NON-COMPETITION AGREEMENT

         THIS NON-COMPETITION AGREEMENT, is made and effective as of October 29,
2004 (this "AGREEMENT"), by and among NorthStar Capital Investment Corp., a
Maryland corporation ("NCIC"), and NorthStar Partnership, L.P., a Delaware
limited partnership of which NCIC is the sole general partner and holds a
majority of the partnership interests ("NPLP"), in favor of NorthStar Realty
Finance Corp., a Maryland corporation ("NRFC"), and NorthStar Realty Finance
Limited Partnership, a Delaware limited partnership of which NRFC is the sole
general partner ("NRFLP").

         WHEREAS, NRFLP has entered into (1) that certain Contribution Agreement
with NPLP and NorthStar Funding Managing Member Holdings LLC ("NFMM HOLDINGS"),
dated as of the date hereof and (2) that certain Contribution Agreement with
NorthStar Funding Managing Member Holdings LLC ("NSA HOLDINGS" and together with
NPLP and NFMM Holdings, the "CONTRIBUTORS"), dated as of the date hereof
(together, the "CONTRIBUTION AGREEMENTS"), pursuant to which NRFLP has agreed to
acquire the Contributed Assets from the Contributors at the Closing in
consideration of the Unit Distribution and $36,120,000 in cash (capitalized
terms used but not defined herein shall have the meaning ascribed to them in the
Contribution Agreements); and

         WHEREAS, NRFC and NRFLP have expressly stated that it is a condition of
the closing of the transactions contemplated by the Contribution Agreements that
NCIC and NPLP execute and deliver this Agreement in favor of NRFC and NRFLP.

         NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
foregoing and the respective representations, warranties, covenants, agreements
and conditions contained in the Contribution Agreements and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree, subject
to the terms and conditions of the Contribution Agreements, as follows:

               1. DEFINITIONS.

               (a)  "AFFILIATE" means any Person directly or indirectly
                    controlled by, or under direct or indirect common control
                    with, NCIC or NPLP.

               (b)  "BOARD" means the board of directors of NCIC or similar
                    governing body of NPLP, as applicable.

               (c)  "BUSINESSES" means:

                    (i)  the development of or equity investment in net leased
                         real property or in sale-leaseback transactions
                         involving build-to-suit or renovated commercial,
                         retail, office, industrial or warehouse facilities
                         ("Net Lease Investments");

                   (ii)  the acquisition and the origination of or investment in
                         mezzanine and subordinate real estate debt; and

                   (iii) investments in commercial mortgage-backed securities,
                         debt issued by real estate investment trusts, real
                         estate collateralized debt obligations ("CDOs") or
                         residential mortgage-backed securities to be financed
                         by the issuance of CDOs or other similar capital
                         structures.

                   PROVIDED THAT in no event shall the "BUSINESSES" mean or
                   include:

                    (1)  investments in any non-performing or distressed
                         properties, loans, businesses or securities;

                    (2)  investments by, through or in any venture or equity
                         opportunity vehicle or fund whose primary objective is
                         to achieve growth in asset value rather than current
                         cash flow;

                    (3)  any existing or future debt or equity investments in or
                         related to assets of NCIC or NPLP or their respective
                         Subsidiaries and Affiliates existing as of the date
                         hereof that are not being contributed pursuant to the
                         Contribution Agreements;

                    (4)  any debt or equity investments in or related to hotel
                         properties;

                    (5)  any investment related to or through Koll Development
                         Company and its subsidiaries and any successor thereto;
                         or

                    (6)  any equity investments in or related to properties that
                         do not constitute Net Lease Investments.

               (d)  "CONTINUING DIRECTORS" means any member of the Board on the
                    date hereof and any other member of the Board who shall be
                    recommended or elected to succeed or become a Continuing
                    Director by a majority of the Continuing Directors who are
                    then members of the Board.

               (e)  "OFFICER" means any officer of NRFC who, on the date hereof
                    or at any time during the Term, holds any of the following
                    titles or positions: (1) President; (2) Chief Executive
                    Officer; (3) Chief Financial Officer; (4) Chief Investment
                    Officer; (5) Executive Vice President, or (6) any other
                    executive officer of NRFC, initially including Mr. David
                    Hamamoto, Chief Executive Officer and President, Mr. Mark
                    Chertok, Chief Financial Officer, Mr. Jean-Michel
                    Wasterlain, Chief Investment Officer and Executive President
                    and Mr. Daniel Gilbert, Executive Vice President.

               (f)  "PERSON" means any individual, corporation, association,
                    partnership, limited liability company, joint venture,
                    unincorporated organization,

                    trust, trustee, executor, administrator or other legal
                    representative, governmental entity, or other entity or
                    organization.

