Exhibit 99.1

NORTHSTAR REALTY FINANCE

ANNOUNCES SECOND QUARTER 2011 RESULTS

Second Quarter 2011 Highlights

·                  AFFO per diluted share of $0.61.

·                  $191 million of unrestricted cash and $102 million of availability in CDOs at June 30, 2011.

·                  Declared second quarter 2011 cash dividend of $0.10 per common share.

·                  Repurchased $86 million par amount of NorthStar CDO bonds for $31 million, average 64% discount to par.

NEW YORK, NY, August 4, 2011 - NorthStar Realty Finance Corp. (NYSE: NRF) today announced its results for the quarter ended June 30, 2011.

Second Quarter 2011 Results

NorthStar reported adjusted funds from operations (“AFFO”) for the second quarter 2011 of $0.61 per diluted share compared with $0.41 per diluted share for the second quarter 2010.

Net loss to common stockholders for the second quarter 2011 was $(52.0) million, or $(0.60) per diluted share, compared to net income of $32.0 million, or $0.42 per diluted share for the second quarter 2010.  Second quarter 2011 net loss includes $(104.2) million of unrealized losses relating to non-cash fair value adjustments, compared to a net gain of $10.2 million for the second quarter 2010.  These non-cash fair value gains and losses are excluded from AFFO.  Realized gains totaled $36.8 million for the second quarter 2011, compared with $81.5 million for the second quarter 2010.

At June 30, 2011, GAAP book value per diluted share was $9.26.  For a reconciliation of net income (loss) to AFFO and GAAP book value per diluted share, please refer to the tables on the following pages.

David T. Hamamoto, chairman and chief executive officer, commented, “Since the beginning of 2011, NorthStar has raised $232 million of corporate capital, which has enabled us to pursue a variety of opportunistic investments that we believe will provide accretive risk adjusted returns.  Through June 30th, we have invested approximately $150 million and subsequent to June 30th, we have closed and/or are working on an incremental $250 million of new investments (including availability in CDOs) which we expect will generate excess cash flow to NorthStar, including having signed a contract to acquire a CRE CDO from CapLease.”

Investments and Fee Income

During the second quarter 2011, NorthStar invested $70 million of unrestricted cash as follows:

·                  $31 million to repurchase $86 million par amount of its CDO bonds with an average original credit rating of A/A2, representing a 64% average discount to par.  As of June 30, 2011, NorthStar owned a total of $495 million of its own CDO bonds, which are eliminated on its consolidated balance sheet.

·                  $11 million unrestricted cash and $15 million of restricted cash to acquire the “B-piece” in a $2.1 billion new issue CMBS transaction.  In addition, NorthStar was approved as special servicer for the CMBS transaction.

·                  $13 million to retire corporate debt, including $9 million par amount of 7.25% exchangeable notes and $4 million par amount of 11.5% exchangeable notes.

·                  $15 million for a new mezzanine loan origination at a 15% fixed rate, secured by a portfolio of six Class-A office buildings located in the suburbs of Philadelphia, PA.

NorthStar had approximately $7.3 billion of assets under management at June 30, 2011.

During the second quarter 2011, NorthStar received management fees from its consolidated CDOs of $4.4 million and special servicing fees of $0.8 million.  These fees are eliminated on NorthStar’s consolidated statement of operations.  In addition, during the second quarter 2011, NorthStar received $0.2 million of advisor fees from NorthStar’s sponsored non-listed REIT.

In July, NorthStar received a $14 million equity distribution from the CapitalSource CDO (“CSE CDO”), including $7 million that was held in an escrow account pending resolution of certain assets.

For additional details regarding our investments and fee income, please refer to the tables on the following pages.

Liquidity, Financing and Capital Markets

Total liquidity at June 30, 2011 included $191 million of unrestricted cash and $102 million of available cash for re-investment in NorthStar’s CDOs.  At June 30, 2011, NorthStar’s only unrestricted cash needs related to non-discretionary future funding obligations associated with existing loan commitments were approximately $4 million.

On May 17, 2011, NorthStar completed the sale of 17.25 million shares of its common stock at a price of $4.25 per share, which includes the full over-allotment option exercised by the underwriters of the offering.  The net proceeds to NorthStar were approximately $69 million.

NorthStar Real Estate Income Trust (“NSREIT”), a non-listed REIT sponsored by NorthStar, raised $18 million in the second quarter 2011.  NSREIT has raised $27 million in 2011 and $57 million since inception through June 30, 2011.  NRF Capital Markets LLC, NorthStar’s wholly-owned broker-dealer subsidiary, executed selling agreements covering more than 30,000 registered representatives during the second quarter 2011, bringing our total signed selling agreements with broker-dealers to more than 40,000 registered representatives.

