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
	September 30, 2013		December 31, 2012		For the Three Months Ended September 30,					For the Nine Months Ended September 30,
					2013			2012		2013		2012
LNR	$	—	$	205,773	$	—		$	15,206	$	16,465	$	36,017
Madison Funds	63,784		56,547		3,674			3,206		10,798		11,937
Oak Hill Funds	23,831		29,840		1,207			2,049		3,272		5,932
Real estate equity investments	45,927		47,619		(966		)	2,219		1,755		17,709
Other equity method investments	46,335		47,939		430			39		2,056		4,330
Total equity method investments	$	179,877	$	387,718	$	4,345		$	22,719	$	34,346	$	75,925
Other	7,633		11,125
Total other investments	$	187,510	$	398,843

Equity Method Investments

LNR—In July 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.

Beginning in September 2012, the Company and other owners of LNR entered into negotiations with potential purchasers of LNR. After an extensive due diligence and negotiation process, the LNR owners entered into a definitive contract to sell LNR in January 2013 at a fixed sale price which, from the Company's perspective, reflected in part the Company's then-current expectations about the future results of LNR and potential volatility in its business. The definitive sale contract provided that LNR would not make cash distributions to its owners during the fourth quarter of 2012 through the closing of the sale. Notwithstanding the fixed terms of the contract, our investment balance in LNR increased due to equity in earnings recorded which resulted in our recognition of other than temporary impairment on our investment during the nine months ended September 30, 2013. In April 2013, the Company completed the sale of its 24% equity interest in LNR and received $220.3 million in net proceeds. 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 Period from April 1, 2013 to April 19, 2013			For the Three Months Ended June 30, 2012			For the Period from October 1, 2012 to April 19, 2013			For the Nine Months Ended June 30, 2012
Income Statements
Total revenue(2)	$	32,794		$	86,038		$	179,373		$	234,734
Income tax expense	$	736		$	1,293		$	2,137		$	4,935
Net income (loss) attributable to LNR	$	(51,983	)	$	63,420		$	179,719		$	150,219
iStar's ownership percentage	24		%	24		%	24		%	24		%
Equity in earnings from LNR(3)	$	—		$	15,206		$	55,553		$	36,017



	As of June 30,			As of September 30,
	2013			2012
Balance Sheets
Total assets(2)	$	—		$	98,513,452
Total debt(2)	$	—		$	97,521,520
Total liabilities(2)	$	—		$	97,639,696
Noncontrolling interests	$	—		$	8,067
LNR Property LLC equity	$	—		$	865,689
iStar's ownership percentage	0		%	24		%
iStar's equity in LNR(4)	$	—		$	205,773

Explanatory Notes:

_______________________________________________________________________________


(1)	The Company recorded its investment in LNR, which was sold in April 2013, on a one quarter lag, therefore, amounts in the Company's financial statements for the three and nine months ended September 30, 2013 and 2012 are based on balances and results from LNR for the period from April 1, 2013 to April 19, 2013 and for the period from October 1, 2012 to April 19, 2013, respectively.

(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 included in the amounts presented above. As of September 30, 2012, the assets of these trusts, which aggregated $97.5 billion were the sole source of repayment of the related liabilities, which aggregated $97.2 billion and are non-recourse to LNR and its equity holders, including the Company. Excluding the amounts related to VIEs, as of September 30, 2012, total assets were $1.38 billion, total debt was $398.9 million and total liabilities were $517.1 million. In addition, total revenue presented above includes $5.1 million and $27.5 million for the period from April 1, 2013 to April 19, 2013 and three months ended June 30, 2012, respectively, and $55.5 million and $72.6 million for the period from October 1, 2012 to April 19, 2013 and nine months ended June 30, 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 loss for the period from April 1, 2013 to April 19, 2013 had already been considered in the Company's other than temporary impairment assessment during the first and second quarters of 2013. As such, no equity in earnings was recorded during the quarter ended September 30, 2013. The total equity in earnings recognized for LNR was $55.6 million for the nine months ended September 30, 2013.


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

The following table reconciles the activity related to the Company's investment in LNR for each of the three months ended March 31, 2013, June 30, 2013 and September 30, 2013 and for the nine months ended September 30, 2013 ($ in thousands):



	For the Three Months Ended March 31, 2013			For the Three Months Ended June 30, 2013			For the Three Months Ended September 30, 2013		For the Nine Months Ended September 30, 2013
Carrying value of LNR at beginning of period	$	205,773		$	220,281		$	—	$	205,773
Equity in earnings of LNR for the period	$	45,375		$	10,178		$	—	$	55,553		(a)
Balance before other than temporary impairment	$	251,148		$	230,459		$	—	$	261,326
Other than temporary impairment	$	(30,867	)	$	(10,178	)	$	—	$	(41,045	)	(b)
Sales proceeds pursuant to contract	$	—		$	(220,281	)	$	—	$	(220,281	)
Carrying value of LNR at end of period	$	220,281		$	—		$	—	$	—

For the nine months ended September 30, 2013, the amount that was recognized as income in the Company's Consolidated Statements of Operations is the sum of items (a), (b) and $1.7 million of income recognized for the release of other comprehensive income related to LNR upon sale, or $16.5 million.

Madison funds—As of September 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 September 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 nine months ended September 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. As of September 30, 2013, the Company has a recorded equity interest of $12.2 million, which represents the Company's proportionate share of the assets retained on a carryover basis of $10.6 million and subsequent contributions of $1.6 million.

In addition, as of September 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, $16.7 million in operating properties and $0.6 million in 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 $0.5 million and $4.0 million for the three months ended September 30, 2013 and 2012, respectively, and $4.5 million and $22.2 million for the nine months ended September 30, 2013 and 2012, respectively.

Other equity method investments—The Company also had smaller investments in real estate related funds and other strategic investments in several other entities that were accounted for under the equity method.