Silver Star REIT Eliminates Nearly 90% of Workforce in Operations Restructuring

Silver Star Properties REIT Inc., a publicly registered non-traded real estate investment trust formerly known as Hartman Short Term Income Properties XX Inc., recently announced workforce reductions and payroll cuts as part of a “comprehensive strategic turnaround plan.” The company said its actions, which include an anticipated shift in its investment focus to self-storage facilities, are aimed at strengthening Silver Star’s long-term value creation strategy. By restructuring its operations, Silver Star expects to realize over $15 million in annual cost savings and enhance its financial stability going forward.

Headquartered in Houston, Texas, Silver Star said it is pivoting away from its legacy holdings in office, retail, and light industrial properties, and redeploying resources into the growing self-storage sector which has shown resilient demand and stable cash flows. Silver Star’s leadership said the shift offers stronger growth prospects and better long-term returns for investors. The company said it emphasizes Silver Star’s “commitment to a sustainable, forward-looking business model centered on high-demand real estate segments.”

In affiliated organization restructuring, Silver Star has streamlined its workforce from 190 employees in 2022 to 22 full-time employees today, a reduction designed to align the company’s cost structure with a more focused real estate portfolio. This leaner team reflects the elimination of roles that had been essential for managing the company’s former office, retail, and industrial assets, which are no longer core to the business. The workforce reduction and payroll optimizations are expected to deliver over $15 million in annual savings in operating expenses.

Silver Star’s leadership team believes that these difficult changes were implemented carefully to preserve critical capabilities while improving efficiency. The company said it remains focused on maintaining effective operations with a smaller, agile staff and will leverage third-party partnerships or outsourcing as needed to support its self-storage investments.

“These have been challenging but necessary decisions for Silver Star. By streamlining our organization and pivoting ourselves to self-storage, we have significantly strengthened our foundation for sustainable future growth. We are now a leaner company with a clear focus on our most promising investments, and I am confident that this proactive turnaround will translate into improved performance and enhanced value for our shareholders,” said Gerald Haddock, chief executive officer of Silver Star.

“Our commitment to our investors and stakeholders is unwavering – we are positioning Silver Star to thrive in the long run, and we believe the steps we have taken set the stage for a dynamic and successful future,” Haddock added.

Looking ahead, Silver Star said it is optimistic that its strategic restructuring will position the company for future success. With a healthier balance sheet, substantially lower overhead, and a concentrated portfolio of self-storage and single-tenant assets, it said it “is better equipped to capitalize on new acquisition opportunities and changing market conditions. Management notes that the $15+ million reduction in annual expenses will free up resources to reinvest in growth initiatives and debt reduction, thereby improving profitability and cash flow.”

According to the Silver Star, it will continue to communicate transparently with shareholders as it executes on this turnaround plan.

Per previous reporting by AltsWire, Charles Schwab stopped acting as custodian for Silver Star shares held within 401k and IRA accounts in Dec. 2, 2024. Schwab attributed this decision to Silver Star’s failure to meet specific reporting benchmarks. The REIT cited previous legal hurdles, including “erroneous and improper” Lis Pendens actions filed by Allen R. Hartman, its former chief executive officer, and a subsequent U.S. Securities and Exchange Commission investigation, as contributing factors to the reporting delays. The REIT stated that it had emerged from its bankruptcy proceeding, and the SEC has concluded its investigation without further action.

This REIT had previously stated that it does not expect the issues with Hartman to be fully resolved until 2025.