NorthStar’s only near-term corporate obligations relate to its exchangeable senior notes, of which $23 million principal amount of 7.25% notes are payable in June 2012 at the holders’ option and $47 million of 11.5% notes (net of $10 million held in an escrow account) are due in June 2013.

Risk Management

At June 30, 2011, excluding the CSE CDO, NorthStar had two loans on non-performing status (“NPL”), representing $41 million in aggregate principal amount and a $2 million book value.  This amount is unchanged from March 31, 2011.  In addition, at June 30, 2011, the CSE CDO had one loan on NPL status, representing $1 million in principal amount.  This compares to seven loans as of March 31, 2011, representing $158 million in aggregate principal amount and a $10 million book value.  NorthStar categorizes a loan as non-performing if it is in maturity default and/or is past due 90 days on its contractual debt service payments.

During the second quarter 2011, NorthStar recorded $14 million of loan loss provisions relating to four loans, compared to $25 million of loan loss provisions related to eight loans recorded during the first quarter 2011.  As of June 30, 2011, loan loss provisions totaled $182 million, or 7% of total loans, related to 20 loans with a book value of $280 million.

As of June 30, 2011, NorthStar’s net lease portfolio was 97% leased with a 6.4 year weighted average remaining lease term.

Stockholders’ Equity

At June 30, 2011, NorthStar had 100,223,066 total common shares and operating partnership units outstanding, and $29 million of non-controlling interest relating to its operating partnership.  GAAP book value per diluted share was $9.26 at June 30, 2011.  Exclusive of all unrealized fair value adjustments, loan loss provisions, and accumulated depreciation and amortization, adjusted book value at June 30, 2011 would be $7.35 per diluted share.  For a calculation of adjusted book value per diluted share, please refer to the tables on the following pages.

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Common Dividend Announcement

On August 3, 2011, NorthStar announced that its Board of Directors declared a cash dividend of $0.10 per share of common stock, payable with respect to the quarter ended June 30, 2011.  The dividend is expected to be paid on August 19, 2011 to shareholders of record as of the close of business on August 15, 2011. The Company’s common shares will begin trading ex-dividend on August 11, 2011.

Earnings Conference Call

NorthStar will hold a conference call to discuss second quarter 2011 financial results on Thursday August 4, 2011, at 10:00 a.m. Eastern time.  Hosting the call will be David Hamamoto, chairman and chief executive officer; Albert Tylis, co-president and chief operating officer; Daniel Gilbert, co-president and chief investment officer; and Debra Hess, chief financial officer.  The Company will post on its website, www.nrfc.com, a June 30, 2011 update to its corporate presentation.

The call will be webcast live over the Internet from NorthStar’s website, www.nrfc.com, and will be archived on the Company’s website.  The call can also be accessed live over the phone by dialing 800-762-8795, or for international callers, by dialing 480-629-9724.

A replay of the call will be available one hour after the call through Thursday August 11, 2011 by dialing 800-406-7325 or 303-590-3030 for international callers, using pass code 4459199.

About NorthStar Realty Finance Corp.

NorthStar Realty Finance Corp. is a finance REIT that primarily originates, acquires and manages portfolios of commercial real estate debt, real estate securities and net lease properties.  In addition, we engage in asset management and other activities related to real estate and real estate finance.  For more information about NorthStar Realty Finance Corp., please visit www.nrfc.com.

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NorthStar Realty Finance Corp.

Consolidated Statements of Operations

($ in thousands, except share and per share data)

(1) The three months ended June 30, 2011 and 2010 include $2,613 and $4,181 of equity-based compensation expense, respectively. The six months ended June 30, 2011 and 2010 include $4,647 and $9,239 of equity-based compensation expense, respectively.

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NorthStar Realty Finance Corp.

Consolidated Balance Sheets

($ in thousands, except share data)

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Non-GAAP Financial Measures

Included in this press release are certain “non-GAAP financial measures,” which are measures of NorthStar’s historical or future financial performance that are different from measures calculated and presented in accordance with accounting principles generally accepted in the United States, or U.S. GAAP, within the meaning of applicable SEC rules.  These include: Funds From Operations and Adjusted Funds From Operations.  The following discussion defines these terms, which NorthStar believes can be useful measures of its performance.

Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO)

Management believes that funds from operations, or FFO, and adjusted funds from operations, or AFFO, each of which are non-GAAP measures, are additional appropriate measures of the operating performance of a REIT and NorthStar in particular. We compute FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (NAREIT), as net income or loss (computed in accordance with GAAP), excluding gains or losses from sales of depreciable properties, the cumulative effect of changes in accounting principles, real estate-related depreciation and amortization, and after adjustments for unconsolidated/uncombined partnerships and joint ventures.  FFO, as defined by NAREIT, is a computation made by analysts and investors to measure a real estate company’s cash flow generated by operations.

NorthStar calculates AFFO by subtracting from or adding to FFO:

·                  normalized recurring expenditures that are capitalized by NorthStar and then amortized, but which are necessary to maintain NorthStar’s properties and revenue stream, e.g., leasing commissions and tenant improvement allowances;

·                  an adjustment to reverse the effects of the straight-lining of rents and fair value lease revenue;

·                  the amortization or accrual of various deferred costs including intangible assets and equity-based compensation;

·                  an adjustment to reverse the effects of acquisition gains or losses; and

·                  an adjustment to reverse the effects of non-cash unrealized gains (losses).

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NorthStar’s calculation of AFFO differs from the methodology used for calculating AFFO by certain other REITs and, accordingly, our AFFO may not be comparable to AFFO reported by other REITs.

Neither FFO nor AFFO is equivalent to net income or cash generated from operating activities determined in accordance with U.S. GAAP.  Furthermore, FFO and AFFO do not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties.  Neither FFO nor AFFO should be considered as an alternative to net income as an indicator of NorthStar’s operating performance or as an alternative to cash flow from operating activities as a measure of NorthStar’s liquidity.

NorthStar urges investors to carefully review the GAAP financial information included as part of the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and quarterly earnings releases.

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Assets Under Management at June 30, 2011 (1)

($ in thousands)

(1) Based on principal amount of CRE debt, CRE securities and equity investments and the purchase price of operating real estate.

(2) Includes $242 million of junior participations in first mortgage loans.

(3) Includes $475 million related to equity investments, joint ventures and operating real estate.

Balance Sheet Holdings of NorthStar CDO Bonds (1)

at June 30, 2011

($ in thousands)

(1)                    Unencumbered CDO bonds are owned by NorthStar. These CDO bonds are eliminated with the liability of the respective CDO issuer on NorthStar’s consolidated financial statements. Therefore, the acquisition of these CDO bonds results in a reduction of debt and associated interest expense, as opposed to an additional asset and associated interest income.

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Management Fees From NorthStar CDO Financings at June 30, 2011

($ in thousands)

(1) Subordinate management fees not received for the second quarter.

(2) Includes advancing agent fees received during the second quarter 2011.

NorthStar CDO Financings Cash Distributions and Coverage Test Summary

($ in thousands)

Table shows cash distributions to the retained income notes.  Interest coverage and overcollateralization coverage to the most constrained class.

(1) Cash distributions are exclusive of senior management fees which are not subject to the coverage tests.

(2) Quarterly interest cushion and overcollateralization cushions from remittance report issued on date nearest to June 30, 2011.

(3) In July, NorthStar received a cash distribution totaling $14 million, including a $7 million accrued distribution.

(4) Based on trustee report as of June 24, 2010 which was closest to the date of acquisition.

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NorthStar CDO Investment Activity Summary

($ in thousands)

Credit Ratings Distribution of Real Estate Securities Under Management

($ in thousands)

CMBS Vintages Under Management

($ in thousands)

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GAAP Book Value Rollforward

($ in thousands, except per share data)

(1)          Excludes dividends paid on shares raised in common stock offering completed in May 2011.

(2)          Includes $69 million of net proceeds from common stock offering completed in May 2011, net of common dividends associated with these shares paid during the quarter.  Additional amounts relate to amortization of LTIP shares and issuance of common shares from the Dividend Reinvestment and Stock Purchase Plan.

(3)          Cumulative net fair value adjustments total a positive $514.0 million ($5.13 per diluted share), credit loss reserves total a negative $181.8 million ($1.82 per diluted share) and accumulated depreciation and amortization total a negative $140.2 million ($1.40 per diluted share) as of June 30, 2011. Excluding all fair value adjustments, loan loss provisions, and accumulated depreciation and amortization would result in a $7.35 adjusted book value per diluted share at June 30, 2011.

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NRFC NNN Holdings, LLC Portfolio Summary

($ in thousands)