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A Houston-based investor that owns multiple Dallas-area office and retail properties has sought bankruptcy protection for its assets with more than $200 million in debt.
Hartman SPE LLC has been selling off its office and retail properties to refocus the company on self-storage investments. In the Dallas area, the Hartman real estate investment trust owned 10 office buildings and three shopping centers at the start of 2023.
Some of its high-profile holdings include the North Central Plaza tower and Gateway Tower on North Central Expressway in North Dallas. The real estate investor also owns the Three Forest Plaza office tower near Forest Lane in Dallas, the Skylark Tower in Arlington and the Richardson Heights and Promenade North shopping centers in Richardson.
The real estate firm is transitioning to a new self-storage company called Silver Star Properties. Hartman SPE is a subsidiary.
The company said it’s sold more than $100 million in properties since the start of the year and has another $131 million in office and retail buildings under contract for sale as it enters bankruptcy.
“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,” according to the bankruptcy announcement.
Silver Star said the Chapter 11 filing will also help it refinance its maturing senior indebtedness.
At the start of this year, Silver Star owned 44 commercial properties with almost 7 million square feet in Dallas, Houston and San Antonio.
“We are pleased with our progress toward our goals of moving the company into self-storage,” Silver Star executive committee chairman Gerald Haddock said in a statement.
In March, Silver Star said it removed company founder Allen Hartman as executive chairman and has been working to legally “resolve intercompany ownership matters” with Hartman.
“The company has diligently pursued mediation and sought legal remedies in response to Allen Hartman’s efforts to secure more favorable terms through the use of controversial legal tactics,” Silver Star said. “The company believes that the filing represents a viable and constructive avenue to obtain the necessary relief to prove its ownership of the SPE’s properties, thereby safeguarding and enhancing shareholder value.”
Hartman has many of its North Texas properties listed for sale. Office building purchases have slowed in recent months because of a tight lending market and low leasing volumes.
