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NewStar Financial Closes $7 Million Office Condominium Conversion Loan In Orlando

The Adler Group Bringing Office Condominiums to Crossroad Business Center

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Boston, MA - December 28, 2005 - NewStar Financial, Inc. ("NewStar"), a Boston-based commercial finance company, announces that it has provided a $7,000,000 non-recourse, first mortgage loan to facilitate the condominium conversion of Crossroad Business Center, a 78,000 square-foot office building in Winter Park, Florida.

The property is owned by the Adler Group, a third generation full service real estate company operating its 4 million square feet portfolio under the brand name, FlexxSpace. The Adler Group has been the owner of the property since 2001.

Crossroads is a single story, multi-tenant office property with a history of stable occupancy and cash flow. The Adler Group identified this asset for condominium conversion after receiving interest from several tenants who appreciated its prestigious Winter Park address, high-traffic location and single story layout. In NewStar, the Adler Group sought a lender who could underwrite the office condominium market and provide terms that would facilitate the conversion of their property while providing flexibility to allow for future development on surplus land.

According to Matthew Adler of the Adler Group, "NewStar has provided us with a custom-crafted loan that will allow us to deliver desirable office condominium product to the greater Orlando market, while also allowing us the opportunity to develop our property further."

The NewStar loan provides an initial funding to refinance existing debt and secondary fundings for capital improvements as part of the sales program. The facility was structured with a 24 month base term and one twelve-month extension option to allow ample time for the Adler Group to market the property to prospective purchasers. In addition, NewStar provided for partial lien releases on sold condominium units and on the undeveloped portion of the site.

Paul Stasaitis of HFF, LP acted as exclusive financial advisor to the borrower on the Crossroads loan. HFF, LP was selected to service the loan on behalf of NewStar. NewStar's deal team for this transaction included Jim Korinek, Gabriel Pozo and Joseph Turilli.

About NewStar Financial, Inc.:

NewStar Financial, Inc. was formed in June 2004 by a group of senior banking and capital markets executives from leading financial institutions, including FleetBoston Financial, Citigroup and JP Morgan Chase, and leading institutional investors including Capital Z Partners, JP Morgan Corsair Capital Partners and Och-Ziff Capital Management Group. NewStar is focused exclusively on providing customized financing solutions to mid-sized borrowers in three lending groups: Middle Market Corporate, Commercial Real Estate, and Structured Products. For more information, please contact the appropriate individual below.

Corporate Inquiries:
NewStar Financial
Scott Poirier
(617) 848-2525

Press-Related Inquiries:
Gaffney Bennett Public Relations
Chris Riley
(860) 690-0856

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