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The K&D Group, an apartment developer, bought the Halle Building and the Halle garage in downtown Cleveland from Forest City Enterprises, Inc. on Thursday. The $20 million sale sets the table for yet another office-to-residential conversion in the central business district.

(Michelle Jarboe McFee, The Plain Dealer)

CLEVELAND, Ohio -- A Northeast Ohio apartment developer has paid $20 million for downtown Cleveland's Halle Building and the nearby Halle garage, setting the table for yet another office-to-apartments conversion in the central business district.

The K&D Group, Inc. continued its downtown buying spree Thursday by purchasing the Halle properties from Forest City Enterprises, Inc. A publicly traded company, Cleveland-based Forest City has been trying to shed real estate here in favor of investments in major cities including New York and Washington, D.C.

The Halle Building is a longer-term play for K&D, the largest privately held owner of apartments in the region. The company, based in Willoughby, is wrapping up a residential conversion of the old East Ohio Building on East Ninth Street and planning an apartment project in the Leader Building on Superior Avenue. Work at the Halle Building wouldn't start until late 2018, after the Leader Building redevelopment is complete.

"Things can change, but that's the plan at this point," said Doug Price, K&D's chief executive officer. "We'd like to get Leader done and then move onto Halle."

Under K&D's plans, 240 apartments would fill most of the former Halle Bros. department store building, where 392,000 square feet of offices are roughly half full. The company would keep two floors - 60,000 square feet - of offices and attempt to fill 50,000 square feet of largely vacant retail space.

K&D expects to renovate the Halle garage, adding 80 basement spaces to the existing 600-space property. The garage improvements will start in 2016.

"Our downtown projects are doing extremely well," Karen Paganini, K&D's president, said in a written statement, "with full occupancies at the Residences at 668, the Residences at Hanna, Reserve Square and over 90 percent pre-leasing at the Residences at 1717. We couldn't be more excited than to continue this momentum with the Hall Building."

Built in the early 1900s to house the Halle Bros. store, the iconic Halle Building became offices, with lower-level retail and a food court, after the department store closed in the 1980s. Forest City has owned the property since the mid-80s and started marketing it in earnest to potential buyers or joint-venture partners in 2012.

In a news release distributed Thursday evening, Forest City said the building sale generated $8.3 million for the company. Forest City also sold off its last assisted-living property, in Florida, this week.

"These sales ... reflect continued execution of our strategy to narrow the focus [of] our operating portfolio, monetize non-core assets and use proceeds to further reduce leverage and selectively reinvest in opportunities in core markets," David LaRue, the company's president and chief executive, said in the news release.