Fitch Ratings has revised the rating outlook to negative for iStar Financial Inc., which provides structured financing and corporate leasing of commercial real estate, while affirming the company's triple-B Issuer Default Rating. The rating agency cited iStar's acquisition of Fremont General Corp.'s CRE lending business as a concern. "Although the loans acquired by [iStar] are first mortgages, the acquisition structure of the Fremont transaction places [iStar] effectively in the first-loss position," Fitch said. "In addition, the majority of the portfolio consists of condominium construction loans. Fitch is concerned that the continued slowdown in the single-family residential mortgage market, which drives the purchase of condominium units, may impact the timing and amount of ultimate repayment of loans made to many [iStar] borrowers." In addition to affirming iStar's IDR, Fitch also affirmed the New York-based company's debt and preferred stock ratings.

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