As Shareholder Meeting Looms, Silver Star REIT Reports Staffing, Performance Updates
As the court-ordered shareholder meeting approaches for Silver Star Properties REIT – a publicly registered non-traded real estate investment trust formerly known as Hartman Short Term Income Properties XX Inc. – and its former chief executive officer, Allen R. Hartman, in late June, the REIT continues to highlight staffing updates, action steps, and performance metrics associated with its pivot toward self-storage.
“As Silver Star advances with the momentum we have gained by shedding nonperforming assets and internalizing management, taking an opportunity with a disciplined approach for valuating our remaining legacy assets and the capital improvements they require for an ultimate decision to retain or sell,” stated Gerald W. Haddock, chairman and chief executive officer of Silver Star Properties REIT.
First, Alex Board announced his resignation as deputy chief financial officer and principal accounting officer, effective June 6, 2025. Board said his departure is not a result of any disagreement with Silver Star or its board of directors. Eric Tam, accounting manager, who joined the company in April 2022, will assume the position of controller.
Offering Launch and DST Distributions
Silver Star announced that it is partnering with Emerson Equity LLC to lead a $50 million preferred equity offering under Rule 506(c) of Regulation D. Proceeds will be used to acquire self-storage assets and drive the company toward a scalable, public-ready platform. According to the company, the offering will include an optional 721 roll-up into Silver Star operating partnership units for long-term alignment and tax efficiency.
The company’s subsidiary, Southern Star Self Storage, announced a one-time distribution of .25%, reflecting an annualized distribution of 3%, for the Southern Star Self Storage Airport DST and Southern Star Self Storage IV Rockport programs. This marked the second and first distributions for the Airport and Rockport DSTs, respectively, and exemplified what Silver Star called its “dedication to creating value for our investors as we advance turnaround efforts.”
Property Highlights and Metrics
The net operating income of a property in McKinney, Texas, increased from $21,035 in the first quarter of 2025 to $30,571 in Q2 2025, with occupancy rising from 64% to 77%.
Two additional Houston assets transitioned from third-party management this month. The company also said it is negotiating with a lender to assume full operational control of an asset in Delray, Fla. The latter asset as an occupancy of 92.5%.
“David Strickland, director of asset management, leveraged his long-standing vendor relationships, and secured timely and cost-effective commitments for critical repairs – many of which are already underway. He has also led the termination of underperforming third-party contracts and brought operations in-house, implementing a data-driven, community-focused strategy,” added Haddock.
Proxy Battle
For his part, Hartman has continued to accuse Haddock, of mismanagement and “destroying” Silver Star. He cited Silver Star’s sale of the Gulf Plaza property, claiming it was sold for $2.6 million, less than 20% of its previously estimated value of $17 million. Hartman asserted that if the Hartman Group were managing the company, the property would have sold for as much as $10 million. Hartman further warned that Silver Star’s leadership is “hereby being put on notice” and “may be held personally liable” for the $7.4 million loss in value.
Silver Star, however, responded, defending the sale and pushing back hard against Hartman’s allegations. According to Silver Star, Gulf Plaza’s poor condition was due to neglect during Hartman’s tenure as CEO and was directly attributable to Hartman’s management decisions, including the anchor tenant’s decision to move out “after a long period of frustration” with Hartman. Furthermore, the company stated that the property was sold as a broader effort to reduce high-interest debt following a Chapter 11 bankruptcy filing by one of the company’s subsidiaries in 2023. All in all, the company claimed that the sale actually represented an $11.7 million value gain when accounting for avoided negative cash flow and capital expenditure obligations.
The war between Silver Star and Hartman has been ongoing since at least March 2023, when Silver Star announced the removal of Hartman as executive chairman. Hartman, who remains a director and stockholder of Silver Star, initiated legal proceedings against Silver Star, alleging that, among other charges, the company breached Maryland law by not holding an annual stockholder meeting. Silver Star responded with a lawsuit of its own against Hartman in December 2023, accusing Hartman of mismanagement.
In January 2024, Silver Star’s executive committee alleged that Hartman was seeking “personal control” of the company. Hartman quickly responded with a shareholder address video, doubling down on his previous claims. In July 2024, Silver Star overcame a major litigation hurdle when the Circuit Court for Baltimore City signed an order denying Hartman’s motion for partial summary judgment, which sought to liquidate Silver Star. In September 2024, Silver Star continued to refute Hartman’s claims and defend the company’s shift toward self-storage. In March 2025, Silver Star eliminated nearly 90% of its workforce for operations restructuring in what it called a “comprehensive strategic turnaround plan” with self-storage investments.
In a mixed ruling in April, the Circuit Court for Baltimore, Md., agreed with Hartman in determining that the 10-year trigger date for liquidation occurred in 2023 and that Silver Star had failed to comply with its charter obligation to either list its shares or obtain stockholder approval to defer liquidation by that date.
The court, however, ruled against Hartman on other issues, including Silver Star’s “poison pill” plan, which the court stated was “enacted in good faith.” In the end, the court stopped short of ruling for immediate liquidation and instead ordered the June 30, 2025, shareholder meeting at 10 a.m., PT, which offers shareholders the choice of either supporting the company’s pivot into self-storage or voting for liquidation.
Shareholders of record as of June 1 are eligible to vote.
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