AUGUST 2017 FORBES ASIA | 71U
nlike other suc-
cessful Millennial
entrepreneurs, Nate
Paul is not a T-shirt
or hoodie kind of
guy—his uniform is a suit. He has
worn one to work, usually with a
vest, every day since he dropped
out of college nearly ten years ago.
“I always wanted people to take
me seriously,” the Texas real estate
prodigy says. “Part of it is you have
to look older.”
At 5’11”, with a stocky build
and a two o’clock shadow, Paul
certainly looks as though his
odometer has long since passed
30 years old. But that’s not why
the real estate brokers who clamor
to meet him take him seriously.
They try to get in the elevator that
rises to the top floor of Austin’s
tallest commercial skyscraper, up
past the offices of billionaire-run
private equity firms, because Paul
is the biggest buyer and owner of
land for development in the city.
And Texas isn’t big enough for his
ambition.
Paul’s World Class Holdings,
which he started building in 2007,
has $1.2 billion in assets, accord-
ing to a document obtained by
Forbes. That portfolio includes
120 properties in 17 states from
California to New York, but most
are in economically vibrant Texas.
World Class Holdings owns 10
million square feet of commercial
real estate that ranges from office
space to retail to self-storage. And
although he once bid $800 million
for Manhattan’s Plaza and Dream
hotels, Paul is no Texas Trump—
he doesn’t own a single trophy
building and his name is not on
any of his properties. “My assets are not
sexy,” the 30-year-old says proudly. “I
mean, I own lots of storage. But I love my
assets.”
For good reason. Paul, who retains
100% of the company, is not overlever-
aged according to financial documents,
and none of his debt is at the holding-
company level. Based on his holdingsinside and outside the company, Forbes
estimates that Paul’s net worth is $800
million. If commercial real estate prices
stay strong, he could be a billionaire soon.
It’s a particularly impressive trajec-
tory when you consider that real estate
is famously a dynastic business and Paul
is the son of an ob-gyn. Complicating
things further, he is the son of Indian im-
migrants from New Delhi in overwhelm-
ingly white Austin.
From the beginning, Paul set out to
build his portfolio as an operator and an
investor. In order to buy, he hit up his
obstetrician father’s buddies, charmed
high-net-worth individuals, and then
landed pension and insurance money. He
raised funds in dozens of partnerships to
do deals and kept upwards of 50% of the
profits. With the $25 million he started
raising from the Austin Police Retirement
System in 2009, he produced an annual
(and now fully realized) internal rate of
return of 24.8%, net of fees.
Now Paul is getting ready to double
down on his early success. He has spent
much of the past year recapitalizing his
business, cashing out limited partners
(such as the Austin Police Retirement Sys-
tem) and taking full ownership of many
of World Class’ partnerships, often using
debt and his own accumulated capital. He
then rolled up all the properties he could
into his new holding company, which is
attempting to raise $1 billion of preferred
equity in the coming year. Paul thought
about trying to raise a private equity fund,
but what he really wants is permanent
capital, which would allow him to get off
the treadmill that requires him to sell as-
sets to achieve exits for his investors every
few years. “I am thinking with a 30-year
time horizon,” Paul says. “I actually have a
30-year amortization and will be around.”
“From an investment perspective his
returns have been spectacular, and he
does a good job returning capital early,”
says Robert Smith, an Austin private
equity billionaire who has invested tens
of millions in five of Paul’s deals. “I look
at what Nate has accomplished; he has
thought very strategically about areas like
storage and the Austin marketplace.”
Joseph Liemandt, founder and CEO
of Austin’s Trilogy Software, adds, “HisYouthful Longhorn: “My assets
are not sexy. I mean, I own lots of
storage. But I love my assets.”
FORBES ASIA
NATE PAUL