Silver Star Properties is facing foreclosure on three Texas office buildings after allegedly defaulting on a $57.8 million loan from a Benefit Street Partners fund, according to Roddy’s Foreclosure Listing Service. The properties at risk are Three Forest Plaza in Dallas, One Technology in San Antonio, and Ashford Crossing II in Houston.
The company has been selling off office assets as part of its shift toward self-storage facilities. Despite these efforts, the sales have not kept pace with financial obligations. Silver Star did not respond to requests for comment regarding the impending foreclosures.
The company is also dealing with ongoing legal disputes between former CEO Allen Hartman and current CEO Gerald Haddock. Hartman was removed by the board in 2023 following accusations of nepotism and mismanagement, which allegedly led to Silver Star defaulting on a $259 million CMBS loan from Goldman Sachs in October 2023. Trustees sued Hartman for $50 million later that year, alleging fraud and self-dealing. In February 2024, the SEC began an inquiry into Silver Star Properties.
The board claims that since his ouster, Hartman has attempted to undermine the company; however, he denies these allegations.
Under Haddock’s leadership, Silver Star has aimed to transition away from commercial real estate by selling its 35-property portfolio and filed for bankruptcy protection in 2023. The company has acquired several self-storage properties as part of this new strategy—including a $26.5 million facility purchased in Delray Beach, Florida, in August 2024.
Further details about the SEC investigation into Silver Star can be found at https://therealdeal.com/texas/houston/2024/02/22/sec-launches-investigation-into-silver-star-properties/. Additional background on Haddock’s recovery plans is available at https://therealdeal.com/texas/2024/01/23/how-gerald-haddock-plans-to-dig-silver-star-properties-out-of-a-hole/. Coverage of the company’s commercial portfolio sell-off can be read at https://therealdeal.com/texas/houston/2023/12/19/silver-star-subsidiary-seeks-protection-amid-sell-off-of-commercial-portfolio/.
