Exhibit
4.2


[Face of Note]


[Insert the Global Note Legend
and/or Private Placement Legend, if applicable pursuant to the provisions of
the Indenture]


CUSIP/CINS 45031U
BA 8


Senior Floating Rate
Notes due 2009


	
  No.

  	
   

  	
   

  	
  $500,000,000

  



 


iSTAR FINANCIAL INC.


promises to pay to CEDE & CO., or registered
assigns, the principal sum of FIVE HUNDRED MILLION


Dollars on September 15,
2009.


Interest Payment
Dates:  March 15, June 15,
September 15 and December 15


Record Dates:  March 1, June 1, September 1
and December 1


Dated:  September 18, 2006


	
   

  	
  iSTAR FINANCIAL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  
	
   

  
	
  This is one of the Notes referred to in the
  within-mentioned Indenture:

  	
   

  	
  Date: 

  	
   

  	
   

  
	
   

  
	
  U.S. BANK TRUST NATIONAL ASSOCIATION

  
	
  as Trustee

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  
								



 










 



[Back of Note]

Senior Floating Rate Notes due 2009


Capitalized terms used herein shall have the meanings
assigned to them in the Indenture referred to below unless otherwise indicated.


1.             INTEREST.  iStar Financial Inc., a Maryland corporation
(the “Company”), promises to pay interest on
the principal amount of this Note quarterly in arrears on March 15, June 15,
September 15 and December 15 of each year, or if any such day is not a Business
Day, on the next succeeding Business Day (each an “Interest
Payment Date”), at the rate per annum, reset quarterly, equal to
three month LIBOR (as defined below) plus 0.34%.  Interest on the Notes will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from September 18, 2006; provided that
if there is no existing Default in the payment of interest, and if this Note is
authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be
December 15, 2006.  The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at the rate then in effect; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful.  Interest on the Notes will be computed on the
basis of the actual number of days in the applicable Interest Period divided by
360, as further described below.


“LIBOR,” with
respect to an Interest Period, will be the rate (expressed as a percentage per
annum) for deposits in United States dollars for a three-month period beginning
on the second London Banking Day after the Determination Date that appears on
Telerate Page 3750 as of 11:00 a.m., London time, on the Determination
Date.  If Telerate Page 3750 does not
include such a rate or is unavailable on a Determination Date, the Calculation
Agent will request the principal London office of each of four major banks in
the London interbank market, as selected by the Calculation Agent, to provide
such bank’s offered quotation (expressed as a percentage per annum), as of
approximately 11:00 a.m., London time, on such Determination Date, to prime
banks in the London interbank market for deposits in a Representative Amount in
United States dollars for a three-month period beginning on the second London
Banking Day after the Determination Date. 
If at least two such offered quotations are so provided, LIBOR for the
Interest Period will be the arithmetic mean of such quotations.  If fewer than two such quotations are so
provided, the Calculation Agent will request each of three major banks in New
York City, as selected by the Calculation Agent, to provide such bank’s rate
(expressed as a percentage per annum), as of approximately 11:00 a.m., New York
City time, on such Determination Date, for loans in a Representative Amount in
United States dollars to leading European banks for a three-month period
beginning on the second London Banking Day after the Determination Date. If at
least two such rates are so provided, LIBOR for the Interest Period will be the
arithmetic mean of such rates.  If fewer
than two such rates are so provided, then LIBOR for the Interest Period will be
LIBOR in effect with respect to the immediately preceding Interest Period.


“Interest Period”
means the period commencing on and including an Interest Payment Date and
ending on and including the day immediately preceding the next succeeding
interest Payment Date, with the exception that the first Interest Period shall
commence on and include September 18, 2006 and end on and include December 14,
2006.










 



“Determination Date,”‘
with respect to an Interest Period, will be the second London Banking Day
preceding the first day of the Interest Period.


“London Banking Day”
is any day in which dealings in United States dollars are transacted or, with
respect to any future date, are expected to be transacted in the London
interbank market.


“Representative Amount”
means a principal amount of not less than U.S. $1,000,000 for a single
transaction in the relevant market at the relevant time.


