Only about 250 students were in the dorm at the time, but all were evacuated - many wearing nothing more than sleepwear and flip-flops on their feet, said Carise Mitch, communications director for the Institute.
"We went out and bought a lot of socks because a lot of students went out in their flip-flops," she said.
"Many students couldn't attend their culinary classes because they didn't have the right footwear.
"They brought their knives but not their shoes."
Fire Department personnel logged a "relatively high" carbon monoxide reading of 300 parts per million in the building's basement, Davison said, noting that more than 35 parts per million is considered dangerous.
Three female students were taken to area hospitals with symptoms of carbon-monoxide poisoning but all were listed in stable condition, he said.
The source of the carbon monoxide was determined to be a malfunctioning heater for the Capitol Grille, according to the Fire Department.
The city Department of Licenses & Inspections issued a cease-operations order for the building and both restaurants after finding "very serious infractions," L&I spokeswoman Maura Kennedy said.
"There were violations for nonworking heat and the fire-alarm systems did not respond appropriately," she said.
The cease-operations order is expected to remain in effect for two to four days or until all violations are fixed, she said.
The students, who are all being put up in area hotels by the Institute, were allowed to return briefly to the dorms to grab necessary items, Mitch said.