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NorthStar Realty Finance Announces Fourth Quarter Dividend

NEW YORK, Jan. 20 /PRNewswire-FirstCall/ -- NorthStar Realty Finance Corp. (NYSE: NRF) today announced that its Board of Directors has declared a dividend of $0.25 per share of common stock, payable with respect to the quarter ended December 31, 2008. The dividend will be paid in a combination of cash, not to exceed 40% in the aggregate, and common stock, and is expected to be paid on February 27, 2009 to shareholders of record as of the close of business on January 28, 2009. Nonetheless, the Company reserves the right to pay the dividend entirely in cash and will also reevaluate the amount of the dividend payable in cash on a quarterly basis. Additionally, the Company intends to distribute 90% of its 2009 taxable income as dividends and intends to "true-up" the dividend at year-end if necessary to meet the 90% distribution target.

On an annualized basis, the Company's dividend policy this quarter would enable the Company to retain approximately $43 million of additional liquidity in 2009 to further enhance its balance sheet and protect against uncertainties in the capital markets.

In accordance with Internal Revenue procedure, the dividend will be payable in cash and/or shares of common stock at the election of the stockholder and subject to a cash limit described below. Stockholders who elect to receive the dividend in cash may receive up to $0.25 per share in cash, however, the Company will limit the amount of cash payable pursuant to the dividend to 40% of the aggregate value of the dividend, or approximately $7 million. If stockholders representing more than 40% of the outstanding shares elect to receive cash, each stockholder making the cash election will receive a prorated distribution of the available cash, and will receive the remainder of the $0.25 dividend in shares of the Company's common stock. Stockholders who do not elect to receive the dividend in cash will receive the dividend in shares of common stock.

The number of shares issued pursuant to the dividend will be calculated based on the average of the volume weighted trading price of the Company's common stock on February 19 and 20, 2009.

A letter and an election form will be mailed to common stockholders promptly after January 28, 2009, and will describe in more detail the terms of the dividend. The election must be received by the Company's transfer agent prior to 5:00 p.m. Eastern time on February 18, 2009.

The Company generally expects the dividend to be treated for federal income tax purposes as a taxable distribution whether it is received in cash or shares.

About NorthStar Realty Finance Corp.

NorthStar Realty Finance Corp. is an internally managed REIT that primarily originates and invests in commercial real estate debt, real estate securities and net lease properties. For more information about NorthStar Realty Finance Corp., please visit

Safe Harbor Statement

Certain items in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements; NorthStar Realty can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from NorthStar Realty's expectations include, but are not limited to changes in economic conditions generally and the real estate and bond markets specifically, legislative or regulatory changes (including changes to laws governing the taxation of REITs), availability of capital, interest rates and interest rate spreads, policies and rules applicable to REITs, the continued service of key management personnel, the effect of competition in the real estate finance industry, the costs associated with compliance and corporate governance, including the Sarbanes-Oxley Act and related regulations and requirements, and other risks detailed from time to time in NorthStar Realty's SEC reports. Factors that could cause actual results to differ materially from those in the forward-looking statements are specified in the Company's Annual Report on Form 10-K for the year ended December 31, 2007. Such forward-looking statements speak only as of the date of this press release. NorthStar Realty expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.

SOURCE  NorthStar Realty Finance Corp.

    -0-                           01/20/2009
    /CONTACT:  Investor Relations, Joseph Calabrese, +1-212-827-3772/
    /Web Site: /

CO:  NorthStar Realty Finance Corp.

ST:  New York

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