[IMGCAP(2)]The portfolio is currently 99.6% occupied with anaverage lease term of 9.2 years. Nearly half of the approximately11.9-million-sf portfolio is leased to tenants who are ratedinvestment grade. An HFF spokesperson tells GlobeSt.com that "thisjust closed," however she could not specify anything further andcould not discuss the location of the properties at this time. Shealso could not say who the portfolio was purchased from, noting "wedid not handle the sale."

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[IMGCAP(3)]iStar representatives did not respond to GlobeSt.comqueries by deadline, however in the company's first quarter 2008results, which was issued only days ago, the firm says that thetransaction represented $1.1 billion of net book value and anappraised value of $1.6 billion. The company has receivedapproximately $810 million of proceeds from the initial closing ofthe financing and expects to receive the balance--$150 million--ofthe proceeds prior to the end of the second quarter, subject to thesatisfaction of customary real estate closing conditions. Thethree-year financing is pre-payable in 20 months. "We used theinitial proceeds together with other available corporate funds, torepay the remaining balance on the interim Fremont facility,"the firm says.

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[IMGCAP(4)]HFF's Krolman says that "historically, iStar wouldhave obtained financing on an unsecured basis by utilizing thecompany's BBB, investment grade credit rating. However, the currentmarket conditions are such that it was more efficient and costeffective to finance a subset of their existing single tenantportfolio on a secured basis."

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LaBine adds that "there were a number of ways to accomplish thisincluding putting together a club deal to finance the portfolio,splitting the portfolio into smaller sub-portfolios or financingthe whole portfolio with one source.

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[IMGCAP(5)]"iStar concluded that a one-stop-shop alternativewith GE was the best fit for their needs, as it was a simpler,cost-effective alternative that was accomplished in a very shorttime frame," Fowler said.

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Jay Sugarman, chairman and CEO of iStar, says in a preparedstatement that "we were looking for a financing partner for thisimportant transaction who we could rely on for timely anddependable execution. With the financial flexibility GE Real Estatewas able to provide, we were able to close the transaction in lessthan 45 days, helping to better position iStar longer-term andenabling us to begin taking advantage of the new, more attractivelending environment."

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This financing for iStar represents the largest debt deal of2008 for GE Real Estate. It is also the largest loan originated bythe company in the past several years, according to a prepared GEstatement.

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"While sizeable, this is a relatively conservative transaction,well-margined and secured by a geographically-diverse portfolio ofsingle-tenant properties. Almost half the tenants are ratedinvestment grade," says Alec Burger, president of GE Real Estate'sNorth America Lending division. "We've known the management ofiStar for several years and are confident they will use thisfinancing to build a strong platform for the future. We see this asthe first of many deals together."

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Natalie Dolce

Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.