The IHOP restaurant located at 707 East Cesar Chavez Street in Austin is scheduled for a foreclosure auction on December 2. This property, appraised at $26.8 million, is one of the last underdeveloped sites in the rapidly transforming Rainey Street area, now dominated by high-rise hotels and luxury residences.
The auction comes as part of the ongoing liquidation of assets owned by Nate Paul’s World Class Holdings. The site has faced repeated foreclosure postings since a 2019 FBI raid led to significant changes for Paul’s business holdings. Previous auctions have been rescheduled, raising questions about whether the December sale will proceed as planned.
If the sale moves forward, potential buyers will be looking at one of downtown Austin’s few remaining large-scale development opportunities. The area has seen rapid population growth, with an estimated 7,500 residents expected to live in the Rainey Street Historic District and that number rising to around 10,000 when including visitors.
However, redevelopment hinges on the terms of IHOP’s lease. Neither local management nor IHOP’s corporate office commented on its duration or future plans. Developers note that an expiring lease could allow for swift redevelopment, while a longer-term agreement might require negotiation or waiting out the current contract.
Urbanspace CEO Kevin Burns stated: “The parcel is large enough to support a major high-rise.” He suggested that either a hotel or apartment building would be likely uses for the site due to its proximity to major roadways making condominiums less appealing. Brad Stein, president of Intracorp Texas, also identified hospitality and retail as suitable options but said his company does not plan to bid on the property.
Austin zoning regulations offer additional incentives for developers. By participating in the Downtown Density Bonus Program, developers could build up to a 15:1 floor-to-area ratio and bypass certain height restrictions like those imposed by Capitol View Corridor protections. Although there is currently a temporary citywide height cap of 350 feet, this can be exceeded through bonus program participation.
With construction still underway next door at Waterline—the soon-to-be tallest tower in Texas—and upgrades progressing at the nearby convention center, interest in redeveloping this corner lot remains strong among developers.
