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Colony Financial Announces Close of Common Stock Private Placement

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^{Published in Business and Finance on Tuesday, December 21st 2010 at 6:01 GMT by Market Wire}  

LOS ANGELES--([ BUSINESS WIRE ])--Colony Financial, Inc. (NYSE: CLNY) (the aCompanya) announced today that it sold an aggregate of 2.75 million shares of common stock at a price of $20.25 per share to certain institutional investors in a private placement.The Company received net proceeds from the private placement of approximately $55.6 million, which it intends to use to repay its outstanding balances under its revolving lines of credit and for additional investment and other general corporate purposes. The private placement is accretive to the Companya™s most recently reported book value of $18.94 per share at September 30, 2010 and the Companya™s total outstanding share count is 17,384,000 following the transaction.

The institutional investors received certain limited pre-emptive rights and anti-dilution protection, and also received registration rights relating to the shares purchased in the private placement.

Thecommon stocksold pursuant to the offering described in this press release have not been registered under the Securities Act of 1933, as amended(the "Securities Act"),or any state securities laws, and may not be offered or sold in the United States absent registration under, or an applicable exemption from, the registration requirements of the Securities Act and applicable state securities laws. This press release shall not constitute an offer to sell or a solicitation of an offer to buy any securities described herein.

About Colony Financial, Inc.

Colony Financial, Inc. is a real estate finance and investment company that is focused primarily on acquiring and originating commercial real estate loans and real estate-related debt at attractive risk-adjusted returns. Secondary debt purchases may include performing, sub-performing or non-performing loans (including loan-to-own strategies). Colony Financial has elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes. Colony Financial is a component of the Russell 2000® and the Russell 3000® indices. For more information, visit[ www.colonyfinancial.com ].

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. Statements regarding the following subjects, among others, may be forward-looking: the ability to pay dividends in a timely manner or at all; the payment or amount of any special dividend; the use of proceeds of the Company's initial public offering; and the Company's ability to maintain its qualification as a REIT for U.S. federal income tax purposes.

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 final prospectus relating to the Company's initial public offering filed with the Securities and Exchange Commission on September 24, 2009, and other risks described in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission.