After a lively bidding war, high-profile local real estate investor Nate Paul is the new owner of a prime piece of property with frontage on Barton Springs Road in Central Austin.
Paul, who resides in the Barton Creek neighborhood, bought the 2.1-acre property at 511 Barton Blvd. through an online auction Thursday with a winning bid of $4.3 million, edging out Austin-based River City Capital Partners LLC in the final round.
The property boasts views of downtown Austin, Lady Bird Lake and Zilker Park, and has been in the same family for 83 years. Before being auctioned by Concierge Auctions, Joe Longton of Kuper Sotheby’s International Realty had the property listed for $4.5 million.
Paul, founder and CEO of World Class Holdings, told the American-Statesman he is using personal funds to buy the property, which will be for his personal use. The closing is set for Jan. 2. Paul attended the auction clad in blue jeans and a Yankees ballcap.
Concierge, a global auction firm based in New York with offices in Austin, described the property as a “hidden gem” — “impossibly rare and auspiciously positioned.”
Longton said the property attracted strong interest from the development community and wealthy individuals looking for a one-of-a-kind residential homesite.
A deposit of $100,000 was required to participate in the auction, and the minimum bid was set at $1 million.
“We had a highly energetic field of 19 bidders wanting this rare property,” said Dean Poole, director of broker relations for Concierge Auctions. “Local CEOs, professional sports figures, well-known developers and Hollywood executives were all included in the bidding. We are proud that our global marketing of the property and our auction format brought a quality price that exceeded our sellers’ expectations.”
The sellers are June Thorp Rade Marital Trust I and Raymond H. Rade Family Trust of Goliad. The property has been in the hands of the Thorp and Rade families for decades. Raymond D. “Boss” Thorp, a former Austin police chief, died in 1975 at age 84.
A 2,600-square-foot house and garage apartment are currently on the site.
Peter Kehle with River City Capital Partners attended the auction with his business partner, Cory Older. Afterwards, Kehle and Older shook hands with Paul, who suggested they have dinner sometime.
In an interview Friday, Kehle told the Statesman that the property has some development challenges.
In addition to having nine heritage trees, a significant portion of the site would be limited to commercial-only use, with no residential usage allowed under current zoning, Kehle said. And compatibility setbacks from surrounding properties would limit development to three stories.
“After studying multiple development concepts we came up with a high-end boutique hotel, which would have allowed us to build upon the site’s main strengths: it’s downtown skyline views, gorgeous ancient oaks and proximity to the best of Austin,” Kehle told the Statesman.
But after what Kehle said “turned out to be a spirited auction” that came down to a contest between two local real estate players over a prized local property, Paul prevailed.
The 30-year-old Paul and his World Class Holdings — which has offices in Austin, Dallas, New York and Los Angeles — is well known in local real estate circles and beyond.
Paul has purchased numerous high-profile properties in recent years. In late June, 3M Co. said it reached a deal with World Class to buy 3M’s 156-acre campus in far Northwest Austin for an undisclosed price. The Travis Central Appraisal District valued the property at $80 million this year.
In recent years, World Class has purchased downtown sites that housed Spaghetti Warehouse; the IHOP near Rainey Street; Katz’s Deli; and La Zona Rosa. World Class also owns a choice tract near Lady Bird Lake across from the Austin Convention Center, as well as the 118-acre former Cypress Semiconductor campus in Round Rock.
According to a July article in Forbes magazine, Paul started building World Class Holdings in 2007, growing it to $1.2 billion in assets and 10 million square feet of commercial real estate ranging from office space to retail to self-storage. The firm’s portfolio includes 120 properties spanning 17 states from California to New York, Forbes said.
At one time, Paul bid $800 million for Manhattan’s Plaza and Dream hotels, according to the article. It says Paul has entitlements to build 6 million square feet in downtown Austin.
Paul also made headlines when he was sued in recent years, once by an investor and once by former employees of a rooftop club he owns in downtown Austin, who said they were cheated out of their tips. Both lawsuits were settled out of court.