REIT In Chapter 11 Bankruptcy Sells 7-Building Houston Office Portfolio
An Atlanta-based investor bought an office campus known as The Preserve at North Loop from Silver Star CRE, a subsidiary of Silver Star Properties REIT, according to Marcus & Millichap.
The Class-B office campus in Northwest Houston was 65% occupied at the time of sale. It was originally built in 1970 and totals 219K SF throughout seven buildings at 2000-2060 N. Loop W.
Houston-based Silver Star Properties filed for Chapter 11 bankruptcy protection in late May with the aim of reorganizing its obligations and preserving “tangible and intangible assets.” It had $75M in liabilities, $100M in assets and four loans in default at the time.
The REIT previously filed for Chapter 11 bankruptcy in September 2023, shortly after it launched a repositioning strategy to sell off legacy office assets and pivot to self-storage. The Preserve was one of 29 office properties the REIT had as of December 2022. The property, which it acquired in October 2018, was 92% occupied at the time.
The buyer of The Preserve at North Loop plans to renovate and modernize the campus while continuing operations, according to the press release. Marcus & Millchap’s Keith Lloyd and Brad Mills marketed the property on behalf of Silver Star CRE and procured the buyer.
“This acquisition gives the buyer immediate cash flow while providing the flexibility to modernize the property and benefit from the site's long-term redevelopment potential,” Lloyd said in a statement.
Silver Star, formerly known as Hartman Short Term Properties XX, was led by founder Allen Hartman until October 2022. It has since been involved in public back-and-forth, proxy contests and legal battles, many involving Hartman.
Silver Star Properties hasn’t filed an annual financial report with the Securities and Exchange Commission since 2023, according to a search of its records. The SEC was reportedly investigating the REIT in early 2024.
