Silver Star REIT Loses Schwab as Custodian, Revises NAV

Silver Star Properties REIT will lose Charles Schwab as its custodian due to reporting delays, while revising its NAV downward to an estimated $2.70 per share following a significant share issuance.

September 30, 2024

Silver Star Properties REIT, formerly Hartman Short Term Income Properties XX Inc., has informed shareholders of upcoming changes to its custodial services and provided a net asset value (NAV) update. Charles Schwab will cease to act as custodian for Silver Star shares held in 401k and IRA accounts as of December 2, 2024, citing Silver Star’s failure to meet certain reporting benchmarks. Schwab will default the value of Silver Star shares to zero until the reporting issues are resolved.

The REIT attributes these delays to legal challenges, including actions by former CEO Allen R. Hartman and an SEC investigation, both of which have since concluded. Silver Star is working to complete the necessary reports and expects to resolve the issue by year-end.

In addition to the custodial change, Silver Star revised its NAV due to a “flip-in” event in early 2024, which resulted in the issuance of over 31 million new shares. Initially valued at $6.25 per share as of December 2022, the NAV was adjusted to $3.36 per share on a pro forma basis, with management estimating a further reduction to $2.70 per share as of December 2023, pending board approval.

The REIT remains in an ongoing legal dispute with Hartman and does not expect the matter to be fully resolved until 2025.