SEC Form 4

FORM 4		UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940	OMB APPROVAL OMB Number: 3235-0287 Estimated average burden hours per response: 0.5
	Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person* FARALLON PARTNERS L L C/CA (Last) (First) (Middle) C/O FARALLON CAPITAL MANAGEMENT, L.L.C. ONE MARITIME PLAZA, SUITE 1325 (Street) SAN FRANCISCO CA 94111 (City) (State) (Zip)	2. Issuer Name and Ticker or Trading Symbol CAPITALSOURCE INC [ CSE ]	5. Relationship of Reporting Person(s) to Issuer (Check all applicable) Director X 10% Owner Officer (give title below) X Other (specify below) Member of Group Owning 10%
	3. Date of Earliest Transaction (Month/Day/Year) 03/10/2006
	4. If Amendment, Date of Original Filed (Month/Day/Year)	6. Individual or Joint/Group Filing (Check Applicable Line) Form filed by One Reporting Person X Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
			Code	V	Amount	(A) or (D)	Price
Common Stock, par value $0.01 per share	03/10/2006		P		138,500	A	$23.5	8,618,174	D(1)(2)(3)(4)(5)
Common Stock, par value $0.01 per share								892,962	D(1)(2)(3)(4)(6)
Common Stock, par value $0.01 per share	03/10/2006		P		52,900	A	$23.5	382,394	D(1)(2)(3)(4)(7)
Common Stock, par value $0.01 per share								9,208	D(1)(2)(3)(4)(8)
Common Stock, par value $0.01 per share								15,309	D(1)(2)(3)(4)(9)
Common Stock, par value $0.01 per share								9,208	D(1)(2)(3)(4)(10)
Common Stock, par value $0.01 per share	03/10/2006		P		231,700	A	$23.5	320,230	D(1)(2)(3)(4)(11)
Common Stock, par value $0.01 per share								10,247,485	I	See Footnotes(1)(2)(3)(4)(12)(13)
Common Stock, par value $0.01 per share								16,353,614	D(1)(2)(3)(4)(14)
Common Stock, par value $0.01 per share								16,353,614	I	See Footnotes(1)(2)(3)(4)(15)
Common Stock, par value $0.01 per share	03/10/2006		P		576,900	A	$23.5	17,485,551	I	See Footnotes(1)(2)(3)(4)(16)
Common Stock, par value $0.01 per share								27,733,036	I	See Footnotes(1)(2)(3)(4)(17)(18)(19)

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
				Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares

1. Name and Address of Reporting Person* FARALLON PARTNERS L L C/CA (Last) (First) (Middle) C/O FARALLON CAPITAL MANAGEMENT, L.L.C. ONE MARITIME PLAZA, SUITE 1325 (Street) SAN FRANCISCO CA 94111 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) X Other (specify below) Member of Group Owning 10%

1. Name and Address of Reporting Person* FARALLON CAPITAL PARTNERS LP (Last) (First) (Middle) C/O FARALLON CAPITAL MANAGEMENT, L.L.C. ONE MARITIME PLAZA, SUITE 1325 (Street) SAN FRANCISCO CA 94111 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) X Other (specify below) Member of Group Owning 10%

1. Name and Address of Reporting Person* FARALLON CAPITAL INSTITUTIONAL PARTNERS L P (Last) (First) (Middle) C/O FARALLON CAPITAL MANAGEMENT, L.L.C. ONE MARITIME PLAZA, SUITE 1325 (Street) SAN FRANCISCO CA 94111 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) X Other (specify below) Member of Group Owning 10%

1. Name and Address of Reporting Person* MILLHAM STEPHEN L (Last) (First) (Middle) C/O FARALLON CAPITAL MANAGEMENT, L.L.C. ONE MARITIME PLAZA, SUITE 1325 (Street) SAN FRANCISCO CA 94111 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) X Other (specify below) Member of Group Owning 10%

1. Name and Address of Reporting Person* Moment Jason E (Last) (First) (Middle) C/O FARALLON CAPITAL MANAGEMENT, L.L.C. ONE MARITIME PLAZA, SUITE 1325 (Street) SAN FRANCISCO CA 94111 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) X Other (specify below) Member of Group Owning 10%

