Austin developer Nate Paul just let another former asset of World Class Holdings slip through his fingers.
Weeks after Paul-affiliated Rising Tide LLC declined to close on its $39 million winning bid for 309 East Third Street, DHA Capital LLC is approved to buy the property for $20.1 million, the Austin Business Journal reports — significantly less than what it was expected to go for.
This is the second World Class bankruptcy case this month where the property went to another bidder after Paul’s Rising Tide bailed on its winning bid — and sold for much less than the original bid. Last week, Stephen Ross’ Related Companies stepped into the breach to buy a South Congress Avenue property for just $65 million after Chapter 7 Trustee Randolph N. Osherow expressed concerns about second-highest bidder NIA ATX LLC’s ability to close on its $95 million bid.
The order clearing DHA Capital to buy 309 East Third Street was signed by Bankruptcy Judge Tony Davis on September 20, after Rising Tide’s Aug. 30 court filing declining to close on its winning bid.
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The East Third Street property is across the street from the Austin Convention Center and just a few blocks from the Congress Avenue Bridge. It currently houses Brazilian steakhouse Fogo de Chão.
DHA Capital now has until October 10 to close. Sam Affanhe, the broker representing the New York-based firm in the deal, said “the money is there” to close the deal.
There’s still one hiccup. A company affiliated with real estate developer Sandy Gottesman, called 3rd TRI 2020 Ltd. has the right of first refusal to buy the property. It has until 11:59 pm on September 30 to exercise this right. While a representative for 3rd TRI 2020 told ABJ they were not in a position to comment at this time, Affanhe says DHA is attempting to work with Gottesman to involve him in a partnership that would give him a stake in any development.
ABJ also reported that DHA would likely build a vertical mixed-use development at the site, with retail on the ground floor and condos or apartments above. As for Fogo de Chão, the restaurant is “pretty far along in their plans to relocate to The Austonian” a couple of blocks away, Affanhe said.
— Maddy Sperling