“Telerate Page 3750”
means the display designated as “Page 3750” on the Moneyline Telerate service
(or such other page as may replace Page 3750 on that service).


The amount of interest for each day that the Notes are
outstanding (the “Daily Interest Amount”) will be
calculated by dividing the interest rate in effect for such day by 360 and multiplying
the result by the principal amount of the Notes. The amount of interest to be
paid on the Notes for each Interest Period will be calculated by adding the
Daily Interest Amounts for each day in the Interest Period.


All percentages resulting from any of the above
calculations will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point, with five one-millionths of a
percentage point being rounded upwards (e.g., 9.876545%
(or .09876545) being rounded to 9.87655% (or .0987655)) and all dollar amounts
used in or resulting from such calculations will be rounded to the nearest cent
(with one-half cent being rounded upwards).


The interest rate on the Notes will in no event be
higher than the maximum rate permitted by New York law as the same may be
modified by United States law of general application.


The Calculation Agent will, upon the request of the
holder of any Note, provide the interest rate then in effect with respect to
the Notes. All calculations made by the Calculation Agent in the absence of
manifest error will be conclusive for all purposes and binding on the Company
and the holders of the Notes.


2.             METHOD OF PAYMENT.  The Company will pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the March 1, June 1, September 1 and
December 1 next preceding the Interest Payment Date, even if such Notes
are canceled after such record date and on or before such Interest Payment
Date, except as provided in Section 2.12 of the Indenture with respect to
defaulted interest.  The Notes will be
payable as to principal, premium, if any, and interest at the office or agency
of the Company maintained for such purpose within or without the City and State
of New York, or, at the option of the Company, payment of interest may be made
by check mailed to the Holders at their addresses set forth in the register of
Holders, and provided that payment by wire
transfer of immediately available funds will be required with respect to
principal of and interest, and premium, if any, on, all Global Notes and all
other Notes the Holders of which shall have provided wire transfer instructions
to the Company or the Paying Agent.  Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private
debts.  The Company reserves the right to
pay interest to Holders of Notes by check mailed to such Holders at their
registered addresses or by wire transfer to Holders of at least $5 million
aggregate principal amount of Notes.










 



3.             PAYING AGENT AND REGISTRAR.  Initially, U.S. Bank Trust National Association,
the Trustee under the Indenture, will act as Paying Agent and Registrar.  The Company may change any Paying Agent or
Registrar without notice to any Holder. 
The Company or any of its Subsidiaries may act in any such capacity.


4.             INDENTURE.  The Company issued the Notes under an
Indenture dated as of September 18, 2006 (the “Indenture”)
between the Company and the Trustee.  The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code §§ 77aaa-77bbbb).  The
Notes are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. 
To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and
be controlling.  The Notes are obligations
of the Company.  The Company is issuing
$500 million in aggregate principal amount on the Issue Date and may issue
Additional Notes in accordance with the terms of the Indenture.


5.             OPTIONAL REDEMPTION.  The Notes may not be redeemed prior to Maturity.


6.             MANDATORY REDEMPTION.


The Company shall not be required to make mandatory
redemption payments with respect to the Notes.


7.             DENOMINATIONS, TRANSFER,
EXCHANGE.  The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000.  The transfer of
Notes may be registered and Notes may be exchanged as provided in the
Indenture.  The Registrar and the Trustee
may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and the Company and the Trustee may require a Holder to
pay any taxes and fees required by law or permitted by the Indenture.  The Company need not exchange or register the
transfer of any Notes during the period between a record date and the corresponding
Interest Payment Date.


8.             PERSONS DEEMED OWNERS.  The registered Holder of a Note may be
treated as its owner for all purposes.


9.             AMENDMENT, SUPPLEMENT AND
WAIVER.  Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
written consent of the Holders of at least a majority in principal amount of
the then outstanding Notes voting as a single class, and any existing default
or compliance with any provision of the Indenture or the Notes may be waived with
the written consent of the Holders of a majority in principal amount of the
then outstanding Notes voting as a single class.  Without the consent of any Holder of a Note,
the Indenture or the Notes may be amended or supplemented to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes, to provide for the assumption of
the Company’s obligations to Holders of the Notes in case of a merger or
consolidation, to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect in any
material respects the rights under the Indenture of any such Holder, to comply
with the requirements of the SEC in order to










 



effect or maintain the qualification of the Indenture
under the Trust Indenture Act or to evidence and provide for the acceptance of
appointment under the Indenture of a successor Trustee.


