Federal agents yesterday raided the Austin, Texas, offices of real estate firm World Class Holdings, the parent company of self-storage operator Great Value Storage. FBI and U.S. Treasury Department investigators were seen at the office at 9th and Lavaca Streets, with multiple agents carrying folders, bags and other items taken from the property, according to multiple news sources. The FBI also visited Frost Bank Tower, where World Class held office space until May, and searched the Austin home of founder and CEO Nate Paul.
Neighbors told news station KXAN that agents showed up at the house in the morning and were still loading boxes into a moving truck at 5 p.m. Sources also told KXAN a federal investigation has been underway for at least a year. As of yesterday, the FBI said no arrests had been made.
It’s unclear what aspect of World Class is under scrutiny. The multi-billion dollar holding company owns a diverse portfolio of assets and operating companies, and is parent to several subsidiaries including World Class Property Co. and World Class Capital Group LLC, which have interests in self-storage as well as industrial, multi-family, office, retail and other sectors. Neither World Class nor Paul has commented publicly on the investigation.
World Class owns more than 3 million square feet of retail space, Paul told the “American-Statesman” earlier this year. In the 2019 Inside Self-Storage Top-Operators Lists released last week, World Class ranked No. 19 among the top 100 self-storage facility owners, reporting a 75-property portfolio comprising 6.3 million net rentable square feet. In addition, the company has more than 75 million square feet of potential development in its pipeline, according to a press release.
In its Top-Operators form submission, World Class indicated it was targeting California and Texas for “extensive development.” Among the company’s current development projects is a three-story self-storage facility with a basement in Los Angeles. Once complete, it’ll comprise 188,600 rentable square feet in 2,036 climate-controlled units and 53 covered vehicle-parking spaces.
Paul, 32, founded World Class in 2007. By 2017, the company had amassed $1.2 billion in assets, according to a 2017 article published by “Forbes,” which estimated the entrepreneur’s net worth at $800 million.
In June, the Hooper Family Trust filed a lawsuit against Paul and World Class, claiming Paul lied about a property to entice the trust to invest. The 1-acre Austin site was scheduled to be auctioned on June 4 as part of foreclosure proceedings, according to a source.
In 2016, Texas investor Michael Macs sued Paul for breach of contract, fraud and misrepresentation in connection to nearly $15 million in real estate investments in California, Indiana and Texas. In 2014, Paul was sued by a group of employees from a downtown nightclub who accused him of cheating them out of tips. Both cases settled out of court, according to the “American-Statesman.”
Headquartered in Austin, World Class also has offices in Dallas, New York City and Los Angeles. Great Value’s self-storage portfolio spreads across 13 states.
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