Bankrupt REIT sells 7-building Houston office park
A Houston office park changes hands out of bankruptcy, a reminder that distress is still clearing the market's weakest assets.
Silver Star Properties REIT, which filed for Chapter 11 bankruptcy in late May, has sold The Preserve at North Loop, a seven-building office park in northwest Houston, to an Atlanta-based investor as the company sheds legacy office and pivots to self-storage.
The 219,000-square-foot complex at 2000-2060 N. Loop West, built in 1970, was 65% leased at the sale, down from 92% when Silver Star, formerly Hartman, acquired it in 2018. Marcus & Millichap’s Keith Lloyd and Brad Mills brokered the deal; terms were not disclosed. Silver Star listed roughly $75 million in liabilities and four loans in default in its filing.
Why it matters
The sale is a small but telling data point on how distress is still working through the office market: aging, half-empty suburban product changing hands out of bankruptcy at prices that reset the basis for whoever buys next. For Houston, it also marks another older office park exiting institutional ownership, the kind of asset a buyer acquires for cash flow today and optionality on redevelopment later, not for a leasing turnaround.
The numbers
The portfolio spans 219,000 square feet across seven buildings and was 65% occupied at closing. Silver Star, which held 29 office properties as recently as 2022, has been steadily divesting to fund its shift into self-storage. This was its second trip through Chapter 11, after a prior filing in 2023.
What’s next
The new owner gains immediate cash flow with room to reposition the 1970-vintage site over time. “This acquisition gives the buyer immediate cash flow while providing the flexibility to modernize the property,” said Marcus & Millichap’s Keith Lloyd, as capital keeps finding discounted office through the distress pipeline.