Silver Star Nears Refinance Deal
The company is pursuing a refinancing agreement with JPMorgan as it works to resolve tensions with its lender BSP.
September 03, 2025
Silver Star Pushes Forward Amid Loan Default, Legal Friction, and Refinancing Efforts
Silver Star Properties REIT is moving to resolve a loan default tied to its Walgreens real estate portfolio. After missing the August 9 deadline to repay a $57.75 million loan in full, the company is now in the final stages of negotiating a refinancing deal with JPMorgan Chase Bank. The goal: to pay off the outstanding balance—currently at $50.3 million—and exit a challenging chapter that’s triggered legal disputes and intensified scrutiny from its lender, Benefit Street Partners (BSP).
The Walgreens portfolio includes 16 net lease properties acquired last year across seven states. Silver Star financed the entire $60.9 million purchase using debt, with BSP as the lender. The one-year loan came with monthly interest payments at a 6.00% fixed rate, but no principal payments until maturity. When the company didn’t repay the full amount by the due date, BSP issued a default notice and began accruing interest at a higher rate.
What followed were moves toward foreclosure under separate guaranty agreements—backed by other Silver Star assets. Those sales were later canceled after a round of urgent negotiations. By the end of August, both parties had reached a preliminary agreement to pause further action and document a forbearance arrangement. The expectation is that this agreement will give Silver Star enough time to close the JPMorgan refinancing within 60 to 90 days from September 1.
This isn’t the first sign of strain between the two parties. Earlier this year, BSP issued a separate notice of default over a financial reporting requirement in the Walgreens loan terms. Silver Star argues that it wasn’t possible to meet the condition exactly as written, though it did submit timely financial statements. The company disputes the claim that this constitutes a breach or justifies default interest charges.
Behind the scenes, the relationship with BSP has been under pressure since the early days of Silver Star’s post-bankruptcy restructuring. After the company’s former CEO exited, Silver Star secured a $120 million Senior Exit Loan from BSP to help it emerge from Chapter 11. That loan was repaid in under nine months, but came with a hefty cost—more than $17 million in interest and fees.
In the months that followed, Silver Star watched as BSP applied remaining reserve funds—originally earmarked for taxes and insurance—to reduce balances on other loans. These actions happened without notice and led to legal action in Texas courts. In early August, Silver Star secured a temporary restraining order and filed claims tied to lender liability, citing breach of fiduciary duty, duress, and conversion.
Now, Silver Star is focused on what comes next. With a JPMorgan term sheet signed and a forbearance deal in the works, the company is positioned to move forward. If the refinance closes on schedule, Silver Star will clear the Walgreens loan and shift attention to broader goals—without the overhang of litigation or contested defaults.
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