But a big increase in NPA...either the asset jumps from non-watch list to NPA directly (makes you wonder how smart they can construct the list) or a lot of asset from watch list went to NPA then new assets jump to the watch list. Either way, It doesn't seem to be that they have identified most of the problem assets.
I think it's fair to characterize the 40% NPLs and iStar's approach to them as tantamount to a distressed asset fund. Such a fund would acquire troubled assets. They wouldn't then say "Wow, I've got some troubled assets, I've got to dump them now for any price." They would work the assets for optimal recovery.
That's what iStar is doing. They could sell them at distressed current prices and offset losses with debt buys. They have chosen another route. It ain't for everyone.