Colony Financial, Inc. Announces Closing of Initial Public Offering Stock

LOS ANGELES - (BUSINESS WIRE) - Colony Financial, Inc. (NYSE: CLNY) (the "Company"), a newly formed real estate finance company focused on acquiring, originating and managing commercial mortgage loans, announced today the closing of its initial public offering of 12,500,000 shares of common stock, which priced at $20.00 per share on September 23, 2009.

Total gross proceeds from both the public offering and the concurrent private placement were $255 million, of which $250 million was from the public offering of common stock, and $5 million was from a private placement investment by certain of the Company’s executive officers and certain officers of Colony Capital, LLC and its affiliates. Colony Capital, LLC is a privately held independent global real estate investment firm.

The Company intends to use the proceeds from the offerings to acquire and originate commercial mortgage loans, which may be performing, sub-performing or non-performing loans (including loan-to-own strategies), other commercial real estate-related debt investments, commercial mortgage-backed securities, or CMBS, real estate owned, or REO, properties and other real estate and real estate-related assets.

BofA Merrill Lynch, Goldman, Sachs & Co., Morgan Stanley and UBS Investment Bank were the joint book-running managers for the offering. Calyon Securities (USA) Inc., HSBC, JMP Securities, Keefe, Bruyette & Woods and RBC Capital Markets acted as co-managers.

A copy of the final prospectus related to the offering was filed with the Securities and Exchange Commission and can be obtained by contacting Merrill Lynch, Pierce, Fenner & Smith Incorporated, Attention: Prospectus Department, 4 World Financial Center, New York, New York 10080; Goldman, Sachs & Co., Attention: Prospectus Department, 85 Broad St., New York, NY 10004 or by calling 1-866-471-2526; Morgan Stanley, Attention: Prospectus Department, 180 Varick Street, New York, New York 10014, or by calling 1-866-718-1649; or UBS Investment Bank, Attention: Prospectus Department, 299 Park Avenue, New York, NY 10171, or by calling 1-888-827-7275.

A registration statement relating to these securities has been declared effective by the Securities and Exchange Commission. This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. The offering is being made solely by means of a prospectus.

The Company is a newly formed real estate finance company that will focus primarily on acquiring, originating and managing commercial mortgage loans, which may be performing, sub-performing or non-performing loans (including loan-to-own strategies), other commercial real estate-related debt investments, CMBS, REO properties and other real estate-related assets. The Company intends to elect and qualify to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with the taxable year ending December 31, 2009.