Silver Star Properties REIT Investigation 2025

Silver Star Properties REIT: Cuts 90% of Workforce in 2025

Have you suffered investment losses in Silver Star Properties REIT?  The White Law Group continues to investigate potential securities fraud claims involving broker dealers who may have improperly recommended Silver Star Properties REI (formerly Hartman REIT) to investors. The following is a review of the timeline of events that may be of interest to investors.

March 10th, 2025: Silver Star Properties REIT Inc., formerly Hartman Short Term Income Properties XX Inc., has announced on March 10th workforce reductions and payroll cuts as part of a “strategic turnaround plan”. The Houston-based company is reportedly shifting its investment focus from office, retail, and light industrial properties to the self-storage sector. This transition is expected to yield over $15 million in annual cost savings and strengthen financial stability.

The restructuring has reportedly reduced Silver Star’s workforce from 190 employees in 2022 to just 22 full-time employees.  The company anticipates that lower overhead costs and a more focused portfolio will support future acquisitions, debt reduction, and improved profitability.

REIT Fails to Meet Benchmarks

December 2024: In a related development, Charles Schwab ceased custodianship of Silver Star shares in December 2024 due to the REIT’s failure to meet reporting benchmarks. The company claims delays were related to legal challenges involving former CEO and an SEC investigation, which has since concluded without further action. Silver Star reportedly expects lingering issues with Hartman to continue into 2025.

Silver Star Properties REIT, Inc. Reports 25% Drop in NAV per Share

June 2024: Silver Star announced that its board of directors determined an estimated NAV per share of $2.01 as of June 30, 2024.  This marks a decline in NAV from $2.70 as of December 31, 2023. Shares were originally sold for $10 per share.

Silver Star Properties Fails to File Quarterly Report

Silver Star Properties reported that it was unable to file its quarterly report for the quarter ending June 30, 2024, due to the resignation of the REIT’s independent registered public accounting firm. Silver Star’s most recent quarterly report was filed in November 2023, for the quarter ending September 30, 2023.

Subsidiary Emerges from Chapter 11

February 2024:  Silver Star Properties REIT has secured funds to help its legacy real estate portfolio under subsidiary Hartman SPE emerge from Chapter 11 bankruptcy protection. The company has reportedly secured $135 million from two New York lenders to help it emerge from bankruptcy and finalize the transition into the self-storage sector.

On September 13, 2023, Hartman SPE filed for Chapter 11 bankruptcy, resulting in its exclusion from the company’s financial statements. Despite legal hurdles, Hartman SPE remains operational with plans to restructure and sell assets to meet its obligations and settle debts. As of September 30, 2023, the company holds three income-generating properties, while Hartman SPE possesses 35 properties.

SEC Indicates  Subpoena for Silver Star Properties REIT (Hartman REIT)

February 2nd, 2024: Silver Star Properties REIT Inc. disclosed that the Securities and Exchange Commission (SEC) has initiated a formal investigation into the company. The SEC’s Fort Worth, Texas, regional office indicated it intends to issue a subpoena requesting specific documents soon. 

In its recent filing disclosing the formal SEC investigation, Silver Star stated that it could not speculate on the actions that it or the SEC might take in response to the subpoena. 

Silver Star Properties Responds to Documents Request 

November 2023: The non-traded REIT, formerly known as Hartman Short Term Income Properties XX, Inc., responded to requests from the SEC in November 2023, concerning the activities of the REIT, its affiliates, and current and former officers and directors.  

According to an 8-K filing on November 28, 2023, the company noted “On June 6, 2023, the SEC’s Fort Worth Regional Office sent a letter to the Company with a “document hold” request, and on June 21, 2023, a representative of the Regional Office requested that the Company voluntarily provide certain documents and information regarding certain of the Company’s, its affiliates’ and current and former officers’ and directors’ activities and corresponding disclosures. The Company has cooperated with the SEC’s Regional Office in connection with the SEC Matter.  

As a result of that conversation, and out of an abundance of caution, the Company is proceeding as if the SEC Matter is now an active investigation.” 

Silver Star Shifts from Office Properties 

Silver Star Properties REIT previously announced its decision to shift away from investing in office properties due to challenges such as post-pandemic occupancy, valuation, and financing issues stemming from increased remote working.

The company stated in a news release on February 5th that the sale of existing office holdings has allowed it to reduce existing debt, improve its balance sheet, and position itself for acquisitions of self-storage facilities in target markets. 

Silver Star Properties Secondary Sales Price

According to Lodas Markets, a secondary market for non-traded investments, on March 10th, shares of Silver Star Properties are reportedly trading for just $0.42 per share. The original offering price was $10, and the company currently values the shares at $2.01 per share.

According to Lodas, the Texas-based commercial real estate firm was initially focused on office, retail, and industrial properties, but transitioned to self-storage assets as of April 6, 2023. Its primary operations are conducted through Hartman XX Limited Partnership and its subsidiary Hartman SPE LLC.

Hartman Challenges Rights Agreement 

According to an 8-K Filing on February 5, 2024, Silver Star Properties REIT issued a press release addressing two filings in the Circuit Court for Baltimore City, Maryland dated January 30, 2024, Allen Hartman and Hartman vREIT XXI, Inc. “have asserted legal challenges to Silver Star Properties REIT, Inc.” 

The claims involve the company’s “previously disclosed Rights Agreement, dated August 18, 2023, and seek declaratory and injunctive relief that would prevent the Rights Agreement from operating in accordance with its terms.” 

Silver Star Properties notes that “it believes Hartman’s claims are meritless and intends to vigorously defend itself against them.” 

Notification of Late Filing with the SEC  

According to a Notification of Late Filing with the SEC in November 2023, Silver Star Properties REIT could not file its Form 10-Q for the quarter ended September 30, 2023, within the designated timeframe due to “significant difficulty and expense.” 

This delay is reportedly the result of Hartman SPE, LLC, a subsidiary of Silver Star Properties, filing for Chapter 11 bankruptcy on September 13, 2023. This action has led to the deconsolidation of Hartman SPE from the company’s financial statements, causing delays in completing and reviewing the financial statements and disclosures required for the Form 10-Q. 

Class Action Lawsuit vs. Individual FINRA Arbitration Lawsuit 

People often wonder whether a large class action lawsuit is a better litigation option for them than an individual FINRA arbitration case.  The answer depends on many factors, but typically if the loss sustained is large (say larger than $100,000), an individual arbitration claim is likely a better option.  Class action lawsuits as a recovery option are more appropriate for grouping large numbers of individuals who have small claims – too small to generally pursue individually. 

Free Consultation with a Securities Attorney 

This information is all publicly available and provided to you by The White Law Group. 

For a free consultation with a securities attorney, please contact The White Law Group at 888-637-5510. Our national securities fraud, securities arbitration, and investor protection attorneys are ready to assist you in understanding your rights and potential courses of action.  

The White Law Group is dedicated to protecting investors’ interests and help those who may have suffered investment losses with their broker or financial advisor. Our firm is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington.