Edgar Filing: Forestar Real Estate Group Inc.

Ownership Submission

FORM 4

Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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(Print or Type Responses)

1. Name and Address of Reporting Person ^*

Knight Craig A

2. Issuer Name and Ticker or Trading Symbol
Forestar Real Estate Group Inc. [FOR]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

_____ Director	_____ 10% Owner
__X__ Officer (give title below)	_____ Other (specify below)
Chief Investment Officer

(Last)

(First)

(Middle)

1300 SOUTH MOPAC EXPRESSWAY 3-SOUTH

3. Date of Earliest Transaction (Month/Day/Year)
09/24/2008

(Street)

AUSTIN, TX 78746

4. If Amendment, Date 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

(City)

(State)

(Zip)

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)
1.Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock	09/24/2008	09/24/2008	P		2,000	A	$ 15.89 ⁽¹⁾	21,232 ⁽²⁾	D
Common Stock								1,763 ⁽³⁾	I	By Trustee 401(k) Plan ⁽³⁾

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
	Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.		SEC 1474 (9-02)

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 Underlying Securities
(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 of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)

11. Nature of Indirect Beneficial Ownership
(Instr. 4)

Code

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

Option (right to buy) ⁽⁴⁾ ⁽⁵⁾

$ 13.24

02/04/2001

02/04/2010

Common Stock

3,333

Option (right to buy) ⁽⁵⁾ ⁽⁶⁾

$ 11.76

02/02/2002

02/02/2011

Common Stock

833

Option (right to buy) ⁽⁵⁾ ⁽⁷⁾

$ 13.26

02/01/2003

02/01/2012

Common Stock

1,666

Option (right to buy) ⁽⁵⁾ ⁽⁸⁾

$ 8.68

02/07/2004

02/07/2013

Common Stock

2,500

Option (right to buy) ⁽⁵⁾ ⁽⁹⁾

$ 15.02

02/06/2005

02/06/2014

Common Stock

1,666

Option (right to buy) ⁽⁵⁾ ⁽¹⁰⁾

$ 20.26

02/04/2006

02/04/2015

Common Stock

1,666

Option (right to buy) ⁽⁵⁾ ⁽¹¹⁾

$ 27.06

02/03/2007

02/03/2016

Common Stock

3,333

Option (right to buy) ⁽⁵⁾ ⁽¹²⁾

$ 30.56

02/02/2008

02/02/2017

Common Stock

3,333

Option (right to buy) ⁽¹³⁾

$ 28.85

02/12/2009

02/12/2018

Common Stock

66,500

Restricted ⁽⁵⁾ ⁽¹⁴⁾

⁽¹⁵⁾

Common Stock

4,166

Restricted ⁽⁵⁾ ⁽¹⁴⁾

⁽¹⁴⁾

Common Stock

4,333

Reporting Owners

Reporting Owner Name / Address	Relationships
Reporting Owner Name / Address	Director	10% Owner	Officer	Other
Knight Craig A 1300 SOUTH MOPAC EXPRESSWAY 3-SOUTH AUSTIN, TX 78746			Chief Investment Officer

Signatures

David M. Grimm signing on behalf of Craig A. Knight		09/25/2008
^**Signature of Reporting Person		Date

Explanation of Responses:

*	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).
(1)	The price reported is a weighted average purchase price. The purchase price ranged from $15.51 to $16.00. Reporting Person provided Issuer full information regarding the number of shares purchased at each separate price. Issuer will provide, upon receipt of a request, a copy of this information to the SEC staff or a security holder of the issuer.
(2)	In accordance with the Rights Agreement adopted by the Company on December 11, 2007, Preferred Stock Purchase Rights are deemed to be attached to the shares of Common Stock.
(3)	Reporting Person acquired shares through acquisitions under 401(k) plan. By trustee of the Temple-Inland Salaried Savings Plan according to the latest report of the Plan Administrator. (Note: Trustee uses unit accounting; therefore, share equivalents may fluctuate slightly from month to month.)
(4)	Options Vesting Schedule - Exercise price is $13.24: Options Exercisable 02/04/2003- 3,333.
(5)	Shares acquired in a pro rata distribution by Temple-Inland Inc. through a spin-off on or around December 28, 2007.
(6)	Options Vesting Schedule - Exercise price is $11.76: Options Exercisable 02/02/2004- 833.
(7)	Options Vesting Schedule - Exercise price is $13.26: Options Exerciserable 02/01/2005- 1,666.
(8)	Options Vesting Schedule - Exercise price is $8.68: Options Exercisable 02/07/2007 - 2,500.
(9)	Options Vesting Schedule - Exercise price of $15.02: Options Exercisable 02/06/2007 - 1,250; Options Exercisable 02/06/2008 - 416.
(10)	Options Vesting Schedule - Exercise price of $20.26: Options Exercisable 02/04/2007 - 833; Options Exercisable 02/04/2008 - 416; Options Exercisable 02/04/2009 - 416.
(11)	Options Vesting Schedule - Exercise price of $27.06: Options Exercisable 02/03/2007 - 833; Options Exercisable 02/03/2008 - 833; Options Exercisable 02/03/2009 - 833; and Options Exercisable 02/03/2010 - 833.
(12)	Options Vesting Schedule - Exercise price of $30.56: Options Exercisable 02/02/2008 - 833; Options Exercisable 02/02/2009 - 833; Options Exercisable 02/02/2010 - 833; and Options Exercisable 02/02/2011 - 833.
(13)	Options Vesting Schedule for Options Granted 02/12/2008 - Exercise price is $28.85: Options Exercisable 02/12/2009 - 16,625; Options Exercisable 02/12/2010 - 16,625; Options Exercisable 02/12/2011 - 16,625; Options Exercisable 02/12/2012 - 16,625.
(14)	Restricted Shares will vest effective 02/02/2010. Restricted Shares will be settled for cash based on the fair market value on the vesting date.
(15)	Restricted Shares will vest effective 02/03/2009. Restricted Shares will be settled for cash based on the fair market value on the vesting date.

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