Silver Star Properties REIT Lawsuit Investigation: Bankruptcy, Defaults, and Investor Losses- Updated August 2026
Silver Star Properties REIT, formerly known as Hartman Short Term Income Properties XX Inc., remains in Chapter 11 bankruptcy months after its May 28, 2026 filing, with shares now showing a secondary market price of $0.00. The White Law Group continues to investigate potential claims on behalf of investors who purchased this non-traded REIT through broker-dealers. If you invested in Silver Star Properties REIT and have concerns about your losses, contact our FINRA arbitration attorneys today for a free consultation.
If you invested in Silver Star Properties REIT (formerly Hartman REIT) and have concerns about your losses, call us today at 888-637-5510 or contact us online for a free consultation.
Case Status: Bankruptcy Still Pending
Silver Star’s Chapter 11 case is proceeding before Judge Mark X. Mullin in the U.S. Bankruptcy Court for the Northern District of Texas, Case No. 26-42316-mxm11. As of late July 2026, no reorganization plan has been confirmed. The company reported roughly $100 million in assets against $75 million in liabilities at the time of filing, and has warned shareholders that existing equity may be impaired or cancelled once creditors are paid.
Silver Star Properties Bankruptcy: The Loan Defaults
Silver Star’s May 28 filing triggered defaults on four guaranteed loan agreements totaling more than $65 million:
- A $57.5 million facility involving the Walgreens Borrowers and lender Greyhawk Silver Star LLC, with approximately $24.6 million outstanding
- A $15.53 million loan between Silver Star Delray LLC and FBRED BDC Finance LLC, fully outstanding
- A $17 million loan between Cooper Street SPE LLC and HSRE-ADV VII LLC, fully outstanding
- An $8.1 million commercial mortgage-backed loan between Hartman Retail III DST and Wells Fargo N.A. as trustee
A fifth defaulted obligation, a $5.75 million promissory note tied to Silver Star’s McKinney, Texas self-storage subsidiary, matured June 7, 2026. The lender posted that property for foreclosure on June 2. The McKinney subsidiary filed its own separate Chapter 11 petition the same day as the parent company.
Shares Now Trading Near Zero
Silver Star Properties REIT shares, originally sold to retail investors at $10 per share through broker-dealers, are now showing a stock price of $0.00 as of the most recent update to Nareit’s REIT directory on August 21, 2026. This follows a steep decline that began years before the bankruptcy filing: net asset value per share fell from $12.08 to $6.25 during 2021 and 2022, and by mid-2025 secondary market trades were reported at just $0.42 per share against a stated NAV of $2.01.
Background: Years of Financial Deterioration
Silver Star was founded by Allen R. Hartman as Hartman Short Term Income Properties XX and raised capital from retail investors through broker-dealers across Texas and beyond. Distributions were suspended in 2022 and 2023 amid allegations of inflated property valuations and unpaid vendors. The company rebranded to Silver Star Properties in late 2022 and pivoted toward self-storage. This is Silver Star’s second Chapter 11 filing in under four years. Its operating subsidiary, Hartman SPE LLC, first filed for Chapter 11 in September 2023 after defaulting on a $259 million Goldman Sachs loan.
The Hartman Dispute
In March 2023, Silver Star’s board removed Allen Hartman as executive chairman, beginning a prolonged legal fight. Silver Star has alleged Hartman engaged in mismanagement and self-dealing that contributed to the company’s decline; Hartman has denied the allegations and has accused Silver Star of selling nearly $400 million in assets without returning proceeds to shareholders. A Maryland court found in April 2025 that Silver Star had failed to meet charter obligations requiring a shareholder vote on liquidation, and ordered a shareholder meeting. Hartman was ultimately removed from the board following a court-cleared vote in 2025.
How Investors May Be Able to Recover Losses
Investors who purchased Silver Star Properties REIT through a broker-dealer may be able to pursue a FINRA arbitration claim if the investment was recommended without proper regard for their financial situation, risk tolerance, or need for liquidity. Brokerage firms have an obligation to conduct reasonable due diligence on offerings like this one and to disclose the risks of investing in a non-traded REIT, including illiquidity and the potential for loss of principal. A recovery through arbitration is separate from, and does not depend on, any recovery available through the bankruptcy case itself.
Contact The White Law Group
The White Law Group is a national securities fraud and investment loss recovery law firm with offices in Chicago and Seattle. If you invested in Silver Star Properties REIT (formerly Hartman REIT) and have concerns about your losses, call us today at (888) 637-5510 for a free consultation, or contact us online. You can also learn more about the arbitration process from our FINRA arbitration attorneys.
Timeline of Key Events
- August 21, 2026: Secondary market share price shown at $0.00 in REIT industry tracking data
- July 2026: Case remains active with no confirmed reorganization plan
- June 2, 2026: McKinney self-storage property posted for foreclosure
- May 28, 2026: Silver Star Properties and its McKinney subsidiary file for Chapter 11 bankruptcy
- August 2025: Court-ordered shareholder vote on liquidation vs. self-storage strategy
- July 2025: Secondary market share price reaches $0.42, against a stated NAV of $2.01
- April 2025: Maryland court orders shareholder meeting; finds Silver Star failed charter obligations
- March 2025: Workforce reduced from 190 to 22 employees
- December 2024: Charles Schwab ceases custodianship of Silver Star shares
- June 2024: NAV reported at $2.01 per share, down from $2.70
- February 2024: Subsidiary Hartman SPE emerges from its first Chapter 11 with $135 million in replacement financing
- October 2023: Default on $259 million Goldman Sachs loan
- 2021-2022: NAV per share falls from $12.08 to $6.25; distributions suspended
Frequently Asked Questions
1. How do I file a claim to recover money I invested in Silver Star Properties REIT?
Most brokerage account agreements typically include a pre-dispute arbitration clause, which many retail investors don’t realize exists. This generally means claims against your broker are filed and resolved through FINRA arbitration rather than in court, and arbitration can still result in a monetary recovery. This is a separate process from any recovery you might see through the bankruptcy case itself.
2. My broker recommended Silver Star Properties REIT. Can the brokerage firm be held responsible even though it didn’t cause the bankruptcy?
Yes, potentially. Brokerage firms have a duty to supervise their representatives and to only recommend investments suitable for a specific client. If your broker recommended a high-risk, illiquid non-traded REIT without properly evaluating whether it fit your goals, the firm may be liable for failing to supervise that recommendation, regardless of what caused the REIT’s decline.
3. What made Silver Star Properties REIT (formerly Hartman REIT) a risky investment?
Non-traded REITs like Silver Star are illiquid and difficult to value, meaning investors often cannot sell shares when they need to and rely on the company’s own reported NAV. Silver Star’s NAV fell sharply over several years, distributions were suspended, and the company has now filed for Chapter 11 bankruptcy twice in under four years, leaving investors with shares that carry little to no current market value.
