of approximately 24% in LNR Property Corporation ("LNR"). LNR is a servicer and special servicer of commercial mortgage loans and CMBS and a diversified real estate investment, finance and management company. In the transaction, the Company and a group of investors, including other creditors of LNR, acquired 100% of the common stock of LNR in exchange for cash and the extinguishment of existing senior notes of LNR's parent holding company (the "Holdco Notes"). The Company contributed $100.0 million aggregate principal amount of Holdco Notes and $100.0 million in cash in exchange for an equity interest of $120.0 million. During the year ended December 31, 2010, the Company executed the discounted payoff of a separate $25.0 million principal value loan with LNR for which it received proceeds of $24.5 million in full repayment.

Subsequent to year end, the Company signed a definitive agreement to sell its interest in LNR (see Note 17—Subsequent Events for further details).

The following table represents the latest available financial information of investee level summarized financial information for LNR ($ in thousands)(1):



	For the Years Ended September 30,						For the period July 29 to September 30,
	2012			2011			2010
Income Statements
Total revenue(2)	$	332,902		$	327,032		$	40,022
Income tax expense (benefit)(3)	$	6,731		$	(76,558	)	$	685
Net income attributable to LNR	$	253,039		$	225,190		$	7,495
iStar's ownership percentage	24		%	24		%	24		%
iStar's equity in earnings from LNR	$	60,669		$	53,861		$	1,797



	As of September 30,
	2012			2011
Balance Sheets
Total assets(2)	$	1,384,337		$	1,288,923
Total debt(2)	$	398,912		$	469,631
Total liabilities(2)	$	517,088		$	576,835
Noncontrolling interests	$	1,560		$	39,940
LNR Property LLC equity	$	865,689		$	672,147
iStar's ownership percentage	24		%	24		%
iStar's equity in LNR	$	205,773		$	159,764

Explanatory Notes:

_______________________________________________________________________________

(1)

The Company records its investment in LNR on a one quarter lag, therefore, amounts in the Company's financial statements for the year ended December 31, 2012 and 2011 are based on balances and results from LNR for the years ended September 30, 2012 and 2011. LNR was acquired in July of 2010, therefore results for the year ended December 31, 2010 are based on balances from LNR for the period July 29, 2010 to September 30, 2010.

(2)

LNR consolidates certain commercial mortgage-backed securities and collateralized debt obligation trusts that are considered VIEs (and for which it is the primary beneficiary), that have been excluded from the amounts presented above. As of September 30, 2012 and 2011, the assets of these trusts, which aggregated approximately $97.52 billion and $126.66 billion, respectively, were the sole source of repayment of the related liabilities, which aggregated approximately $97.21 billion and $126.64 billion, respectively, and are non-recourse to LNR and its equity holders, including the Company. In addition, total revenue presented above includes $95.4 million, $119.0 million and $16.8 million for the years ended September 30, 2012, 2011 and for the period July 29, 2010 to September 30, 2010, respectively, of servicing fee revenue that is eliminated upon consolidation of the VIE's at the LNR level. This income is then added back through consolidation at the LNR level as an adjustment to income allocable to noncontrolling entities and has no net impact on net income attributable to LNR.


(3)	During the year ended December 31, 2011, LNR recorded an income tax benefit from the settlement of certain tax liabilities.

Madison Funds—As of December 31, 2012, the Company owned a 29.52% interest in Madison International Real Estate Fund II, LP, a 32.92% interest in Madison International Real Estate Fund III, LP and a 29.52% interest in Madison GP1 Investors, LP (collectively, the "Madison Funds"). The Madison Funds invest in ownership positions of entities that own real estate assets. The Company determined that all of these entities are variable interest entities and that an external member is the primary beneficiary.

Oak Hill Funds—As of December 31, 2012, the Company owned a 5.92% interest in OHA Strategic Credit Master Fund, L.P. ("OHASCF"). OHASCF was formed to acquire and manage a diverse portfolio of assets, investing in distressed, stressed and undervalued loans, bonds, equities and other investments.

Real estate equity investments—As of December 31, 2012, the Company's real estate equity investments included equity interests in real estate ventures ranging from 31% to 70%, comprised of investments of $16.4 million in net lease assets, $25.7 million in operating properties and $5.5 million in land assets. As of December 31, 2011, the Company's real estate equity investments included $16.3 million in net lease assets, $38.0 million in operating properties and $14.8 million in land assets. One of the Company's equity investments in operating properties represents a 33% interest in residential property units. During the year ended December 31, 2012, the Company's earnings from its interest in this property includes income from sales of residential units of $26.0 million.

Oak Hill Advisors—In October 2011, the Company sold a substantial portion of its interests in Oak Hill Advisors, L.P. and related entities for $183.7 million of net cash proceeds, which resulted in a net gain of $30.3 million that was recorded in "Earnings from equity method investments" on the Company's Consolidated Statements of Operations. Glenn R. August, a former director of the Company and the president and senior partner of Oak Hill Advisors, L.P., participated in the transaction as a purchaser. In conjunction with the sale of its interests in Oak Hill Advisors, L.P., the Company retained interests in its share of certain unearned incentive fees of various funds. These fees are contingent on the future performance of the funds and the Company will recognize income related to these fees if and when the amounts are realized.

Other Equity Method Investments—The Company also had smaller investments in several other entities that were accounted for under the equity method. Several of these investments are in real estate related funds or other strategic investment opportunities within niche markets.

Summarized Financial Information—The following table presents the investee level summarized financial information of the Company's equity method investments, excluding LNR ($ in thousands):



	For the Years Ended December 31,
	2012		2011		2010
Income Statements
Revenues	$	401,870	$	198,340	$	590,265
Net income (loss) attributable to parent entities	$	304,960	$	97,066	$	342,661



	As of December 31,
	2012		2011
Balance Sheets
Total assets	$	2,830,087	$	3,079,736
Total liabilities	$	163,164	$	197,246
Noncontrolling interests	$	29,553	$	4,139
Total equity	$	2,637,370	$	2,878,351