               (g)  "SUBSIDIARIES" means, when used with reference to any party
                    hereto, any corporation, partnership, limited liability
                    company, or other entity, a majority of the outstanding
                    voting power of which is owned directly or indirectly by
                    such party or, in the case of NCIC or NPLP only, of which
                    NCIC or NPLP or one of their respective Subsidiaries is the
                    sole managing member or sole general partner; provided,
                    however, that for purposes of this definition, (i) any
                    corporation, partnership, limited liability company, or
                    other entity which is controlled, directly or indirectly, by
                    NRFC or NRFLP shall be deemed a Subsidiary of NRFC, and (ii)
                    on or after the date hereof, none of NRFC, NRFLP or any of
                    their Subsidiaries shall be deemed Subsidiaries of NCIC or
                    NPLP.

               (h)  "TERM" has the meaning assigned to it in Section 9.

               (i)  "TERRITORY" means the United States of America.

               2. NON-COMPETITION AND NON-SOLICITATION.

               (a)  For the Term of this Agreement, none of (i) NCIC, (ii) NPLP,
                    (iii) any Subsidiary of NCIC or NPLP, or (iv) any successor
                    or assign of NCIC or NPLP or their respective Subsidiaries,
                    except for any successor or assign of NCIC or NPLP or their
                    respective Subsidiaries pursuant to the merger described in
                    Section 2(c)(i) hereof, shall directly or indirectly, engage
                    in any of the Businesses within the Territory; provided,
                    however, that nothing contained herein shall prohibit NCIC
                    or NPLP from (A) owning, directly or indirectly, less than
                    5% of any class of voting securities of any company engaged
                    in any of the Businesses, unless such company would become a
                    Subsidiary of NCIC or NPLP as a result of the acquisition of
                    such voting securities, (B) directly or indirectly acquiring
                    a business which engages in any of the Businesses or in any
                    portion thereof if the assets of such competing business
                    constitute 20% or less of the gross assets, on a historical
                    cost basis, of a larger business so acquired by NCIC or
                    NPLP, or (C) acquiring a business that engages in any of the
                    Businesses with the Territory if the assets of such business
                    constitute more than 20%, but not more than 50% of the gross
                    assets, on a historical cost basis, of a larger business so
                    acquired by NCIC or NPLP provided that (1) NCIC or NPLP, as
                    applicable, disposes of such competitive business within one
                    (1) year of its acquisition by NCIC or NPLP and (2) NCIC or
                    NPLP, as applicable, first offers to NRFC in writing the
                    right to acquire such competitive business before offering
                    to sell such competitive business to a third party and may
                    only sell such competitive business to another party if
                    after thirty days (30) NRFC determines not to acquire such
                    business, provided that, the terms of the sale to any third
                    party may not be materially more favorable than the terms
                    offered to NRFC.

               (b)  For the Term of this Agreement, NCIC and NPLP shall not and
                    shall cause any Subsidiary or Affiliate of NCIC or NPLP not
                    to solicit, raid, entice, induce or contact, or attempt to
                    solicit, raid, entice, induce or contact, any individual who
                    currently is or at any time during the Term shall be an
                    Officer to do anything from which NCIC, NPLP and their
                    respective Subsidiaries and Affiliates are restricted from
                    doing by reason of this Agreement, including to terminate
                    such Officer's employment with NRFC, NFRLP or their
                    respective Subsidiaries or to become an officer, director or
                    employee of NCIC, NPLP or their respective Subsidiaries; and
                    NCIC and NPLP shall not and shall cause any Subsidiary or
                    Affiliate of NCIC or NPLP not to approach any such Officer
                    for such purpose or authorize or participate in the taking
                    of such actions by any other Person or assist or participate
                    with any such Person in taking such action.

               (c)  Nothing in this Agreement shall be interpreted as
                    prohibiting a Person then engaged in any of the Businesses
                    from (i) merging with NCIC or NPLP or any Subsidiary of NCIC
                    or NPLP, provided that (1) the holders of NCIC or NPLP's
                    outstanding equity interests prior to such merger hold, in
                    their capacity as holders of equity interests of NCIC or
                    NPLP, as applicable, less than 50% of the voting power of
                    NCIC or NPLP's outstanding equity interests following such
                    merger or, if NCIC or NPLP is not the surviving entity of
                    such merger, the surviving entity's outstanding equity
                    interests immediately following the merger, and (2) after
                    the consummation of such merger, (A) a majority of the Board
                    of NCIC, NPLP or the surviving entity, as applicable, shall
                    consist of individuals other than Continuing Directors, (B)
                    the co-chief executive officers of NCIC as of the date
                    hereof cease to serve in such capacity, and (C) David T.
                    Hamamoto is not a senior executive officer of the entity
                    surviving the merger, and (ii) thereafter, carrying on its
                    business in competition with NRFC or NRFLP within the
                    Territory.

