ORANGE — Square Mile Capital Management took ownership of Pinecrest, the $230 million mixed-use district, last week through a deed in lieu of foreclosure. Square Mile is an investment firm based in New York City that loaned Pinecrest developers $170 million to relieve construction debts, Mayor Kathy Mulcahy said on Monday.
On Oct. 21, the property was transferred from Pinecrest Project Partners LLC to Square Mile Orange Village LLC, according to Cuyahoga County records. Through this procedure, the deed was transferred to the creditor rather than going through foreclosure proceedings in court. One of the former owners and partners in the development of Pinecrest is Fairmount Properties, which is headquartered at the mixed-use district at Harvard Road and Interstate 271.
“The good news is that Fairmount Properties is staying on to manage it. None of us will see any difference from an operation standpoint,” Mayor Mulcahy said. “The investor had financial resources and wherewithal to keep the center going, keep it up and improve it. We’re very comfortable that if anything survives through the pandemic, Pinecrest will.”
Pinecrest, which includes 630,000 square feet of offices, retail, apartments and a central green space, opened in the spring of 2018. It is an open-air, walkable lifestyle center with more than 50 offerings, including clothing stores, home decor shops, restaurants, a hotel and a movie theater. Pinecrest has also held various community events in the last two years, such as fall concerts, movie nights and ice skating during the holiday season.
Mayor Mulcahy said that she wishes the best to all commercial centers in the region, noting that this refinancing is not unique to Pinecrest. She said that it was only caused by the COVID-19 pandemic and Pinecrest is in a position to come out strong. The mayor described this as a “friendly transfer” because it happened easily, quietly and without litigation. This is a “best case scenario” compared to what could have happened, she said, such as the owner abandoning the mixed-use district or not keeping up with improvements.
“It’s not what we wanted, it was not planned, no one expected this,” Mayor Mulcahy said. “The pandemic is changing everything.”
Adam Fishman, principal of Fairmount Properties, said that Fairmount will continue to manage Pinecrest and their offices will remain on site. He said that Fairmount Properties is pleased to continue meeting their commitments to their merchants, tenants, residents and members of the community.
“COVID-19 has changed the landscape for all kinds of things,” he said on Monday. “The only change you should anticipate associated with this change of equity is a continued commitment of capital and a continued commitment to make Pinecrest the best in class live, work and play environment in the region.”
In December of 2019, Pinecrest was named the best new mixed-use district in North America by the International Council of Shopping Centers.
Mayor Mulcahy said that she has spoken to representatives from Square Mile Capital Management and they are committed to maximizing the value of the mixed-use center. She explained that they are obligated to the same development agreement obligations as the original owners. Square Mile officials understand the village’s vision for Pinecrest, she said, and they have the means to see it through.
“We are very enthusiastic about this investment in a diversified property with strong and stable occupancy. Pinecrest enjoys a dominant competitive position that will be enhanced as we move forward and leave current pandemic-related challenges behind,” Square Mile Capital Managing Director Charles Ochman said in a Monday press release. “We and our incredible group of tenants look forward to the inevitable growth in visitor traffic, further solidifying Pinecrest’s position as the crown jewel of mixed-use assets in this region.”
The change in ownership is not expected to impact Orange Village because Fairmount Properties will continue to manage Pinecrest, the mayor added.