Sale Of Light Farms Further Increases Forestar's Financial Flexibility

Forestar Group Inc. (NYSE: FOR) today announced that Forestar/RPG Land Company LLC, a consolidated venture, sold approximately 800 acres near Dallas, Texas (Light Farms real estate project) for $56 million in total consideration. The property was sold to an affiliate of the Republic Property Group.

As a result of this transaction, Forestar received $25 million in cash proceeds, reduced consolidated debt by $31 million, and generated an estimated gain on sale of $3 million. In addition, the sale eliminates over $2 million in annual cash carrying costs.

In making the announcement, Jim DeCosmo, president and chief executive officer of Forestar, said, “We are focused on recognizing and responsibly generating the greatest value from every acre and achieving our Triple in FOR strategic initiatives. The sale of the Light Farms property reflects our commitments to accelerate value realization, further strengthen our balance sheet, increase financial flexibility and position us to take advantage of growth and investment opportunities.”

About Forestar Group

Forestar Group Inc. operates in three business segments: real estate, mineral resources and fiber resources. At year-end 2011, the real estate segment owns directly or through ventures almost 147,000 acres of real estate located in nine states and twelve markets in the U.S. The real estate segment has 16 real estate projects representing almost 27,600 acres currently in the entitlement process, and 75 entitled, developed and under development projects in seven states and eleven markets encompassing over 16,400 acres, comprised of approximately 27,100 residential lots and over 2,400 commercial acres. The mineral resources segment manages about 595,000 net acres of oil and gas mineral interests located principally in Texas, Louisiana, Alabama, and Georgia. Also included in the mineral resources segment is a 45% nonparticipating royalty interest in groundwater produced or withdrawn for commercial purposes from approximately 1.4 million acres in Texas, Louisiana, Georgia and Alabama and about 17,800 acres of groundwater leases in central Texas. The fiber resources segment includes the sale of wood fiber and management of our recreational leases. Forestar’s address on the World Wide Web is www.forestargroup.com.

Forward-looking Statements

This release contains “forward-looking statements” within the meaning of the federal securities laws. These statements reflect management’s current views with respect to future events and are subject to risk and uncertainties. We note that a variety of factors and uncertainties could cause our actual results to differ significantly from the results discussed in the forward-looking statements. Factors and uncertainties that might cause such differences include, but are not limited to: general economic, market, or business conditions; the opportunities (or lack thereof) that may be presented to us and that we may pursue; fluctuations in costs and expenses including development costs; demand for new housing, including impacts from mortgage credit availability; lengthy and uncertain entitlement processes; cyclicality of our businesses; accuracy of accounting assumptions; competitive actions by other companies; changes in laws or regulations; and other factors, many of which are beyond our control. Except as required by law, we expressly disclaim any obligation to publicly revise any forward-looking statements contained in this news release to reflect the occurrence of events after the date of this news release.

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