As landlords braced for a huge drop in April rent payments amid the coronavirus-fueled meltdown, Rampante Realty Partners saw that fear hit home.
The investment firm is now suing the anchor tenant at its Loop office building, Robert Morris University, for skipping out on a $1 million April rent payment, according to Crain’s.
But Covid-19 wasn’t the only factor in the university’s decision not to pay.
Robert Morris has leased 355,000 square feet at Rampante Realty’s 401 S. State St. location since 1996. The university vacated the eight-story building recently, after it was acquired by Roosevelt University.
Rampante Realty’s suit also names Roosevelt University as a defendant. As the 487,000-square-foot building’s only tenant, Robert Morris left the location empty, still owing what would amount to “tens of millions of dollars” in rent payments for the remaining four years on the lease, Crain’s cited in the lawsuit.
Rampante Realty’s suit in Cook County court comes more than a year after the investment firm listed the historic office property for $100 million. That amount is a significant markup from the company’s $68 million purchase in 2016 — it did put $5 million in improvements into the building.
Unable to unload the prime asset despite a strong office market, Rampante Realty now finds itself in hot water with creditors for its own missed April payment. The company helped pay for the building with a $48 million acquisition loan, and has skipped out on a $168,000 April debt service obligation, Crain’s reported, citing Bloomberg. Its creditors are Wells Fargo and Morrison Street Capital.
Meanwhile, Roosevelt University was given the go-ahead to purchase Robert Morris, as both schools tried to bolster their sagging enrollment and sinking financials. Chicago-based Roosevelt University in late 2018 sold off 125,000 square feet of space at the Gauge Building on Michigan Avenue to National St. Louis University for $15 million. [Crain’s] — Alexi Friedman