News Summary
K&D Group is navigating significant challenges as it faces foreclosure on the Reserve Square apartment complex following a $78 million mortgage default by Fannie Mae. Despite having invested over $25 million in renovations since its acquisition in 2005, the company’s recent struggles are attributed to declining occupancy rates and a reduction in international student tenants. K&D Group plans to hand over operations to a receiver while maintaining services for current tenants and aims to continue its legacy in revitalizing Cleveland’s real estate sector through upcoming projects.
Cleveland, Ohio – K&D Group, a prominent real estate development and management firm, is facing significant challenges as it deals with the foreclosure of its Reserve Square apartment complex following a $78 million mortgage default filed by Fannie Mae. The complex, once over 90% occupied last year, has witnessed a sharp decline in occupancy rates attributed to a reduction in international student tenants.
Despite these challenges, K&D Group, co-founded by Douglas E. Price III and Karen M. Fanger in 1984, has reported success and growth in various areas. Price, who has been instrumental in revitalizing downtown Cleveland, has guided the company through a total of over 40 projects, including the high-profile acquisition of the Terminal Tower in 2016. The company has a legacy of transforming historic buildings into modern residential spaces and is noted for eight successful office-to-residential conversions.
In 2025, amidst a challenging financing environment characterized by rising interest rates, K&D successfully secured historic tax credits for the adaptive reuse of the Electric Building located at 700 Prospect Ave., a project aimed at preserving Cleveland’s architectural heritage. This venture is set to provide 120 apartments and will also accommodate a new national sports bar chain, Tom’s Watch Bar.
However, the situation surrounding the Reserve Square complex marks an unprecedented chapter in K&D’s four-decade history. Price indicated that the company plans to hand over operations of the property to a receiver, while ensuring continuity of service for existing tenants and ongoing leasing activities. This strategic move reflects K&D’s commitment to maintaining tenant relations amid the financial turbulence.
K&D has invested over $25 million in renovations since acquiring Reserve Square in 2005, but despite these efforts, the financial challenges have escalated with a current vacancy rate in downtown Cleveland reaching 10%. Additionally, new upcoming projects could further complicate market absorption, posing further challenges for the multifamily housing sector.
In looking ahead, Price has set ambitious goals for 2026, focusing on advancing residential conversions and enhancing safety and public engagement to foster downtown’s continued growth. His leadership style is based on principles of honesty, accountability, and clarity, which he believes are essential for cultivating a trustworthy environment within the team.
Price also emphasizes that enhancing safety and developing the waterfront are critical priorities for driving economic growth in Northeast Ohio. While K&D Group is navigating its current challenges, its future projects may experience a slowdown due to the overall rising costs and market conditions currently affecting the multifamily sector.
As K&D moves forward with its projects, including reopening the former United Church of Christ headquarters, the company aims to reflect creativity and resilience, ensuring its legacy in Cleveland’s real estate sector remains influential. The developments surrounding the Reserve Square and Electric Building are set to shape the future of downtown Cleveland, reinforcing the ongoing renaissance of the area.
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HERE Resources
K&D Group Faces Foreclosure of Reserve Square in Cleveland
Additional Resources
- Crain’s Cleveland: Doug Price
- Wikipedia: Foreclosure
- News 5 Cleveland: Reserve Square Foreclosure
- Google Search: Reserve Square
- WKYC: Doug Price Interview
- Google Scholar: Cleveland Real Estate
- Crain’s Cleveland: K&D Group Project
- Encyclopedia Britannica: Cleveland Real Estate
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