A Chicago building that was designed by Daniel Burnham and became the famed architect’s office home has been handed back to its lender by the University of Notre Dame Investment Office, its owner since 2006.
Notre Dame on Jan. 31 gave up the 18-story Railway Exchange Building at 224 S. Michigan Ave. to the lender, a subsidiary of New York Life Insurance, according to Cook County property records.
The transaction was a deed in lieu of foreclosure, which allows a borrower and lender to agree to a voluntary handover and avoid a lengthy foreclosure suit.
It is the latest example of office property owners and lenders in Chicago and throughout the country sustaining huge losses after years of falling values and a reduction of in-person work from factors including COVID-19, corporate cutbacks on office space and higher borrowing costs for landlords.
The Railway Exchange Building is known for its terra cotta exterior and an ornate lobby beneath a soaring glass atrium.
Notre Dame and local investor Hamilton Partners bought the building for $53 million in 2006, and the university in 2015 bought out Hamilton’s interest for an undisclosed amount, according to property records and CoStar data.
It’s unclear how much debt remained on a $47.5 million loan taken out during a refinancing in early 2015.
The 121-year-old building is almost 33% vacant, according to CoStar data.
Tenants include architecture firms Skidmore Owings & Merrill and Goettsch Partners.
South Bend, Indiana-based Notre Dame previously used the building for an MBA program within its Mendoza College of Business before winding down its programs in Chicago more than a year ago.
“Notre Dame has been the proud owner of 224 S. Michigan since 2006,” a spokesperson for the university said in an email. “During that time, we and our partners enhanced the property by upgrading the building's amenities, preserving its architectural landmark standards, and attracting a diverse mix of tenants.
“Given shifting office market dynamics, we decided to wind down our ownership of the property.”
New York Life did not respond to a request for comment from CoStar News.
Daniel Burnham's creative perch
Burnham was called upon by the Santa Fe Railroad to create office space for it and other railroads, following Burnham’s design of the “White City” structures for the World’s Columbian Exposition in the late 1800s.
The Beaux Arts structure at 224 S. Michigan Ave., now overlooking Grant Park, was completed in 1904.
Burnham took an office in the building “offering commanding views of Michigan Avenue and Lake Michigan,” according to the Chicago Architecture Center.
The architect and urban planner’s famous quote remains popular in Chicago today: “Make no little plans; they have no magic to stir men’s blood.”
Burnham died in 1912.