Exhibit 99.1

NORTHSTAR REALTY FINANCE

ANNOUNCES FIRST QUARTER 2011 RESULTS

First Quarter Highlights

·                  AFFO per share of $0.26.

·                  $285 million available liquidity at March 31, 2011, including $193 million of unrestricted cash.

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

·                  Raised $172.5 million of unsecured corporate capital during the first quarter 2011.

·                  Repurchased $138 million par amount of NorthStar CDO bonds for $40 million, representing an average discount to par of 71%.

·                  Retired $36 million par amount of NorthStar’s 7.25% exchangeable notes due June 2012.

·                  Added to Standard and Poor’s Select Servicer list and assigned a CMBS special servicer rating by Fitch.

NEW YORK, NY, May 5, 2011 - NorthStar Realty Finance Corp. (NYSE: NRF) today announced its results for the quarter ended March 31, 2011.

First Quarter 2011 Results

NorthStar reported adjusted funds from operations (“AFFO”) for the first quarter 2011 of $0.26 per share compared with a loss of ($0.41) per share for the first quarter 2010.  AFFO for the first quarter 2011 was $21.4 million compared with a loss of ($33.9) million for the first quarter 2010.  Net loss to common stockholders for the first quarter 2011 was ($103.8) million, or ($1.33) per share, compared to a net loss of ($24.9) million, or ($0.33) per share for the first quarter 2010. First quarter 2011 net loss includes ($122.3) million of unrealized losses relating to non-cash mark-to-market adjustments, compared to a net gain of $19.5 million relating to non-cash mark-to-market adjustments for the first quarter 2010, principally caused by tightening credit spreads increasing the value of NorthStar’s liabilities during the first quarter 2011.  The non-cash mark-to-market gains and losses are excluded from AFFO.  Realized gains totaled $20.9 million for the first quarter 2011, compared with $1.4 million for the first quarter 2010.

At March 31, 2011, diluted GAAP book value per common share was $11.11. For a reconciliation of net income to AFFO and diluted book value per common share, please refer to the tables on the following pages.

David T. Hamamoto, chairman and chief executive officer, commented, “We are very pleased with the execution of our recent $172.5 million exchangeable notes offering and we have already successfully deployed a significant portion of the proceeds.  The offering allows us to very comfortably manage our only other recourse debt, while also allowing us to pursue compelling investment opportunities.  Year-to-date, we have invested $119 million, including repurchasing $207 million par amount of our CDO bonds at an average discount to par of 67%, and repurchasing $49 million par amount of our exchangeable notes. Additionally, we were recently selected as the winning bidder of the ‘B piece’ in a new approximately $2 billion CMBS securitization in which we intend to appoint NorthStar as the special servicer.”

Mr. Hamamoto continued, “We are also extremely pleased to announce the appointment of Debra Hess as our new Chief Financial Officer.  Debra’s 25 years of financial, accounting and compliance experience at public companies such as Goldman, Sachs & Co., Fortress Investment Group and Newcastle Investment Corp., including as a chief financial officer, will be a tremendous asset to our organization.”

Investment, Business and Fee Income Summary

During the first quarter 2011, NorthStar invested $40 million of unrestricted cash to repurchase $138 million par amount of its CDO bonds with an average original credit rating of AA-/Aa3, representing a 71% average discount to par.  As of March 31, 2011, NorthStar owned a total of $408 million of its own CDO bonds, which are eliminated on NorthStar’s consolidated balance sheet.  For additional details related to these CDO bonds, please refer to the tables on the following pages of this press

release.  During the first quarter 2011, NorthStar also retired $36 million par amount of its 7.25% exchangeable notes due in June 2012 for approximately $38 million.

During the first quarter 2011, NorthStar was designated as an approved special servicer on Standard and Poor’s Select Servicer list and was assigned a CMBS special servicer rating by Fitch, which provides NorthStar the ability to act as special servicer in CMBS securitizations rated by S&P and Fitch.  At March 31, 2011, NorthStar owned $2.8 billion face amount of CMBS comprising over 600 separate positions and will seek to appoint itself as special servicer in securitizations where it becomes the controlling class holder.

During the first quarter 2011, NorthStar sold a leasehold interest comprised of 17,665 square feet of retail space located in New York City for $7 million. Proceeds from the sale are held in an escrow account that is earmarked to repay the 11.5% exchangeable notes due in June 2013 (the “Escrow Account”).  As of March 31, 2011, the total cash in the Escrow Account was $10 million.

