Haselkorn & Thibaut, P.A. (InvestmentFraudLawyers.com), a law firm focused on investment loss recovery, is investigating potential claims involving Silver Star Properties REIT, Inc., a non-traded real estate investment trust that raised approximately $44.5 million through the sale of roughly 4.45 million shares at $10 per share. By mid-2025, secondary market quotations valued shares at approximately $0.42, representing a decline of more than 95% from the original offering price for some investors. Silver Star Properties REIT filed for Chapter 11 bankruptcy for the second time on May 28, 2026, in the U.S. Bankruptcy Court for the Northern District of Texas (Case No. 26-42316)
The firm, which reports a 98% success rate across hundreds of investor claims and has handled more than $520 million in securities litigation and arbitration matters, is examining whether broker-dealers and financial advisors conducted adequate due diligence and provided appropriate disclosures when recommending Silver Star to retail investors. Free, confidential consultations are available to investors who suffered losses.
Silver Star’s Decline
Originally known as Hartman Short Term Income Properties XX, Inc., Silver Star Properties REIT focused on office, retail, and industrial properties in the Houston area. The company stopped selling shares in April 2013 after failing to file a required post-effective amendment to its prospectus, halting the offering at approximately 4,445,678 shares sold.
In 2022, management announced a strategic shift away from traditional commercial real estate and toward self-storage assets. The company acquired Southern Star Self-Storage, a portfolio of nine properties, in 2023. However, rising interest rates, unsuccessful asset sales, deferred maintenance, and vendor payment issues appear to have undermined the strategy.
The company’s reported net asset value (NAV) illustrates the deterioration. Silver Star reported an NAV of $12.08 per share in 2021, which later fell to $6.25 in 2022, $2.70 in December 2023, and $2.01 in June 2024. By mid-2025, secondary market quotations were approximately $0.42 per share.
According to Matthew Thibaut, founding partner of Haselkorn & Thibaut, such dramatic losses raise questions about what financial professionals knew, or should have known, about the investment’s risks and whether those risks were adequately disclosed to clients. He noted that non-traded REITs are often complex, illiquid, high-commission investments that may not be appropriate for all retail investors.
Bankruptcy and Loan Defaults
Silver Star’s financial difficulties were accompanied by bankruptcy filings and loan defaults. In 2023, Hartman SPE, LLC, a major operating subsidiary holding many office properties, filed for Chapter 11 bankruptcy, citing debt maturities and property-related disputes. The subsidiary emerged from bankruptcy in February 2024 after obtaining a $135 million exit facility.
The parent company filed for Chapter 11 protection on May 28, 2024, reporting approximately $100 million in assets and $75 million in liabilities. A June 2024 SEC filing disclosed multiple loan defaults and a $5.75 million promissory note tied to a self-storage property that had entered foreclosure proceedings. The company warned shareholders that bankruptcy proceedings could eliminate any remaining equity value.
Governance Disputes and SEC Investigation
Silver Star also became embroiled in a governance dispute involving founder Allen R. Hartman. In litigation filed in Texas, the company accused Hartman of fraud, breach of fiduciary duty, and interference with asset sales. Hartman alleged that management sold significant income-producing assets without distributing proceeds to shareholders and adopted measures that diluted his voting influence.
In November 2023, Silver Star disclosed that the SEC had opened a formal investigation into the company. The investigation later concluded without enforcement action.
Potential Investor Claims
FINRA rules require broker-dealers to perform reasonable due diligence on investment products and ensure recommendations are suitable for clients’ financial circumstances and risk tolerance. Since June 2020, recommendations must also be in the investor’s best interest.
Financial advisors and firms that recommended Silver Star may face scrutiny if they failed to adequately investigate the REIT’s financial condition, debt obligations, governance concerns, or the risks associated with non-traded REIT investments, including illiquidity and limited transparency.
Haselkorn & Thibaut, P.A. handles non-traded REIT loss recovery matters on a contingency-fee basis. Investors who suffered losses in Silver Star Properties REIT are encouraged to seek legal advice promptly, as claims may be subject to statutes of limitation and other filing deadlines.
For a free confidential consultation, call 1-888-885-7162 or visit investmentfraudlawyers.com.
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Legal Notice
This press release is intended solely to investigate how FINRA-member broker-dealers and SEC-registered investment advisers researched, marketed, recommended, supervised, and sold investment products and strategies involving Silver Star Properties REIT or similar investments.
This release is for informational purposes only and does not constitute legal advice. Every case is unique, and results depend on the specific facts and circumstances involved. Past results do not guarantee future outcomes.
