HOUSTON, April 30,
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, announced today that it is providing an update
regarding Southern Star Self Storage Investment Company ("Southern
Star"), an investment made by Silver Star.
Effective April 15, 2024, monthly
distributions to Southern Star sponsored DSTs have been suspended
pending the Company's further examination of the current operations
of Southern Star and its sponsored DSTs. Each one of the DSTs was
evaluated separately by Southern Star's management in reaching the
decisions that were made, recognizing that all of these decisions
were made in the best interests of the respective Southern Star
DSTs unit holders.
On April 15, 2024, the Company
announced that it is continuing an examination of the current
operations of Southern Star. Based on an initial review, and
subject to more extensive review and analysis, Southern Star is
experiencing operating, economic, declining economic conditions in
its area, management difficulties and other difficulties and
potential circumstances with respect to the operations of four
Southern Star-sponsored Delaware Statutory Trusts (DSTs) that own
income-producing self-storage assets. In connection with the
Company's acquisition of Southern Star on May 5, 2023, Southern Star was designed, at the
behest of its management, to operate in a largely autonomous
manner, notwithstanding the consolidated accounting treatment of
its financial results with those of the Company.
The Company is now beginning to take charge of Southern Star's
day-to-day operations by placing David
Wheeler, the Company's President and Chief Operating
Officer, in charge of those operations. Gerald Haddock, the Company's CEO and Executive
Chair, and the rest of Silver Star's management team, together with
Mr. Wheeler, will be conducting a strategic review of Southern Star
and alternatives to maximize its value going forward. Subject to
further review and analysis, the Company intends to consider
various alternatives, including the possible sale of Southern Star,
the sale of specific assets within individual DSTs and dissolution
of the respective trusts, and/or the outsourcing of various aspects
of Southern Star's operations.
Mr. Haddock stated, "As soon as the Company develops information
regarding the future direction and strategy for Southern Star, we
will update investors as appropriate. Each decision relating to the
operations of the DSTs will be made directly and separately for
enhancing the best interests of the applicable unit holders of the
pertinent DST; while contemporaneously fulfilling duties and
responsibilities to all of our constituent interests."
As Silver Star continues its analysis, the goal is
to determine the proper course of action for the respective
DST unit holders. Under review and consideration is the operational
turnaround of ongoing facilities management by Southern Star,
reevaluation of outsourcing facilities management to a third party,
or the sale of DST properties to the fullest extent practicable in
an orderly fashion.
Contact:
Investor and Media Relations
press@silverstarreit.com
1-877-734-8876
Forward-Looking Statements: This press
release contains a number of forward-looking statements. Because
such statements include a number of risks, uncertainties, and
contingencies, actual results may differ materially from those
expressed or implied by such forward-looking statements, and
investors should not place undue reliance on any such
statements. Forward-looking statements can often be identified
by words such as "continues," "can," expect," "intend," "will,"
"anticipate," "estimate," "may," "plan," "believe" and similar
expressions, and variations or negatives of these words. These
forward-looking statements include, but are not limited to,
statements regarding the Company's search for a new auditor and its
hope that a new auditor can be engaged in the near future and that
its annual report on Form 10-K can be completed and publicly filed;
the continuation of the examination of the current operations of
Southern Star; the Company's intent to consider various
alternatives, including the possible sale of Southern Star, the
sale of specific assets within individual DSTs and dissolution of
the respective trusts, and/or the outsourcing of various aspects of
Southern Star's operations; the Company's plan to update investors
with respect to the status of Southern Star as appropriate; the
Company's expectations and beliefs regarding the Hartman
litigation; the timing and ultimate resolution of the various
litigation, fight for corporate control and other matters involving
Hartman; the continued execution of the Company's strategy of
pivoting into the self-storage space; the Company's continual
evaluation of its legacy assets in order to maximize shareholder
value; the Company's policy to not dispose of any asset for less
than its maximum determinable value and to maximize earnings and
value; the implications to the Company of the assignment of an OTC
trading symbol for its common stock; whether the Company may be
subject to certain FINRA rules; any actions the Company may need to
take to comply with any FINRA rules; the Company's continual
evaluation of various options to provide greater shareholder
liquidity, including its intention to seek listing of its common
stock on a securities exchange or admission to over-the-counter
trading, a public offering, a listing of the common stock on an
exchange or admission to OTC trading without a public offering, and
merger and/or acquisition opportunities; the Company's belief that
further legal action could ensue to unwind the issuance of common
shares under the Rights Plan if Hartman prevails in his efforts to
set aside or invalidate the Rights Plan or to cause the dilutive
issuance of additional common shares to Hartman, as well as any
further action Hartman may take to prevent other Company
shareholders from receiving benefits under the Rights Plan; and the
timing and/or ultimate outcome of the SEC investigation. None of
the foregoing are guarantees or assurances of future outcomes or
results and all are subject to numerous risks, uncertainties and
assumptions that could cause actual results to differ materially
from those expressed in any forward-looking statement, including
those described above and in our filings with the Securities and
Exchange Commission, particularly those described in our most
recent Annual Report on Form 10-K and our Quarterly Reports on
Form 10-Q. A number of important factors
could cause actual results to differ materially from the
forward-looking statements contained in this material.
Forward-looking statements in this press release speak only as of
the date on which such statements were made, and the Company
undertakes no obligation to update any such statements that may
become untrue because of subsequent events. Such forward-looking
statements are subject to the safe harbor protection for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995.
View original
content:https://www.prnewswire.com/news-releases/silver-star-properties-provides-update-regarding-southern-star-302132340.html
SOURCE Silver Star Properties REIT, Inc.