Colony Financial Inc : Colony Financial, Inc. Announces Public Offering of Common Stock

Colony Financial, Inc. (the "Company") (NYSE:CLNY) today announced it plans to commence a public offering of 5,000,000 shares of common stock. The Company also plans to grant to the underwriters an option to purchase up to an additional 750,000 shares. The Company intends to use at least $45.0 million of the net proceeds from the offering to make an additional investment in CSFR Operating Partnership, L.P. ("CSFR OP"), an investment vehicle created for the purpose of investing in single-family rental homes in which the Company has an associate general partner interest. Operations are managed by Colony American Homes, LLC, an affiliate of Colony Financial Manager, LLC. The Company expects CSFR OP to use the proceeds contributed to it for the purpose of investing in additional single-family homes. The Company intends to use any additional net proceeds to acquire assets in a manner consistent with its investment strategies and investment guidelines, for working capital and general corporate purposes.

Morgan Stanley and BofA Merrill Lynch will act as joint book-running managers for this offering. The underwriters may offer the shares at prevailing market prices or otherwise from time to time through the New York Stock Exchange, in the over-the-counter market, through negotiated transactions or otherwise.

The offering of the shares will be made under the Company's shelf registration statement, which was filed with and declared effective by the Securities and Exchange Commission. The offering will be made only by means of a prospectus supplement and prospectus, which will be filed with the Securities and Exchange Commission. A copy of the prospectus supplement and prospectus related to the offering can be obtained, when available, by contacting Morgan Stanley, Attention: Prospectus Dept., 180 Varick Street, 2nd Floor, New York, New York 10014 or by email at [e-mail], or BofA Merrill Lynch, Attention: Prospectus Department, 222 Broadway, New York, New York 10038 or by email at [e-mail].

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of any 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.

About Colony Financial, Inc.

Colony Financial, Inc. is a real estate finance and investment company that is focused on acquiring, originating and managing a diversified portfolio of real estate-related debt and equity investments, including single family homes to be rented to tenants, at attractive risk-adjusted returns. Our investment portfolio and target assets are primarily composed of interests in: (i) secondary loans acquired at a discount to par; (ii) new originations; and (iii) equity in CSFR OP, which owns and operates single family homes to be held for investment and rented to tenants. Secondary debt purchases may include performing, sub-performing or non-performing loans (including loan-to-own strategies). The Company has elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes. The Company is a component of the Russell 2000® and the Russell 3000® indices.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," or "potential" or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond the Company's control, that may cause actual results to differ significantly from those expressed in any forward-looking statement.

All forward-looking statements reflect the Company's good faith beliefs, assumptions and expectations, but they are not guarantees of future performance. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause the Company's future results to differ materially from any forward-looking statements, see the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2011 filed with the Securities and Exchange Commission on March 9, 2012, the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 filed with the SEC on May 8, 2012, the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 filed with the SEC on August 9, 2012, the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 filed with the SEC on November 9, 2012, and other risks described in documents subsequently filed by the Company from time to time with the SEC.

Investor Contact:
Colony Financial, Inc.
Darren Tangen
Chief Operating Officer &
Chief Financial Officer
[phone]
or
Addo Communications, Inc.
Lasse Glassen, [phone]
[e-mail]
or
Media Contact:
Owen Blicksilver P.R., Inc.
Caroline Luz, [phone]
[e-mail]