10.           DEFAULTS AND REMEDIES.  Events of Default are set forth in the
Indenture.  If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable.  Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, all outstanding Notes will become due and payable
without further action or notice. 
Holders may not enforce the Indenture or the Notes except as provided in
the Indenture.  Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in writing in its exercise of any trust or
power.  The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of Default (except
a Default or Event of Default relating to the payment of principal or interest)
if it determines that withholding notice is in their interest.  The Holders of a majority in aggregate
principal amount of the Notes then outstanding by written notice to the Trustee
may on behalf of the Holders of all of the Notes waive any existing Default or
Event of Default and its consequences under the Indenture except a continuing
Default or Event of Default in the payment of interest on, or the principal of,
the Notes.  The Company is required to
deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.


11.           TRUSTEE DEALINGS WITH
COMPANY.  The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not the Trustee.


12.           NO RECOURSE AGAINST OTHERS.  A director, officer, employee, incorporator
or stockholder, of the Company, as such, shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their
creation.  Each Holder by accepting a
Note waives and releases all such liability. 
The waiver and release are part of the consideration for the issuance of
the Notes.


13.           AUTHENTICATION.  This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.


14.           ABBREVIATIONS.  Customary abbreviations may be used in the
name of a Holder or an assignee, such as: 
TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT
TEN (= joint tenants with right of survivorship and not as tenants in common),
CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).


15.           CUSIP NUMBERS.  Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of purchase as a convenience to Holders.  No representation is made as to the accuracy
of such numbers either as printed on the Notes or as contained in any notice of
purchase and reliance may be placed only on the other identification numbers
placed thereon.










 



16.           ADDITIONAL RIGHTS OF
HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED DEFINITIVE NOTES.  In addition to the rights provided to Holders
of Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the Registration Rights
Agreement dated as of September 18, 2006, between the Company and the parties
named on the signature pages thereof (the “Registration Rights Agreement”).










 



The Company will furnish to any Holder upon written
request and without charge a copy of the Indenture and/or the Registration
Rights Agreement.  Requests may be made
to:


iStar Financial Inc.


1114 Avenue of the Americas, 27th Floor


New York, NY  10036


Attention:  Investor Relations










 



ASSIGNMENT FORM


	
  To assign this Note, fill in
  the form below:

  	
   

  
	
   

  
	
  (I) or (we) assign and transfer this Note to:

  	
   

  
	
   

  	
  (Insert
  assignee’s legal name)

  
	
   

  
	
   

  
	
  (Insert
  assignee’s soc. sec. or tax I.D. no.)

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Print or type
  assignee’s name, address and zip code)

  
	
   

  
	
  and irrevocably appoint

  	
   

  	
   

  
	
  to transfer this Note on the books of the Company.
  The agent may substitute another to act for him.

  
	
   

  
	
  Date: 

  	
   

  	
   

  	
   

  
	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name appears on

  the face of this Note)

  
	
   

  
	
   

  
	
  Signature Guarantee*: 

  	
   

  	
   

  
										



 






*                                         Participant
in a recognized Signature Guarantee Medallion Program (or other signature
guarantor acceptable to the Trustee).










 



SCHEDULE OF
EXCHANGES OF INTERESTS IN THE GLOBAL NOTE


The following exchanges of a part of this Global Note
for an interest in another Global Note or for a Definitive Note, or exchanges
of a part of another Global Note or Definitive Note for an interest in this
Global Note, have been made:


	
  Date of Exchange

  	
   

  	
  Amount of

  decrease in

  Principal Amount 

  of this Global Note

  	
   

  	
  Amount of

  increase in

  Principal Amount 

  of this Global Note

  	
   

  	
  Principal Amount

  of this Global Note

  following such

  decrease

  (or increase)

  	
   

  	
  Signature of

  authorized officer

  of Trustee or Note

  Custodian