Fitch Affirms NorthStar Realty's 'CAM2' CRE CDO Asset Manager Rating.

NEW YORK -- Fitch Ratings affirms the 'CAM2' Commercial Real Estate CDO asset manager rating for NorthStar Realty Finance Corp. (NorthStar). The rating is supported by the performance track record of NorthStar's outstanding collateralized debt obligation (CDO) portfolios, which have experienced positive credit quality migration, and the company's strategic commercial real estate focus. Additionally, the rating recognizes NorthStar's recent acquisition of Timarron Capital (now NRF Capital), its commercial mortgage origination business, and its efforts to establish itself as a special servicer.

NorthStar's scores issued for each group of criteria factors are summarized as follows:

-- Company and Management Experience '2.00';

-- Staffing '2.50';

-- Procedures and Controls '2.25';

-- Portfolio Management '1.75';

-- CDO Administration '2.25';

-- Technology '2.50';

-- CDO Portfolio Performance '2.00'.

NorthStar's composite score of '2.08' is used to establish a systematically applied quantitative link between its asset manager rating and Fitch's CDO rating criteria, in accordance with the approach outlined in Fitch Research on 'Reviewing and Rating CDO Asset Managers,' dated Jan. 27, 2006, available on the Fitch Ratings' web site at www.fitchratings.com. A company profile and an expanded report detailing the seven factors which contributed to NorthStar's rating will be available on Fitch's public website www.fitchratings.com.

NorthStar Realty Finance Corp. (NYSE: NRF) is an internally managed real estate investment trust (REIT) that originates and invests in commercial real estate debt, real estate securities and net lease properties. The company's CDO portfolios are made up of a variety of commercial real estate securities including commercial mortgage-backed securities (CMBS), REIT fixed-income securities, other commercial real estate CDOs, B-notes, mezzanine loans, and credit tenant leases (CTLs). As of June 30, 2006, NorthStar had over $3.7 billion in assets under management consisting of real estate securities and loan positions financed through seven issued CDOs (N-Star CDO I, II, III, IV, V, VI and VII) and real estate securities that are being accumulated under a warehouse arrangement for a proposed eighth CDO, and net lease properties, as well as various short- and long-term investments.

Fitch rates CDO asset managers by asset class, on a scale of 1 to 5, with 1 being the highest rating. These ratings are based on a standardized scorecard methodology that includes factors in each of the seven groups noted above.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.