Forbes Asia August 2017

AUGUST 2017 FORBES ASIA | 75

another $35 million renovating the 1980s building so it would

look like a place a tech company might want to call home. The

lobby was remodeled with an open layout, and a community

workspace was built on the second floor featuring Wi-Fi, mod-

ern boardrooms and private meeting areas. Paul then got three

out-of-town software companies to move their headquarters

there and recruited two other tenants, helping push occupancy

to 70%.

At the ancient age of 30, Paul is ready to go even wider. He

recently opened an office in Manhattan’s GM Building, run by

his sister, Sheena, who left her law career in 2013 to join her

brother at World Class, where she is chief operating officer. Sit-

ting in its boardroom, Paul talks about his decision to consoli-

date his real estate holdings in a holding-company structure.

He says one of his inspirations for the move works just 31

floors above. Many years ago, Carl Icahn organized his diverse

holdings in a single investment vehicle that he completely

controls and raised permanent capital around it. A board-

room deal toy from September 2016 showing $260 million of

loans from Ares Capital points to how Paul has put this plan

together. Paul says the debt was partly used for his recapitaliza-

tion but doesn’t want to go into too many details. His company

is private, and Nate Paul intends to keep it that way.

and wait—but he made a take-it-or-leave-it offer.

Indeed, Paul has puzzled many in Austin for securing

choice pieces of land and not developing them during a go-go

real estate market. He announced plans for a $100 million,

39-story apartment tower on a prime lot he owns next to the

Four Seasons Hotel but abandoned the project as other apart-

ment condos went up around town. Paul has covered the plot’s

expenses by renting it during South by Southwest to Sony and

Vice Media, which used it to put on concerts featuring Snoop

Dogg and Lady Gaga. For now, Paul says he wants to focus on

office space.

If Donald Trump can pass tax reform eliminating state tax

deductions, Paul’s long-term bet on Austin, where there is no

state income tax, might look even better. “While everyone else

was going vertical I went horizontal,” he says. “We feel we kind

of cornered the market on potential office space in downtown

Austin.”

Paul’s highest-profile acquisition came outside of Austin in

2014, when he bought the downtown Dallas skyscraper known

as the KPMG Centre. Lenders had taken control of the build-

ing through foreclosure, and KPMG was moving out. Paul

bought it for $43 million, mostly with debt, knowing tenancy

would go down to 14% once KPMG left in 2015. Paul spent

The world of World Class Holdings: Paul’s properties include the 3M
complex in Austin, the former KPMG Centre in Dallas and Great Value
Storage facilities in ten states.

F