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.