Colony Financial, Inc. (the “Company”) (NYSE: CLNY) today announced it plans to commence a public offering of 10,000,000 shares of common stock. The Company also plans to grant to the underwriters an option to purchase up to an additional 1,500,000 shares. The Company intends to use at least $150 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 the offering, and FBR will act as lead manager 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 email@example.com, or BofA Merrill Lynch, Attention: Prospectus Department, 222 Broadway, New York, New York 10038 or by email at firstname.lastname@example.org. 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.