Silver Star Overcomes Litigation Hurdle, Continues Pivot Toward Self-Storage and Single-Tenant Assets
Silver Star Properties REIT, a publicly registered non-traded real estate investment trust formerly known as Hartman Short Term Income Properties XX Inc., announced its latest update in the ongoing litigation between Silver Star and its former chief executive officer, Allen R. Hartman.
According to Silver Star, the Circuit Court for Baltimore City signed an order denying Hartman and Hartman vREIT XXI, Inc.’s motion for partial summary judgment, which sought to liquidate Silver Star. Gerald Haddock, executive chairman of Silver Star’s executive committee and current CEO, stated, “We are pleased with the court’s ruling and will continue our progress towards our goals of moving the company into self-storage and single-tenant real estate assets and making distributions to our shareholders much quicker, all of which have been hindered by the dissident shareholder’s interference.”
Additionally, the company announced that it will continue to conduct an orderly transition of its legacy assets to maximize capital available for redeployment into self-storage and single-tenant real estate assets. As part of its pivot strategy, Silver Star recently completed the sale of the Richardson Heights Shopping Center located in Richardson, Texas, for $40.5 million. The approximate 200,000-square-foot shopping center was sold to an unrelated third party.
Silver Star stated that it has 20 remaining legacy assets, which it intends to sell as soon as possible. Once sold, Silver Star estimates that it will have approximately $350 million in self-storage and single-tenant real estate assets, with an estimated loan-to-value ratio of approximately 65%.
In a parallel move, the company completed the acquisition of 16 triple-net properties leased by Walgreens for $60.25 million, which was 100% financed.
“We believe these properties are being advantageously acquired in a strategic fashion to help with continuing as rapidly as possible the disposition of our legacy assets and our new conversion to other asset classes,” said Haddock.
As of July 1, 2024, Silver Star has completed the acquisition of three self-storage properties at a combined cost of $40.75 million, comprising 1,668 units within approximately 161,000 square feet.
This flurry of activity is just the latest in what has been an eventful time for Silver Star, including Chapter 11 bankruptcy, which it exited in April; and the ongoing battle between the company and Hartman. 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, claiming that Silver Star’s board had gone “rogue” and was putting its shareholders’ capital at risk. Silver Star has stated that it does not expect the issues with Hartman to be fully resolved until 2025.
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