Former Robert Morris University Office in Chicago Appraised at Paltry $9.2M

A historic commercial building in Chicago that served as the home for Robert Morris University Illinois has been assessed at a value of only $9.2 million, less than a decade after its value was  appraised at $76.5 million at the time of its commercial mortgage-backed securities (CMBS) loan issuance.  

Morningstar Credit reported Thursday that 401 South State Street — a 487,022-square-foot office property in Downtown Chicago —  is now valued at far below its appraised “dark value,” meaning the building’s current value is less than what it had been valued at had it been completely empty upon securitization. 

The most recent appraisal gave 401 South State Street a dark value of $46.5 million at the time it got its CMBS loan in 2016, according to Morningstar. 

The building’s sponsor, Rampante Realty, had defaulted on its $47.8 million CMBS loan originated by Deutsche Bank (DB) in 2020. The CMBS loan secured by the building fell into special servicing during the pandemic, and the building has remained unsold after being foreclosed upon in April 2023. 

The building’s troubles began shortly after its prime tenant, Robert Morris University of Illinois,  vacated 355,000 square feet of space it had leased between 1996 and 2020. 

The eight-story building opened in 1891 and possesses a vintage facade. A renovation of the property occurred in 1997. Rampante bought the asset in 2016 for $68.1 million, put $5.5 million worth of upgrades into it, and unsuccessfully tried to sell it for $100 million in 2019, according to The Real Deal.  

Vacancy for the Downtown Chicago office sector — which encompasses neighborhood’s as diverse as River North, the Loop, the West Loop and Fulton Market — sits at a dismal 23.6 percent, according to a second-quarter analysis by CBRE.

Brian Pascus can be reached at bpascus@commercialobserver.com