Hartman SPE, operating under Silver Star Properties REIT Inc., boasts ownership of 35 parcels of commercial, retail, and industrial properties, with a staggering portfolio estimated at over $400 million.
Hartman $217M Debt : Stakes Are High
The minority member’s legal actions have left Hartman SPE teetering on the precipice of uncertainty, potentially scaring away potential buyers and necessitating substantial price adjustments for those willing to commit. To weather this storm, the company filed for Chapter 11, aiming to rapidly sell a portion of its portfolio to refinance its secured lender, satisfy all undisputed creditors, and maintain its transition efforts.
Vast Property Spectrum
Hartman SPE’s diverse property portfolio spans from industrial sites to high-end office spaces across Houston, Dallas/Ft. Worth, and San Antonio. With 30 properties under broker agreements, 12 under contract, and six nearing completion, the sales effort is nothing short of a whirlwind.
Pricing Under Pressure
Before seeking sanctuary in bankruptcy, Hartman was forced to slash the sale price of one property embroiled in a legal battle by a staggering $125,000. Additionally, it had to secure funding with a $2.7 million escrow and a $1 million escrow requirement. Another buyer demanded a $1.85 million price cut, citing concerns about being entangled in the state court lawsuit.
Hartman $217M Debt: Legal Quagmire
The legal drama unfolded in March 2023 when minority member Allen R. Hartman and REIT Property Management LLC filed a lawsuit against Hartman SPE and its affiliates in the District Court of Harris County, Texas. The suit alleges wrongful removal and salary termination by Silver Star Properties, with Allen R. Hartman identified as the founder of one of the debtor’s predecessor companies.
Hartman $217M Debt :Late Revelation
Curiously, the debtor claims that it only learned of the Texas lawsuit on July 19th when a copy of the Harris County petition arrived as an attachment to a pending legal action notice for one of its properties.
