HotelCREwiz:
'We are passionate about our role as the leader of reimagining real estate as we know it. We are World Class and the future is now.'

-Nate Paul, Founder, Chairman, President, and CEO

What the hell does that even mean? it's like he used the Dilbert mission statement generator. Add in the words "paradigm shift" and I think you win 'business jargon bingo'

 

High profile because it’s a nice tract with huge development potential (near the convention center, near Rainey Street, near I-35) and unrestricted by Capital View Corridors.

 

I've attended several SXSWs / Fun Fun Funs and I've always used their lot for parking. Funny, I live in NYC but this is the only IHOP I know off the top of my head.

“Doesn't really mean shit plebby boi. LMK when you're pulling thiccboi cheques.“ — @m_1
 

surprised and a bit disappointed that there's no discussion of exactly what he might have done in here. 3M said their deal was legit. this is more than just misstating assets. right?

 

We don't know anything as of yet and we won't know the full truth until this all plays out, which could take years. My best guess is some form of ponzi-scheme, where they were effectively using new capital to cover losses, show gains and rake in fees to affiliated entities.

I've believed this firm was a scam for over four years now. They own big profile (expensive) pieces of land in Austin that were supposed to be under construction years ago, but never broke dirt. Carrying costs are real, especially with our high property taxes, and I could never figure out how they were paying for debt service, property tax, property insurance and etc. on these deals while the land sat vacant for years.

 

I worked there for a little while. There was one guy in accounting with the title controller that worked for Sheena. He knew nothing about accounting but was one of the longest tenured people in the company. He spent all his time shuffling cash between 200 bank accounts. Seemed a little shady

Cognito
 

This is pretty funny, they requested an interview two weeks back, then went cold. At least I feel validated they had actually did have a lot going on. lol

 
Level 100 Magikarp:
Sorry if I am out of the loop, but what's the big deal about this person? The comments make him sound like a scummy person, but these types of people are everywhere.

World Class Capital news has been a staple of the Real Estate forum for years.

Commercial Real Estate Developer
 

Yes, and the famous Carmelo's site was officially listed for foreclosure last week. In other news, I saw where World Class refinanced some Eastside land with a one year note from a Hard-money lender. Probably paying 2-4 points and 12%-14% interest. That's called burning it hot!

 

This story has come to fascinate me for some reason.

I set up a news alert on Nate Paul and World Class Capital Group, and this story popped up:

https://www.statesman.com/news/20190924/austin-developer-buys-three-pro…

A developer named Ari Rastegar is buying World Class Capital Group's South 1st Street Portfolio.

As it turns out Ari Rastegar worked for World Class Capital Group for years and arranged hard money and equity for their deals, more to come on this I am sure.

 

I understood from the WC accountants that Ari had a $20m unsecured loan made to Nate at 20% interest. I would think that would ruin Ari when it defaults but I'm sure its not really his money anyways. He probably learned that one from Nate.

Cognito
 

Heard that he's defaulting in order to secure new loans with better rates. Don't know how plausible that is but he does seem good at getting new loans on these foreclosing properties. We will see what happens with this battle against the trustee at 3M campus...

 

While this may be possible. Some guys know how to make money in business regardless of the situation on the way up or down. I don't know the owner, it seems like he may be on of those guys. However, my question would be how would the debt yield metric apply from the lenders perspective? Would he just do a rate and term refi? Or short refi?

 
MangoTang:
While this may be possible. Some guys know how to make money in business regardless of the situation on the way up or down. I don't know the owner, it seems like he may be on of those guys.

Yes, well crooks and fraudsters make money in all cycles because they're fundamental business model is cheating their investors and lenders, not actually creating value. Pickpockets thrive in good economies and bad.

 

Game over for "World Class". Four of his entities have filed for bankruptcy, including on the 3M campus, which is in receivership. While it's four individual properties, he can't get financing except for hard money lenders.

https://www.statesman.com/business/20191106/four-nate-paul-led-entities…

It's been fun following the "JT Marlin" of CRE.

 
Statesman.com:
Brian Elliott, corporate counsel for World Class, characterized the bankruptcies as the result of a dispute with ATX Lender 5 LLC, which purchased the debt on the properties in September.

The bankruptcy filings have “no material effect on the overall business of World Class as these properties represent less than 2% of the properties owned by World Class and its affiliates,” Elliott said in a written statement Wednesday.

He called ATX Lender 5 “a rogue lender” that “refused to identify itself, the status of the loan it purported to purchase, or entertain any discussions for resolution while it failed to follow its obligations under the loan agreement.”

“In order to preserve our rights, my client resorted to filing on these entities,” Elliott said. “There is over $25 million in equity in these properties, and we will not compromise our rights for a rogue lender.”

https://media3.giphy.com/media/GpyS1lJXJYupG/giphy.gif" alt="ryan gosling" />

Commercial Real Estate Developer
 

Isn't filing bankruptcy the go to move when being foreclosed on?

I figured the investors would factor this into the PP of the loan. Hence why you hear distressed buyers acquiring loans for 30-50 cents on the dollar.

I have not done this myself. But if someone can provide any insight or links into how to price a distressed loan. It would be appreciated.

 

The raid from last year was related to a Vista Equity Partners investigation, confirmed. Ballsy move to publicly shame their close ally and someone with I am sure a lot of information.

 

It's pretty obvious who GB310 is from the 4am time stamp. Don't you feel guilty trying to through your 'mentor' under the bus after trying to steal $20m from him. I guess you would if you had a soul.

Cognito
 

It seems Nate is still quietly fighting his lawsuits. What is new is that he has started someting called the "Nate Paul Initiative". Some kind of non-profit, and he's paid advertising to get it to the top of a browser search in order to try to crowd out "World Class" and foreclosure or FBI Raid.

My favorite part is that the "non-profit" uses an abundance of the same meaningless buzzwords that Nate relishes: 'Our mission is to invest in philanthropy, impact investments, and social change opportunities that create actionable solutions to level the playing field and maximize opportunity for all.'

Who "invests" in philanthropy?

 
HotelCREwiz:
Who "invests" in philanthropy?

I mean, I agree with you that Nate Paul is a scumbag and this is just a cover, but it is certainly possible to invest in philanthropy, or do double bottom line investment.

For example, if I sponsored some kind of competition (to invent something? new business idea?) in a low income community of color and the winner got a sizable equity check to go and build out that idea.... that's certainly investment in philanthropy. Certainly I see folks in my industry (affordable housing) who give up a few bucks on a deal in order to accommodate a community goal - maybe that's putting in social services for residents, or taking a lower AMI base than is otherwise allowed.

I agree that most people who are using the term are full of shit and just want to be able to point to how "progressive" they are to deflect from the fact that they're the exact opposite. But it's certainly possible. Doing well by doing good is a thing.

 

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