During the first quarter 2011, NorthStar received management fees from its CDOs totaling $4.8 million and special servicing fees of $0.2 million. These fees are eliminated on NorthStar’s statement of operations due to the consolidation of NorthStar’s CDOs. For more information regarding NorthStar’s CDO management fees, please refer to the tables on the following pages of this press release. In addition, during the first quarter 2011, NorthStar received $0.1 million of advisor fees from NorthStar’s sponsored non-traded REIT.

NorthStar had approximately $7.4 billion of assets under management at March 31, 2011 based on the par amount of loans and securities and purchase prices of owned real estate assets.

Liquidity, Financing and Capital Markets

Total available liquidity at March 31, 2011 was approximately $285 million, including $193 million of unrestricted cash and cash equivalents, and $92 million of uninvested and available cash in NorthStar’s CDO financings. At March 31, 2011, NorthStar’s only unrestricted cash needs relating to non-discretionary future funding obligations associated with existing loan commitments totaled approximately $2 million.

During the first quarter 2011, NorthStar issued $172.5 million of 7.50% exchangeable senior notes due 2031 (“Notes”). Prior to the maturity date (commencing in March 2016) and upon the occurrence of specified events, the Notes are exchangeable into cash, shares of NorthStar’s common stock or a combination of cash and shares, at NorthStar’s option, at an initial exchange price of $6.44 per share. Please see NorthStar’s Current Report on Form 8-K filed on March 9, 2011 for a more complete description of the Notes.

During the first quarter 2011, NorthStar Real Estate Income Trust, a non-listed REIT sponsored by NorthStar, raised $9.3 million with executed selling agreements with broker-dealers covering an average of approximately 2,700 registered representatives for the quarter.  NorthStar sponsored non-listed REITs have raised a total of $40 million at March 31, 2011. NRF Capital Markets LLC, NorthStar’s wholly-owned broker-dealer subsidiary, currently has executed selling agreements with broker-dealers covering more than 12,000 registered representatives and is in the due diligence phase with firms covering more than 20,000 registered representatives. There is no assurance that NRF Capital Markets, LLC will execute selling agreements with all or any of the broker-dealers that are currently conducting due diligence.

Risk Management

At March 31, 2011, exclusive of the CapitalSource CDO (“CSE CDO”), NorthStar had two loans on non-performing status (“NPL”) having a $41 million aggregate outstanding principal balance and a $2 million book value, compared to four loans representing $65 million aggregate principal balance and $26 million book value, as of December 31, 2010.  In addition, at March 31, 2011, the CSE CDO had seven loans on NPL status having a $158 million aggregate outstanding principal balance and a $10 million book value, compared to nine loans representing a $193 million aggregate outstanding principal balance and a $24 million book value as of December 31, 2010. NorthStar designates a loan as non-performing at such time as the loan becomes 90 days delinquent on contractual debt service payments or the loan has a maturity default.

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During the first quarter 2011, NorthStar recorded $24.5 million of loan loss provisions relating to eight loans. As of March 31, 2011, loan loss reserves totaled $188 million, or 11% of total NorthStar loans (exclusive of CSE CDO loans), related to 18 loans having a book value of $241 million.

As of March 31, 2011, NorthStar’s net lease portfolio was 89% leased with a 6.4-year weighted average remaining lease term.  For more information regarding the net lease assets (exclusive of healthcare net leased real estate), please refer to the tables on the following pages of this press release.

Albert Tylis, co-president and chief operating officer, commented, “Looking ahead, we intend to remain disciplined in our investment approach and management of our portfolio. At the same time, we will continue to be opportunistic and seek to capitalize on investment opportunities, both within our own $7.4 billion portfolio and where we may be uniquely positioned to utilize our broad and sophisticated investment platform.”

Stockholder’s Equity

At March 31, 2011, NorthStar had 82,695,078 total common shares and operating partnership units outstanding, and $30 million of non-controlling interest relating to its operating partnership. Book value per diluted common share was $11.11 at March 31, 2011. Exclusive of all unrealized mark-to-market adjustments, loan loss reserves, and accumulated depreciation and amortization, book value at March 31, 2011 would be $8.32 per diluted common share. For a calculation of book value per diluted common share, please refer to the tables on the following pages of this press release.