               3. EQUITABLE REMEDIES. In the event NCIC or NPLP breaches, or
          threatens to breach, any term, provision, covenant or condition
          contained in this Agreement, NCIC or NPLP agrees that NRFC and NRFLP
          shall be entitled to both temporary and permanent injunctive relief
          against any such actual breach or threatened breach. The right of NRFC
          and NRFLP to such relief shall not be construed to prevent NRFC or
          NRFLP from pursuing, either consecutively or concurrently, any and all
          other legal or equitable remedies available for such breach or
          threatened breach, specifically including, without limitation, the
          recovery of monetary damages.

               4. APPLICABLE LAW AND CHOICE OF FORUM. This Agreement shall be
          governed by, and construed and enforced in accordance with, the laws
          of the State of New York (regardless of the laws that might otherwise
          govern under applicable principles of conflicts of laws thereof) as to
          all matters, including but not limited to matters of validity,
          construction, effect, performance and remedies.

               5. SEVERABILITY. If any term, provision, covenant or condition of
          this Agreement is declared invalid, illegal, unenforceable,
          ineffective or inoperative for any reason, such declaration shall not
          have the effect of invalidating or voiding the remainder of this
          Agreement, and the parties hereto agree that the part or parts of this
          Agreement so held to be invalid, illegal, unenforceable, ineffective
          or inoperative will be deemed to have been stricken from this
          Agreement and the remainder hereof will have the same force and effect
          as if such part or parts had never been included herein.

               6. ENTIRE AGREEMENT. This Agreement constitutes the entire
          agreement between the parties with respect to the subject matter
          hereof and shall not be altered, modified or amended, in whole or in
          part, except by the express written authorization and consent of the
          parties. In the event of a conflict between the terms hereof and those
          contained in the Contribution Agreements, the terms of this Agreement
          shall prevail as to the matters set forth herein.

               7. WAIVERS. Any waiver by any party, whether express or implied,
          of any breach of any term, provision, covenant or condition of this
          Agreement shall not constitute a waiver as to any subsequent breach of
          the same or of any other term, provision, covenant or condition
          hereof. Failure of a party to declare any breach upon the occurrence
          thereof, or any delay by any party in taking action with respect to
          any breach, shall not waive any such breach.

               8. NOTICES. Any and all notices or demands which must or may be
          given hereunder or under any other instrument contemplated hereby
          shall be given in accordance with the terms and conditions of the
          Contribution Agreement.

               9. TERMINATION. This Agreement and the rights and obligations of
          the parties hereunder shall terminate on the earliest to occur of (a)
          the date mutually agreed upon by the parties hereunder; (b) the
          occurrence of a merger described in Section 2(c)(i); or (c) the later
          to occur of (i) the date that is three (3) years from the date hereof,
          or (ii) the date that David Hamamoto is no longer a Chief Executive
          Officer, President or other senior executive officer employed by (A)
          NRFC and (B) NCIC or any successor or assign of NCIC or NPLP or their
          respective Subsidiaries, except for any such successor or assign
          pursuant to a merger satisfying the conditions described in Section
          2(c)(i) (other than the condition described in Section 2(c)(i)(2)(C))
          hereof (the "Term"). Upon and following the termination of this
          Agreement, no Party to this Agreement shall be required by reason of
          any provision of this Agreement to abide by any restriction on its
          business activities provided in this Agreement.

               10. PARTIES IN INTEREST. This Agreement and all terms,
          provisions, covenants and conditions contained herein shall inure to
          the benefit of and shall be binding upon the undersigned parties and
          their respective successors and assigns.

               11. ASSIGNMENT. This Agreement shall not be assignable by a party
          without the prior written consent of the other parties hereto.

               12. COUNTERPARTS. This Agreement may be executed in any number of
          counterparts, each of which shall be deemed to be an original and all
          of which together shall be deemed to be one and the same instrument.

         IN WITNESS WHEREOF, the parties hereto have caused this Non-Competition
Agreement to be executed as of the date first written above.

                            NORTHSTAR CAPITAL INVESTMENT CORP.

                            By: /s/ Richard J. McCready
                                --------------------------------------------
                                Name: Richard J. McCready
                                Title: Chief Operating Officer and Secretary

                            NORTHSTAR PARTNERSHIP, L.P.

                               By: NORTHSTAR CAPITAL INVESTMENT
                                   CORP., its General Partner

                                   By: /s/ Richard J. McCready
                                       -------------------------------------
                                       Name: Richard J. McCready
                                       Title: Chief Operating Officer and
                                             Secretary

                            NORTHSTAR REALTY FINANCE CORP.

                            By: /s/ Mark E. Chertok
                                --------------------------------------------
                                Name: Mark E. Chertok
                                Title: Chief Financial Officer and Treasurer

                            NORTHSTAR REALTY FINANCE LIMITED
                            PARTNERSHIP

                                By: NORTHSTAR REALTY FINANCE
                                    CORP., its General Partner

                                    By: /s/ Mark E. Chertok
                                        ------------------------------------
                                        Name: Mark E. Chertok
                                        Title: Chief Financial Officer and
                                               Treasurer