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* McCready Richard J (Last) (First) (Middle) C/O NORTHSTAR REALTY FINANCE CORP. 527 MADISON AVENUE, 16TH FLOOR (Street) NEW YORK NY 10022 (City) (State) (Zip)	2. Issuer Name and Ticker or Trading Symbol NORTHSTAR REALTY [ NRF ]	5. Relationship of Reporting Person(s) to Issuer (Check all applicable) Director 10% Owner X Officer (give title below) Other (specify below) General Counsel and Secretary
	3. Date of Earliest Transaction (Month/Day/Year) 10/28/2004
	4. If Amendment, Date of Original Filed (Month/Day/Year)	6. Individual or Joint/Group Filing (Check Applicable Line) X Form filed by One Reporting Person 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	10/28/2004		P		2,500	A	$8.6	2,500	D

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
LTIP Units(1)(2)	(1)(2)	10/29/2004		A		53,800(3)		(1)(2)(3)	(1)(2)(3)	Common Stock(1)(2)(3)	53,800	(3)	53,800	I	By NRF Employee, LLC(3)

Explanation of Responses:

1. Represents units of partnership interest which are structured as profits interests ("LTIP Units") in NorthStar Finance Realty Limited Partnership ("NRFLP"), a majority-owned subsidiary and the operating partnership of NorthStar Realty Finance Corp. (the "Company"). Conditioned upon minimum allocations to the capital accounts of the LTIP Units for federal income tax purposes, each LTIP Unit may be converted, at the election of the holder, into one common unit of partnership interest in NRFLP ("OP Units"). Continued in footnote (2) below.

2. The right of a holder to convert LTIP Units into OP Units does not have an expiration date. Each of the OP Units underlying these 53,800 LTIP Units are redeemable at the election of the holder of the OP Unit for: (1) cash equal to the then fair market value of one (1) share of common stock, par value $0.01 per share of the Company (the "Common Stock"), or (2) at the option of the Company in its capacity as the general partner of NRFLP, one (1) share of Common Stock. The right of a holder to redeem its OP Units does not have an expiration date.

3. These 53,800 LTIP Units were granted as long-term incentive compensation pursuant to the Company's 2004 Omnibus Stock Incentive Plan. On October 29, 2004, NRFLP issued a certain number of LTIP Units directly to NRF Employee, LLC (the "Employee LLC LTIP Units"). Mr. McCready has a membership interest in NRF Employee, LLC (the "McCready LLC Interest") which currently entitles him to beneficial ownership of 53,800 of the Employee LLC LTIP Units. The McCready LLC Interest vests quarterly over a three (3) year vesting period beginning October 29, 2004. Once a portion of the McCready LLC Interest is vested, Mr. McCready may redeem such vested portion for LTIP Units on a one-for-one basis. The right to redeem the McCready LLC Interest for LTIP Units does not have an expiration date. See footnotes (1) and (2) for the terms of the LTIP Units.

	/s/ Mark E. Chertok as Attorney-in-Fact for Richard J. McCready	11/01/2004
	** Signature of Reporting Person	Date
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