Subsequent Events

In April 2011, NorthStar completed the sale of a portfolio of healthcare net lease assisted living facilities for $101.5 million. The buyer assumed $73.5 million of mortgage debt secured by the assets in the portfolio.

In April 2011, NorthStar invested $29 million of unrestricted cash to purchase $68 million par amount of its CDO bonds, representing an average discount to par of 58%.  As of April 30, 2011, NorthStar owned a total of $477 million of its own CDO bonds.  Additionally, following the end of the first quarter 2011, NorthStar retired $8.5 million par amount of its 7.25% exchangeable notes and $4.0 million par amount of its 11.5% exchangeable notes, resulting in an outstanding principal balance of $23 million and $47 million (net of $10 million held in the Escrow Account) of its 7.25% exchangeable notes due in 2012 and its 11.5% exchangeable notes due in 2013, respectively.

In April 2011, NorthStar was selected as the winning bidder of the “B-piece” in a new approximately $2 billion CMBS securitization. NorthStar anticipates appointing itself as special servicer of the securitization. NorthStar expects the transaction to close in the second quarter of 2011 and expects to utilize approximately $7 million of unrestricted cash and $20 of restricted cash in its CDO financings as part of the transaction.

On May 4, 2011, NorthStar announced that its Board of Directors declared a dividend of $0.10 per share of common stock, payable with respect to the quarter ended March 31, 2011.  The dividend will be paid on May 25, 2011 to shareholders of record as of the close of business on May 18, 2011.

Earnings Conference Call

NorthStar will hold a conference call to discuss first quarter 2011 financial results on Thursday May 5, 2011, at 11:00 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 Lisa Meyer, chief accounting officer.  The Company will post on its website, www.nrfc.com, a March 31, 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 877-941-0843 or for international callers, by dialing 480-629-9643.

A replay of the call will be available one hour after the call through Thursday May 12, 2011 by dialing 800-406-7325 or 303-590-3030 for international callers, using pass code 4433541.

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About NorthStar Realty Finance Corp.

NorthStar Realty Finance Corp. is a finance REIT that primarily originates and invests in commercial real estate debt, real estate securities and net lease properties.  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 per share amounts)

(1) The three months ended March 31, 2011 and 2010 include $2,034 and $5,058 of equity-based compensation expense, respectively.  The three months ended March 31, 2010 includes $3,583 of cash compensation expense and $1,014 of equity based compensation expense relating to a separation and consulting agreement with a former executive.

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NorthStar Realty Finance Corp.

Consolidated Balance Sheets

($ in thousands)

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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.

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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).

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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Balance Sheet Holdings of NorthStar CDO Bonds (1)

at March 31, 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 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.

Management Fees From NorthStar CDO Financings at March 31, 2011

($ in thousands)

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

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

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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 March 31, 2011.

(3) As of April 2011, N-Star V’s overcollateralization cushion is negative.

(4) As of March 31, 2011, $7 million is held in escrow pending resolution of certain assets.

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

Assets Under Management at March 31, 2011

($ in thousands)

(1) Includes $249 million of junior participations in first mortgages.

(2) Net lease amounts prior to accumulated depreciation and impact of purchase price allocations.

(3) Includes $208 million of investments primarily related to equity investments, joint ventures and real estate owned assets.

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NorthStar CDO Investment Summary

($ in thousands)

Credit Ratings Distribution of Securities Under Management

($ in thousands)

CMBS Vintages Under Management

($ in thousands)

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Book Value Rollforward

($ in thousands, except per share data)

(1) Relates primarily to amortization of LTIP shares and issuance of common shares from DRIP and DSPP.

Per share dilution as a result of common shares issued.

(2) Cumulative net mark-to-market adjustments total a positive $573.5 million ($6.93 per diluted share), credit loss reserves total a negative $188.6 million ($2.28 per diluted share) and accumulated real estate depreciation and amortization total a negative $154.3 million ($1.86 per diluted share) as of March 31, 2011. Excluding all mark-to-market adjustments, loan loss reserves, and accumulated depreciation and amortization would result in a $8.32 diluted book value per common share at March 31, 2011.

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NRFC NNN Holdings, LLC Portfolio Summary

($ in thousands)

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Portfolio Cash Flow and Tenant Credit Profile

($ in thousands)