<SEC-DOCUMENT>0001179110-15-008577.txt : 20150526
<SEC-HEADER>0001179110-15-008577.hdr.sgml : 20150525
<ACCEPTANCE-DATETIME>20150526164255
ACCESSION NUMBER:		0001179110-15-008577
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20150521
FILED AS OF DATE:		20150526
DATE AS OF CHANGE:		20150526

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ISTAR FINANCIAL INC
		CENTRAL INDEX KEY:			0001095651
		STANDARD INDUSTRIAL CLASSIFICATION:	REAL ESTATE INVESTMENT TRUSTS [6798]
		IRS NUMBER:				956881527
		FISCAL YEAR END:			1231

	BUSINESS ADDRESS:	
		STREET 1:		1114 AVENUE OF THE AMERICAS
		STREET 2:		39TH FLOOR
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10036
		BUSINESS PHONE:		2129309400

	MAIL ADDRESS:	
		STREET 1:		1114 AVENUE OF THE AMERICAS
		STREET 2:		39TH FLOOR
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10036

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	STARWOOD FINANCIAL INC
		DATE OF NAME CHANGE:	19990923

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			SUGARMAN JAY
		CENTRAL INDEX KEY:			0001220479

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-15371
		FILM NUMBER:		15889886

	MAIL ADDRESS:	
		STREET 1:		24301 WALDEN CENTER DR
		CITY:			BONITA SPRINGS
		STATE:			FL
		ZIP:			34134
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>edgar.xml
<DESCRIPTION>FORM 4 -
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0306</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2015-05-21</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0001095651</issuerCik>
        <issuerName>ISTAR FINANCIAL INC</issuerName>
        <issuerTradingSymbol>SFI</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001220479</rptOwnerCik>
            <rptOwnerName>SUGARMAN JAY</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>1114 AVENUE OF THE AMERICAS, 39TH FLOOR</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>NEW YORK</rptOwnerCity>
            <rptOwnerState>NY</rptOwnerState>
            <rptOwnerZipCode>10036</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>1</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle>Chairman and CEO</officerTitle>
            <otherText></otherText>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
            <transactionDate>
                <value>2015-05-21</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>S</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>63866</value>
                    <footnoteId id="F1"/>
                </transactionShares>
                <transactionPricePerShare>
                    <value>14.36</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>2547687</value>
                    <footnoteId id="F2"/>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
            <transactionDate>
                <value>2015-05-21</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>S</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>88000</value>
                    <footnoteId id="F1"/>
                </transactionShares>
                <transactionPricePerShare>
                    <value>14.36</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>2547687</value>
                    <footnoteId id="F2"/>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
        <nonDerivativeHolding>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>40544</value>
                    <footnoteId id="F2"/>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>I</value>
                </directOrIndirectOwnership>
                <natureOfOwnership>
                    <value>By spouse</value>
                </natureOfOwnership>
            </ownershipNature>
        </nonDerivativeHolding>
        <nonDerivativeHolding>
            <securityTitle>
                <value>Preferred Stock, Series D</value>
            </securityTitle>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>2000</value>
                    <footnoteId id="F3"/>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeHolding>
        <nonDerivativeHolding>
            <securityTitle>
                <value>Restricted Stock Units</value>
            </securityTitle>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>21714</value>
                    <footnoteId id="F3"/>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeHolding>
    </nonDerivativeTable>

    <derivativeTable></derivativeTable>

    <footnotes>
        <footnote id="F1">On May 21, 2015, the Reporting Person, Mr. Jay Sugarman, disposed of 63,866 shares of iStar common stock to a trust (Trust 1) and disposed of 88,000 shares of iStar common stock to a separate trust (Trust 2) in private transactions. The price shown represents the current market price of iStar common stock on the date of the transactions. The beneficiaries of Trust 1 are the Reporting Person's children. The beneficiaries of Trust 2 are the Reporting Person's spouse and children.</footnote>
        <footnote id="F2">Following the transactions reported in this Form 4, the Reporting Person is the direct beneficial owner of 2,547,687 shares of iStar common stock and the indirect beneficial owner of 40,544 shares of iStar common stock owned by his spouse.</footnote>
        <footnote id="F3">The Reporting Person is also the direct beneficial owner of 2,000 shares of iStar Series D preferred stock and 21,714 restricted stock units representing the right to receive an equivalent number of shares of iStar common stock (net of shares deducted for statutory minimum required tax withholdings) if and when such units vest.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>s/ Jay Sugarman</signatureName>
        <signatureDate>2015-05-26</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
