The subsidiary of a Texas-based real estate investment trust (REIT) is seeking bankruptcy protection.
Houston-based Silver Star Properties REIT Inc. (Silver Star Properties) announced that Hartman SPE LLC, a subsidiary with offices and retail properties in Dallas, has filed for voluntary Chapter 11 protection, The Dallas Morning News reported.
“The filing will allow [Hartman] SPE to conduct an orderly sale of its assets to pay its undisputed creditors in full, complete the refinance of its maturing senior indebtedness, and maximize capital available for Silver Star’s redeployment into the self-storage asset class,” a bankruptcy statement read, per DMN.
The bankruptcy filing follows the firm’s recent sale of its Prestonwood property, which sold for $25 million and will reportedly be used “to improve its ability to sell its remaining legacy assets,” the DIWire reports.
Hartman SPE LLC, strapped with more than $200 million in loan debt, has been selling off Dallas-area properties to restructure its debts and refocus the company into a self-storage firm.
The company had approximately $131 million in office and retail buildings under contract for sale going into the Bankruptcy. According to Silver Star Properties, the remaining $131 million under contract is expected to close in an amount sufficient to reach the $200 million loan balance.
Despite the bankruptcy filing, Silver Star Executive Committee Chairman Gerald Haddock said he is motivated about the new direction of the company.
“We are pleased with our progress toward our goals of moving the company into self-storage,” Haddock said in a statement, per DMN.
Silver Star Properties owns many high-profile properties across North Texas. Some of these high-profile holdings include North Central Plaza and Gateway Tower in North Dallas, the Skylark Tower in Arlington, and the Richardson Heights shopping center in Richardson, among others.
Silver Star owned a total of 44 commercial properties in the Dallas, Houston, and San Antonio metros at the start of 2023. These holdings spanned nearly 7 million square feet, DMN reported.