If you knew someone was madly in love with you but you didn't feel the same way, how would you handle the situation?

This happened to me a few years ago. I slowly disconnected myself from him in hopes that he would move on. I was never rude to him. I just talked to him less and less until we didn’t speak at all. It was a little difficult for me to do this because even though I did not love him in that way, I did care for him as a friend. I recently saw him on facebook and he seems to be happy but he kind of avoids talking to me. I feel as if I lost a good friend and I wonder if I could have handled it in a different way.

Has this happened to you before? If not, how do you think you would have dealt with this situation?