Downtown Austin IHOP Site Sells at Foreclosure Auction

Nate Paul’s long-contested Downtown Austin IHOP property sold in a foreclosure auction bidding war after years of foreclosure delays.

Austin-based Travis County Exchange Corporation bought the 0.8-acre site at 707 East Cesar Chavez Street in Austin’s Rainey Street District on Tuesday for about $12.7 million, the Austin Business Journal reported.

Attorney William Brown of Sneed Vine & Perry PC, representing Travis County Exchange, outbid trustee Mark Riley, who was bidding on behalf of Paul’s lender, an entity associated with real estate investor Bryan Hardeman. The lender’s final bid came in at $12.7 million, roughly $5,000 below the winning offer.

At just under $13 million, the property traded for about half of its appraised value of $26.2 million, according to the Travis Central Appraisal District. The parcel is positioned as a redevelopment opportunity given its proximity to downtown and the Austin Convention Center.

Any near-term repositioning may be constrained by the existing tenant. Legal filings indicate IHOP’s lease runs until at least June 2029, timing that aligns with expectations among some local real estate professionals for a rebound in demand for new hotels, office towers or high-rise residential.

The buyer, which didn’t comment on plans for the property, is described on its website as a 1031 exchange firm led by Craig and Lauren Dunagan. Such “qualified intermediaries” facilitate tax-deferred “like-kind” exchanges under Section 1031 of the Internal Revenue Code, according to the outlet, allowing owners of investment or business real estate to defer capital gains taxes when reinvesting proceeds into similar property.

The sale is part of the unraveling of Nate Paul’s World Class Holdings, which repeatedly delayed the foreclosure. The firm shed much of its sprawling portfolio after CEO Paul was charged with bank and wire fraud in 2023. In 2025, Paul pleaded guilty to making false statements to a bank and was sentenced to five years of supervised release and a $1 million fine.

Paul isn’t the only person involved in the sale with a lengthy criminal history. Hardeman, who bought the loan on the IHOP site, was charged with arson after allegedly setting fire to properties he attempted to buy.

— Eric Weilbacher