Commercial mortgage REIT iStar Financial is reportedly close to violating some of its debt covenants and is trying to work out a restructuring with lenders, following a deterioration in the performance of many of the loans the REIT has made, The Wall Street Journal reported. David Fick, an analyst with Stifel Nicolaus, said iStar's balance sheet, once considered investment grade quality, "is now in shambles, and management is reduced to scrambling for cash."

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