Silver Star Properties REIT provides Year-End Update on Maryland Litigation, Legacy Debt Repayment and Property Dispositions

HOUSTON, Dec. 19, 2024 /PRNewswire/ -- Silver Star Properties REIT, Inc. ("Silver Star" or the "Company"), a self-managed real estate investment trust currently repositioning into the self-storage asset class, today announced important year-end developments including an update of ongoing litigation in Maryland, the early retirement of loans originated in late March 2024 in connection with the refinance of legacy SASB financing, and the status of property dispositions through January 2025.

Maryland Litigation Update

The Maryland litigation trial was held on November 12-15, 17-18 and closing arguments were held on November 26^th, 2024. Mr. Haddock attended the entire trial and stated, "We feel encouraged by the entire trial. Litigation is uncertain, but we hope to know by the end of the year."

The trial court judge is reviewing the case, and a ruling is expected in the latter part of December 2024 or early 2025.

Legacy Debt Repayments and Dispositions Schedule

Between April 1 and December 1, 2024, the Company has completed the sale of 17 legacy office properties and repayment of $120 million of senior mortgage debt ahead of schedule and 17 months prior to loan maturity. The remaining obligations under the senior loan are being repaid prior to year end. The Company has successfully reduced its overall leverage, strengthened its balance sheet and is successfully repositioning for long-term financial stability and value creation. The early payoff of this debt underscores the Company's prudent capital management and commitment to a strong financial foundation.

On December 16, 2024, the sale of the Westway office property located in Dallas, Texas closed. The sales price was $9.0 million. Proceeds of the Westway sale effectively extinguished remaining payment obligations under the $120 million senior loan agreement.

On December 20, 2024, the Company expects to close on the sale of the Northchase office property located in Houston, Texas. The contract sale price is $2.15 million. On December 23, 2024, the Company expects to close the sale of the Atrium I and Atrium II office properties, also located in Houston, Texas. The contract sale price is $5.375 million.

On January 10, 2025, the Company expects to close on the sale of the Ashford Crossing office property located in Houston, Texas. The contract sale price is $4.65 million. On January 15, 2025, the Company expects to close on the sale of the Commerce Plaza Hillcrest office property located in Dallas, Texas.

Net sales proceeds of Northchase, Atrium I, Atrium II, Ashford Crossing and Commerce Plaza Hillcrest property sales will be applied to the substantial repayment of the junior loan agreement, as amended. The junior loan agreement, in the original amount of $15.0 million, was upsized by approximately $20.0 million in July 2024 to facilitate the acquisition of two self-storage properties and a portfolio of single tenant triple-net assets.

With the completion of the asset dispositions described above, the Company's real estate assets will be comprised of four Class A self-storage properties, a 16 property portfolio of Walgreen's, single tenant triple net properties, 7 legacy office properties and one developed retail pad site being held for sale.

The Pivot Strategy Continues

As the new year begins, our stabilized balance sheet will permit further acquisition of self-storage assets under our New Direction Plan. The prospective sale of other legacy properties will streamline our real estate asset portfolio, provide capital for further investment in higher-growth opportunities and open the door to the very real prospect for raising new capital. The New Direction Plan is working. We firmly believe that we have and will continue to enhance our overall portfolio quality and deliver improved value to shareholders.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management's current expectations, assumptions, and beliefs. Forward-looking statements can often be identified by words such as "anticipate," "estimate," "expect," "intend," "may," "should" and similar expressions, and variations or negatives of these words. They are not guarantees of future results and forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statement, including those described in greater detail in our filings with the Securities and Exchange Commission ("the SEC"), particularly those described in our most recent Annual Report on Form 10-K, which was filed with the SEC on May 26, 2023 and Quarterly Reports on Form 10-Q. Readers should not place undue reliance on any forward-looking statements and are encouraged to review the Company's other filings with the SEC for a more complete discussion of risks and other factors that could affect any forward-looking statement. The statements made herein speak only as of the date of this Press Release and except as required by law, the Company does not undertake any obligation to publicly update or revise any forward-looking statements.

SOURCE Silver Star Properties REIT