iStar Financial (SFI) narrowed its third-quarter loss, but still saw lower interest income hurt results. The commercial real estate lender reported a loss of $83.5 million, or 89 cents a share, for the three months ended Sept. 30. For the year-ago quarter, iStar lost $251.3 million, or $2.55 a share. The company reported an adjusted loss for the third quarter, excluding items, of $70.9 million, or 76 cents a share. Revenue for the three months ended Sept. 30 fell 24.5% to $134.4 million from $178.2 million a year earlier, hindered by a smaller asset base due to loan repayments and sales, as well as lower interest income. Loans that moved to nonperforming status and lower gains from the early extinguishment of debt pushed interest income for the quarter down to $59.3 million from $166.9 million a year ago. The company said third-quarter loan loss provisions fell to $78.4 million from $109.4 million a year earlier. For the nine months, iStar has earned $138.2 million, or $1.10 a share, up from a loss of $615.5 million, or $6.21 a share, through September last year. Revenue for the nine months decreased nearly 27% to $438.1 million from $598.1 million. The company plans to repay a $1 billion line of credit due June 2012 next week to further reduce leverage. iStar Financial ended the third quarter with total assets of $10.46 billion with $1.12 billion of unrestricted cash. Write to Jason Philyaw.