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				Equity in Earnings
	June 30, 2013		December 31, 2012		For the Three Months Ended June 30,						For the Six Months Ended June 30,
					2013			2012			2013		2012
LNR	$	—	$	205,773	$	1,719		$	8,674		$	16,465	$	20,811
Madison Funds	60,109		56,547		4,865			(767		)	7,124		8,731
Oak Hill Funds	24,624		29,840		909			508			2,065		3,883
Real estate equity investments	47,684		47,619		957			8,719			2,721		15,490
Other equity method investments	48,166		47,939		(127		)	1,286			1,626		4,291
Total equity method investments	$	180,583	$	387,718	$	8,323		$	18,420		$	30,001	$	53,206
Other	9,035		11,125
Total other investments	$	189,618	$	398,843

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.

On April 22, 2013, the Company completed the sale of its 24% equity interest in LNR and received $220.3 million in net proceeds, which approximated our carrying value on the disposition date. Approximately $25.2 million of net proceeds were placed in escrow for potential indemnification obligations through April 2014. The Company is not currently aware that any material indemnification claims are probable of occurring.

The following tables represent the latest available investee level summarized financial information for LNR ($ in thousands)(1):



	For the Three Months Ended March 31,						For the Six Months Ended March 31,
	2013			2012			2013			2012
Income Statements
Total revenue(2)	$	68,779		$	71,337		$	146,579		$	148,696
Income tax expense	$	1,121		$	1,805		$	1,401		$	3,642
Net income attributable to LNR	$	42,452		$	36,178		$	231,701		$	86,799
iStar's ownership percentage	24		%	24		%	24		%	24		%
Subtotal	$	10,178		$	8,674		$	55,553		$	20,811
Basis difference(3)	$	(8,459	)	$	—		$	(39,088	)	$	—
iStar's equity in earnings from LNR	$	1,719		$	8,674		$	16,465		$	20,811



	As of March 31,			As of September 30,
	2013			2012
Balance Sheets
Total assets(2)	$	1,675,581		$	1,384,337
Total debt(2)	$	492,590		$	398,912
Total liabilities(2)	$	575,738		$	517,088
Noncontrolling interests	$	1,603		$	1,560
LNR Property LLC equity	$	1,098,241		$	865,689
iStar's ownership percentage	24		%	24		%
iStar's equity in LNR(4)	$	—		$	205,773

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 three and six months ended June 30, 2013 and 2012 are based on balances and results from LNR for the three and six months ended March 31, 2013 and 2012.

(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 March 31, 2013 and September 30, 2012, the assets of these trusts, which aggregated $92.50 billion and $97.52 billion, respectively, were the sole source of repayment of the related liabilities, which aggregated approximately $92.15 billion and $97.21 billion, respectively, and are non-recourse to LNR and its equity holders, including the Company. In addition, total revenue presented above includes $21.1 million and $16.3 million for the three months ended March 31, 2013 and 2012, respectively, and $50.4 million and $45.1 million for the six months ended March 31, 2013 and 2012, 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)	The Company has limited its recognition of its proportionate share of earnings in LNR for the three and six months ended June 30, 2013 to the amount of proceeds it received from the sale.


(4)	Represents the Company's investment in LNR at June 30, 2013 and December 31, 2012, respectively.

Madison Funds—As of June 30, 2013, 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 these entities are variable interest entities and that the Company is not the primary beneficiary.

Oak Hill Funds—As of June 30, 2013, 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. The Company determined that this entity is a variable interest entity and that the Company is not the primary beneficiary.

Real estate equity investments—During the quarter ended June 30, 2013, the Company sold land for net proceeds of $21.4 million to a newly formed unconsolidated entity in which the Company has a preferred partnership interest and a 47.5% equity interest. The Company has a recorded equity interest of $10.6 million, which represents the Company's proportionate share of the assets retained on a carryover basis.

As of June 30, 2013, 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, $18.2 million in operating properties and $13.1 million in other land assets. As of December 31, 2012, the Company's real estate equity investments included $16.4 million in net lease assets, $25.7 million in operating properties and $5.5 million in land assets. One of the Company's equity investments in operating properties represents a 33% interest in residential property units. The Company's earnings from its interest in this property includes income from sales of residential units of $1.5 million and $10.2 million for the three months ended June 30, 2013 and 2012, respectively, and $4.0 million and $18.2 million for the six months ended June 30, 2013 and 2012, respectively.

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 investments.