The year-over-year decline in revenues from the $412.3 million produced in Q1 2008 was due mainly to a reduction of interest income resulting from an increase in non-performing loans and lower interest rates, the company says in a release. At the end of March, iStar had $3.9 billion of NPLs on its books, or about 32.6% of its total loan portfolio, compared to 27.5% of its portfolio at the end of '08. All told, iStar has $16.3 billion of assets under management.

Discussing the financial results, CFO James Burns said on Thursday's call that iStar's asset management is "focused on resolving each NPL as quickly as possible." Sugarman said that in some cases NPLs may be resolved through foreclosure and selling assets, while in other instances restructuring may be the solution. Net investment income for Q1 of this year rose to $252 million year-over-year from $176.8 million in Q1 '08, due primarily to gains on the early extinguishment of debt, although this was offset by the NPLs, the release states.

Sugarman said his company hopes to make progress on reducing its size and leverage by year's end. According to financial filings, its leverage ratio decreased from 3.1x at the end of Q4 '08 to 2.9x at the end of this year's first quarter. He expressed long-term optimism about the market recovering eventually, although he said the capital markets "missed the period in which the ounce of prevention was possible. We're now into the pound of cure."