1. Name and Address of Reporting Person* PATEL RAJIV A (Last) (First) (Middle) C/O FARALLON CAPITAL MANAGEMENT, L.L.C. ONE MARITIME PLAZA, SUITE 1325 (Street) SAN FRANCISCO CA 94111 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) X Other (specify below) Member of Group Owning 10%

1. Name and Address of Reporting Person* SCHRIER DEREK C (Last) (First) (Middle) C/O FARALLON CAPITAL MANAGEMENT, L.L.C. ONE MARITIME PLAZA, SUITE 1325 (Street) SAN FRANCISCO CA 94111 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) X Other (specify below) Member of Group Owning 10%

1. Name and Address of Reporting Person* STEYER THOMAS F (Last) (First) (Middle) C/O FARALLON CAPITAL MANAGEMENT, L.L.C. ONE MARITIME PLAZA, SUITE 1325 (Street) SAN FRANCISCO CA 94111 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer X Director X 10% Owner Officer (give title below) X Other (specify below) Member of Group Owning 10%

1. Name and Address of Reporting Person* WEHRLY MARK C (Last) (First) (Middle) C/O FARALLON CAPITAL MANAGEMENT, L.L.C. ONE MARITIME PLAZA, SUITE 1325 (Street) SAN FRANCISCO CA 94111 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) X Other (specify below) Member of Group Owning 10%

Explanation of Responses:

1. The aggregate amount of Shares of common stock of the Issuer (the "Shares") reported on this Form 4 is 27,733,036, of which 26,601,099 Shares are owned directly in aggregate by the Farallon Funds (as defined in footnote (12) of this Form 4) and 1,131,937 Shares are owned directly by a discretionary account (the "Managed Account") managed by Farallon Capital Management, L.L.C. ("FCMLLC"). Farallon Partners, L.L.C. ("FPLLC") is the general partner of 7 of the 8 Farallon Funds. FCMLLC is the manager of the general partner of the eighth Farallon Fund. The footnotes of this Form 4 set forth the ownerships of these securities, as well as the other entities and individuals that may be deemed to beneficially own such securities, and explain the relationships between such entities and individuals.

2. The entities and individuals identified in the footnotes of this Form 4 may be deemed members of a group holding equity securities of the Issuer. The filing of this Form 4 and any statements included herein shall not be deemed to be an admission that such entities and individuals are members of such group. Since the number of reporting persons that may be listed on a Form 4 is limited, the entity listed in footnote (11) of this Form 4, FCMLLC, Chun R. Ding, William F. Duhamel, Charles E. Ellwein, Andrew B. Fremder, Richard B. Fried, Monica R. Landry and William F. Mellin, each as listed in footnote (17) or footnote (18) of this Form 4, are filing a separate Form 4 on the same date as the filing of this Form 4 as reporting persons with respect to the securities described in this Form 4 (the "Parallel Form 4").

3. Although certain of the entities and individuals identified in footnote (2) of this Form 4 above are not reporting persons, information regarding them is included on this Form 4 for purposes of clarification and convenience only. Such information is duplicative of the information reported by them in the Parallel Form 4.

4. The securities reported on this Form 4 include an aggregate of 2,636,390 Shares received by the reporting persons on or about January 25, 2006 as part of the special dividend declared by the Issuer and paid to all of its holders of record of Shares on November 23, 2005. The receipt of Shares pursuant to such dividend was exempt from Section 16 of the Securities Exchange Act of 1934, as amended, pursuant to Rule 16a-9 thereunder.

5. The amount of securities shown in this row was purchased and is owned directly by Farallon Capital Partners, L.P. ("FCP").

6. The amount of securities shown in this row is owned directly by RR Capital Partners, L.P. ("RR").

7. The amount of securities shown in this row was purchased and is owned directly by Farallon Capital Institutional Partners, L.P. ("FCIP").

8. The amount of securities shown in this row is owned directly by Farallon Capital Institutional Partners II, L.P. ("FCIP II").

9. The amount of securities shown in this row is owned directly by Farallon Capital Institutional Partners III, L.P. ("FCIP III").

10. The amount of securities shown in this row is owned directly by Tinicum Partners, L.P. ("Tinicum").

11. The amount of securities shown in this row was purchased and is owned directly by Farallon Capital Offshore Investors II, L.P. ("FCOI II").

