Beleaguered Houston REIT Sells Another Dallas Office Building Amid Bankruptcy Proceedings
A Dallas-area office building is the latest to be plucked off the balance sheet of a bankrupt Houston company.
A Dallas-based investor will pay $12.5M for Westway One at 1707 Market Place Blvd. in Irving, The Dallas Morning News reports. The 170K SF building was most recently valued at $20.6M.
“I believe that the debtor is unlikely to receive a higher or better offer, the purchase agreement represents the best offer obtainable at this time and under current market conditions,” Hartman SPE President David Wheeler said in a bankruptcy court filing.
The owner, Hartman SPE, is a subsidiary of Houston-based Silver Star Properties REIT, which filed for Chapter 11 bankruptcy in September amid a restructuring of the business and allegations of mismanagement by the company’s founder.
Silver Star is slowly chipping away at its $217M in outstanding debt. It sold the 10-story North Central Plaza I office tower in North Dallas to Costco last week, and another property is under contract in Irving, the DMN reported.
The bankruptcy court also approved the sale of Gateway Tower at 8111 Interstate 635 for $14.1M to Hamilton Commercial.
The company said it expects to exit bankruptcy with $370M to invest in future business plans, primarily to acquire self-storage assets.
Meanwhile, an ongoing dispute with the company’s founder, Allen Hartman, is adding to the firm’s financial woes. Executive Chairman Gerald Haddock accused Hartman of mismanagement and unlawful meddling in a video recently filed with the Securities and Exchange Commission.
As of June, the REIT owned 41 commercial properties comprising about 5.5M SF, plus one pad site and one land development, all of which were located in Texas, according to a Securities and Exchange Commission filing.
