Facing foreclosure, Pinecrest shopping center relinquished to New York lending company following coronavirus-related financial woes

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CLEVELAND, Ohio – A New York-based lender who gave a $171.5 million loan to the developers of Pinecrest in Orange now owns Northeast Ohio’s newest shopping and dining center, thanks to financial issues related to the coronavirus pandemic.

Cuyahoga County fiscal officer records show that an affiliate of Square Mile Capital Management owns the 750,000-square-foot complex as of Wednesday. The firm in January 2019 issued a loan so that Fairmount Properties and DiGeronimo Companies, which developed Pinecrest, could refinance their construction obligations.

The transfer happened “deed in lieu of foreclosure,” Orange Mayor Kathy Mulcahy said. This signals that the developers gave up the property instead of facing a foreclosure lawsuit.

Fairmount Principal Adam Fishman said in an interview Friday that the pandemic hurt the businesses within the development. Retail and brick-and-mortar storefronts across the country have told similar stories after local and state governments enacted lockdowns and restrictions on office and retail companies in March to try to prevent the needless spread of the virus.

He said Fairmount will continue to manage and oversee day-to-day operations of the property.

“We are really committed with Square Mile to continue to bring best-in-class merchants to Pinecrest even as we all learn to cope with COVID and grow through what is a difficult environment,” Fishman said.

Mulcahy said she recently met virtually with executives from Square Mile and felt that they “understood our vision” for Pinecrest.

“We the public should see nothing different, quite honestly,” she said, adding that she is happy Fairmount is still involved.

Square Mile did not immediately respond to a request for comment. A message left at DiGeronimo Companies was not immediately returned.

The shopping center, which opened in 2018, sits on 58 acres off Interstate 271 at Harvard Road. It features 400,000 square feet of high-end retail space, 160,000 square feet of office space, 87 apartment units, a park, a hotel and movie theater. Several national chains have locations there – such as Whole Foods, J. Crew and Urban Outfitters – as do Ohio-based restaurant groups such as Saucy Brew Works and Condado Tacos.

Fishman said the complex was doing well prior to the pandemic’s onset in March, but the lack of traffic to stores and restaurants in the ensuing months hurt the bottom lines. Mulcahy said the income to the village from the development has boosted its reserves and helped it weather the dip in revenue from the pandemic.

Activity has picked up following Gov. Mike DeWine’s administration lifted a lockdown order and many other restrictions regarding shopping and dining, though consumer activity has still gone up and down, Fishman said.

He said a few smaller boutique shops closed in the past several months.

Despite that, and some talk that brick-and-mortar storefronts may face additional challenges because of online stores, Fishman said he thought there was a future for a development like Pinecrest.

“We expect great things for this asset over the next several years,” he said.



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