Silver Star Properties REIT Cleared as SEC Wraps Up Investigation

The SEC has concluded its investigation into Silver Star Properties REIT, finding no basis for enforcement actions against the company or its officers.

August 26, 2024

The SEC has officially concluded its investigation into Silver Star Properties REIT Inc., notifying the company that it does not recommend any enforcement actions based on the information available as of August 15, 2024.

The investigation, which began with a formal inquiry on February 2, 2024, followed voluntary information requests from the SEC in November 2023 regarding the activities of Silver Star, its affiliates, and current and former officers and directors. The inquiry originally stemmed from a notice received in July 2023, which involved concerns related to the removal of former CEO Allen R. Hartman, the acquisition practices of the REIT, and internal control weaknesses.

Silver Star Properties, formerly known as Hartman Short Term Income Properties XX Inc., rebranded in December 2022 and shifted its investment focus from office properties to self-storage facilities. The rebranding was followed by the removal of founder Allen Hartman as executive chairman in March 2023, after the company began investigating potential violations of fiduciary duties.

A legal dispute between Silver Star and Hartman has since developed, with a recent court ruling denying Hartman’s motion for partial summary judgment aimed at liquidating Silver Star. Gerald Haddock, the current CEO and executive chairman of Silver Star, expressed satisfaction with the ruling and emphasized the company's commitment to transitioning its assets towards self-storage and single-tenant real estate while expediting distributions to shareholders.

Silver Star also announced in July that it will continue its efforts to maximize capital for redeployment into its new focus areas.