Controversial Austin developer Nate Paul sells self storage portfolio for $588M

The 64-property self-storage chain was purchased out of bankruptcy by a CBRE joint venture

Nate Paul of World Class Holdings and one of his Great Value Storage facilities (Great Value Storage, iStock)
Nate Paul of World Class Holdings and one of his Great Value Storage facilities (Great Value Storage, iStock)

UPDATED March 23, 2022, 7:40 p.m.: Embattled Austin real estate magnate Nate Paul’s World Class Holdings sold off its bankrupt Great Value Storage portfolio, about a quarter of its holdings, to CBRE and William Warren Group/StorQuest for $588 million.

Paul, a hotshot millennial developer who has faced foreclosure threats and even raids by the FBI, this week sold the 64-property self-storage portfolio, with properties spanning 10 states. Paul’s company will make as much as $178.8 million from the transaction before paying back certain creditors, possibly reducing its profit to about $95 million, according to a bankruptcy filing. A spokesperson for World Class said the lowest profit would be $130 million based on stipulations in the confirmation order.

The deal is a win for Paul, who was forced to put the self-storage portfolio into bankruptcy in April to fend off a foreclosure attempt by its lender. It allows him to return as the sole director of the entities that sold the storage assets, giving him control over proceeds from the deal.

Paul became one of Austin’s most prominent real estate owners over the last decade as his firm bought many valuable and high-profile properties across the metro area. At one point, the firm had amassed $1.2 billion in assets, according to Forbes. However, Paul’s vast portfolio has generated national headlines in recent years following a series of bankruptcy filings and a 2019 raid on his home and office by the FBI and U.S. Department of Treasury. Paul later sued the FBI, claiming the raids violated his civil rights and harmed his businesses.

That same year, one of Paul’s largest companies, Great Value Storage, defaulted on an $82 million mezzanine loan from Teachers Insurance Annuity Association of America. In 2021, the loan was sold to RREF Storage, a subsidiary of New York powerhouse Related Companies, which also alleged the loan was in default.

Sign Up for the undefined Newsletter

By signing up, you agree to TheRealDeal Terms of Use and acknowledge the data practices in our Privacy Policy.

Paul, who didn’t immediately provide a comment, didn’t say what he plans to do with the profit.

“We plan to continue to invest in the self-storage sector,” Paul said in a release. “As a firm, we have over 2 million square feet of new self-storage developments and conversions underway nationally.”

Great Value Storage, which Paul founded in 2008, is a cornerstone of his real estate holdings and propelled his rise overseeing a multibillion dollar holding company. A spokesperson for World Class said the storage portfolio sold represented 25 percent of World Class’s overall holdings. Paul’s self-storage facilities in California and other new self-storage developments were excluded from the sale.

Read more