San Diego Investor Nabs Texas Business Park Through Bankruptcy Court

Avistone Named Winning Bidder for Business Park in the Dallas-Fort Worth Area

A Richardson, Texas, business park has sold to a San Diego-based real estate investment firm through bankruptcy court in a $6.6 million deal. (CoStar)

By Candace Carlisle
CoStar News

January 8, 2024 | 1:55 P.M.

A San Diego real estate investor known for banking on industrial and flex properties in California, Florida, Georgia, Ohio and Texas is expanding its portfolio in the Lone Star State with the acquisition of a two-property business park in the Dallas-Fort Worth region.

Avistone was the winning bidder on a two-property business park in Richardson, Texas, a northern suburb of Dallas, being sold out of Chapter 11 bankruptcy by an affiliate of Houston-based Silver Star Properties REIT in what was a $6.6 million deal. The months-long marketing process conducted by JLL brought about 100 interested parties to the table before the bid was made by the San Diego firm to acquire 1901 N. Greenville Ave. and 1900 Firman Drive.

David Wheeler, president of Silver Star, said in a declaration to the court the debtor Hartman SPE, which is an affiliate of Silver Star, is "unlikely to receive a higher or better offer" than the identified buyer, Avistone.

"The purchase agreement represents the best offer obtainable at this time and under current market conditions," Wheeler said, adding the next highest offer on the property was $6.58 million. The proposed deal is subject to court approval before it is finalized.

Silver Star is planning to pivot its portfolio into self-storage properties with the potential to add special use industrial properties to the mix in the future, now co-CEO Gerald Haddock told CoStar News in a recent interview. Silver Star recently filed its Chapter 11 bankruptcy plan in hopes of emerging from bankruptcy protection as early as mid-February, according to a legal filing with the bankruptcy court.

Texas REIT Could Pivot Beyond Self Storage Into 'Special Purpose' Industrial Space

The debtor's estate currently includes 28 properties with an estimated market value of about $285 million, with additional properties that could sell in the near future. Hartman SPE entered bankruptcy last September with 35 properties with an estimated value of about $400 million.

The properties in its smaller portfolio, which includes some expected to sell in the near future from the bankruptcy court, include:

• Dallas-Fort Worth region: 12655 N. Central Expressway in Dallas; 1901 N. Glenville Drive in Richardson; 8111 LBJ Freeway in Dallas; 14110 and 14114 N. Dallas Parkway in Dallas; 12850 Hillcrest Road in Dallas; 1521 N. Cooper St. in Dallas; 1333 Corporate Park Drive in Irving; 1701 Market Place Blvd. in Irving; 12221 Merit Drive in Dallas.
• Houston: 3800-4000 N. Shepherd Drive; 3707 FM 1960; 5870 Hwy 6 North; 15840 FM 529; 2909 Hillcroft; 2010 N. Loop W; 5020 FM 1960 West; 11200 Westheimer Road; 11811 North Freeway; 15311 W. Vantage Parkway; 3100 Timmons Lane, 14550 Torrey Chase Blvd.; 616 FM 1960; 601 Sawyer; 16010 Barkers Point Lane; 400 N. Sam Houston; 1880 S. Dairy Ashford Road.
• San Antonio: 8610 and 8620 N. New Braunfels; 7411 John Smith Drive.

In the bankruptcy plan filed with the court, Silver Star outlines plans for two of its affiliated entities to borrow up to $120 million in exit financing. Of this amount, $15 million is coming from a mezzanine loan with an affiliate of RMWC. The remainder of the two-year loan is being financed by an affiliate of Benefit Street Partners, according to the plan filed with the court. The loans are being cross-collateralized in part by the REIT's remaining real estate portfolio totaling nearly 4.5 million square feet in the Dallas-Fort Worth region, Houston and San Antonio.

The debtor's Chapter 11 plan to exit bankruptcy is subject to court approval of the U.S. Bankruptcy Court for the District of Delaware.