News Summary
Cleveland’s K&D Group is undergoing foreclosure proceedings for Reserve Square due to financial difficulties attributed to a decline in international student occupancy. CEO Douglas E. Price III reported that occupancy rates have dropped significantly, leaving the company in a precarious financial situation despite investing over $25 million in renovations. While facing $76 million in debt, K&D is working with Fannie Mae to ensure current tenants experience minimal disruption as the property transitions. Price remains committed to enhancing downtown Cleveland’s safety and residential options.
Cleveland – The K&D Group, led by CEO Douglas E. Price III, has announced that Reserve Square, a mixed-use building in downtown Cleveland, is undergoing foreclosure proceedings due to significant financial difficulties. The company attributes the challenges primarily to a steep decline in the number of international students, particularly from India, who traditionally occupied the units. This decline has been linked to immigration policies implemented during the Trump administration, resulting in occupancy rates plummeting from 93% to below 50%. Over 400 tenants vacated the property within just six months, leading to a precarious financial situation for K&D Group.
The company has reportedly invested over $25 million in improvements in Reserve Square, which included substantial renovations to both residential units and common areas. However, K&D is now facing approximately $76 million in debt owed to Fannie Mae related to the project, encompassing the original purchase of the property and the subsequent investments made. Despite the impending foreclosure, K&D has been cooperating with Fannie Mae to manage the transition, assuring that current tenants will not face disruptions as the property is handed over to a receiver.
While K&D Group faces these challenges with Reserve Square, Price remains focused on broader goals for downtown Cleveland. He has emphasized the importance of continuing residential conversions in the area while simultaneously advocating for enhanced safety initiatives and improved resident engagement. Underlining that a thriving downtown must be both livable and secure, Price has expressed his commitment to attract both residents and investors to the region.
Price, who co-founded K&D Group with Karen M. Fanger in 1984, has helped the company become the largest privately and locally owned development and management group in Greater Cleveland. With over 40 projects under its belt—including the notable acquisition of Terminal Tower in 2016—the company is recognized for its efforts to revitalize downtown Cleveland through historic office-to-residential conversions. Price, who learned about real estate from his father, began his journey in the industry by managing an eight-unit building in Mentor, Ohio.
In recent developments, K&D has successfully navigated a higher-interest-rate environment and obtained state historic tax credits for a large adaptive reuse project at 700 Prospect Ave., known as The Electric Building. These credits are deemed crucial for preserving Cleveland’s architectural heritage amid financial challenges. Price’s leadership style champions honesty, accountability, and clarity, aimed at fostering a culture of trust and collaborative problem-solving within the organization.
Despite a challenging year, K&D’s other downtown properties, including Terminal Tower, continue to thrive without relying on the international student market for occupancy. Price’s ongoing commitment includes addressing public safety issues in downtown Cleveland. He has expressed frustration regarding escalating crime rates in the area and has sought a meeting with Mayor Justin Bibb to discuss police shortages and the necessity of increasing police presence and ensuring faster response times to crime incidents.
With upcoming goals set for 2026, Price aspires to further advance the company’s residential conversion projects while emphasizing the critical need for safety and waterfront development as key factors contributing to the economic growth of Northeast Ohio.
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Additional Resources
- Crain’s Cleveland: Doug Price
- Cleveland.com: Reserve Square Foreclosure
- Crain’s Cleveland: Reserve Square Foreclosure Details
- News 5 Cleveland: Terminal Tower Lights Up
- Cleveland.com: Wealthy Cleveland Families
- Wikipedia: Cleveland
- Google Search: Reserve Square Cleveland
- Encyclopedia Britannica: Cleveland
- Google News: Cleveland Business
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