Colony Financial Closes Private Placement

Colony Financial Announces Close Of Common Stock Private Placement

Colony Financial, Inc. (NYSE: CLNY) (the “Company”) 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 Company’s most recently reported book value of $18.94 per share at September 30, 2010 and the Company’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.

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.

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.

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.

About PPM

PPM is the leading U.S. entrepreneurial firm that specializes in writing private placement memorandums (PPM) and linking investors with entrepreneurs.

Since 1999, the founders of PPM have provided professional business writing services, such as a PPM or business plan, to more than 2,000 businesses worldwide. Our company is considered to be the most cost effective, efficient consultants for private placement memorandum development in the United States. We are Wall Street’s, and by extension, the New York private placement (PPM) leaders.

PPM’s main service is the creation of private placement memorandum regulation d (Reg. d) documents. However, we offer much more. In case the entrepreneur needs additional services, such as a business plan, website, or additional legal work, PPM can create one pricing package for all required documentation or service. Because we simultaneously work with many companies both in and out of the U.S., the ability to adapt to the individual needs – as well as to regional and global demands – helps our clients save needed capital and time.

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