A Houston-based investor who owns multiple offices and commercial properties in the Dallas area has sought bankruptcy protection for his assets, accumulating more than $200 million in debt.
Hartman SPE LLC is selling office and retail properties to refocus investments in self-storage. In the Dallas area, Hartman Real Estate Investment Trust owned 10 office buildings and three shopping centers as of early 2023.
High-profile properties include North Central Plaza Tower and Gateway Tower on the North Central Expressway in North Dallas. The real estate investor also owns the Three Forest Plaza office tower near Forest Lane in Dallas, Skylark Tower in Arlington, and Richardson Heights Shopping Center and Promenade North Shopping Center in Richardson.
The real estate company plans to transition to a new self-storage company called Silver Star Properties. Hartman SPE is a subsidiary.
The company announced it has sold more than $100 million in real estate since the start of the year and has contracts to sell an additional $131 million in office and retail buildings heading into bankruptcy.
“This filing allows (Hartman) SPE to pay all undisputed creditors, complete the refinancing of its maturing senior debt, and use it to redeploy into the Silver Star self-storage asset class. “It will enable us to conduct an orderly sale of assets to maximize capital,” according to the bankruptcy announcement.
Silver Star said the Chapter 11 filing will also help it refinance its maturing senior debt.
As of the beginning of this year, Silver Star owned 44 commercial properties totaling approximately 7 million square feet in Dallas, Houston, and San Antonio.
“We are pleased with the progress we are making toward our goal of moving the company to self-storage,” Silver Star Executive Committee Chairman Gerald Haddock said in a statement.
Silver Star announced in March that it had removed founder Allen Hartman as executive chairman and was working with Hartman to legally “resolve intercompany ownership issues.”
“In response to Mr. Allen Hartman's efforts to use controversial legal tactics to secure more favorable terms, we have diligently pursued mediation and legal remedies,” Silver Star said in a statement. . “We believe this filing is a viable and constructive means of obtaining the necessary relief to establish ownership of SPE’s assets, thereby protecting and enhancing shareholder value. ”
At Hartman, we have much of our North Texas real estate for sale. Purchases of office buildings have slowed in recent months due to a tight lending market and declining rental volumes.