12. The amount of securities shown in this row is owned directly by the following entities: 8,618,174 Shares by FCP, 892,962 Shares by RR, 382,394 Shares by FCIP, 9,208 Shares by FCIP II, 15,309 Shares by FCIP III, 9,208 Shares by Tinicum and 320,230 Shares by FCOI II (together with FCSLP (as defined below), the "Farallon Funds") as set forth in footnotes (5) through (11) of this Form 4.

13. As the general partner of each of the Farallon Funds other than FCSLP (as defined below), FPLLC may be deemed to be the beneficial owner of the Issuer's securities held by each of the Farallon Funds other than FCSLP. FPLLC disclaims any beneficial ownership of any of the Issuer's securities reported herein for purposes of Rule 16a-1(a) under the Securities Exchange Act of 1934, as amended, or otherwise, except as to securities representing FPLLC's proportionate interest in each of the Farallon Funds other than FCSLP.

14. The amount of securities shown in this row is owned directly by Farallon CS Institutional Finance II, L.P. ("FCSLP").

15. The amount of securities shown in this row is owned directly by FCSLP. As the general partner to FCSLP, Farallon CS Institutional Finance, L.L.C. ("FCSLLC") may be deemed to be the beneficial owner of the Issuer's securities held by FCSLP. FCSLLC disclaims any beneficial ownership of any of the Issuer's securities reported herein for purposes of Rule 16a-1(a) under the Securities Exchange Act of 1934, as amended, or otherwise, except as to securities representing FCSLLC's proportionate interest in FCSLP.

16. The 576,900 Shares shown in column 4 were purchased and are owned directly by the Managed Account. Of the total amount of securities shown in column 5, 16,353,614 Shares are owned directly by FCSLP and 1,131,937 Shares are owned directly by the Managed Account. As the manager to FCSLLC (the general partner to FCSLP) and the Managed Account, FCMLLC may be deemed to be the beneficial owner of the Issuer's securities beneficially owned by FCSLLC and the Issuer's securities directly owned by the Managed Account. FCMLLC disclaims any beneficial ownership of any of the Issuer's securities reported herein for purposes of Rule 16a-1(a) under the Securities Exchange Act of 1934, as amended, or otherwise.

17. The amount of securities shown in this row is owned directly by the Farallon Funds and the Managed Account. Each of Chun R. Ding, William F. Duhamel, Charles E. Ellwein, Richard B. Fried, Monica R. Landry, William F. Mellin, Stephen L. Millham, Jason E. Moment, Rajiv A. Patel, Derek C. Schrier and Mark C. Wehrly (collectively, the "Managing Members"), as a managing member of FPLLC and FCMLLC, and Thomas F. Steyer ("Steyer"), Senior Managing Member of FPLLC and FCMLLC, may be deemed to be a beneficial owner of the Issuer's securities held by the Farallon Funds and the Managed Account as referenced in Footnote (1) of this Form 4.

18. Pursuant to Limited Powers of Attorney, dated as of February 1, 2003, Andrew B. Fremder ("Fremder") was granted limited powers of attorney to act for each of FCMLLC and FPLLC with regard to the Issuer's securities directly held by the Partnerships. Such powers of attorney may only be exercised by Fremder jointly with any of the Managing Members or Steyer. As a result of such restriction, Fremder does not by himself have the power to vote, or direct the voting of, the Issuer's securities directly held by the Farallon Funds. Rather, Fremder Shares such power with the Managing Members and Steyer. Pursuant to such powers of attorney, Fremder may be deemed to be a beneficial owner of the Issuer's securities held by the Farallon Funds and the Managed Account as referenced in Footnote (1) of this Form 4.

19. The Managing Members, Steyer and Fremder disclaim any beneficial ownership of any of the Issuer's securities reported herein for purposes of Rule 16(a)-1(a) under the Securities Exchange Act of 1934, as amended, or otherwise.

	/s/ Monica R. Landry as attorney-in-fact and/or authorized signer for each of the reporting persons listed in footnotes (5), (7) and (13).	03/14/2006
	/s/ Monica R. Landry as attorney-in-fact and/or authorized signer for each of Stephen L. Millham, Jason E. Moment, Rajiv A. Patel, Derek C. Schrier, Thomas F. Steyer and Mark C. Wehrly.	03/14/2006
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	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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