Twitter Is Getting Sued Because Elon Musk Won’t Pay Its Office Rent
Twitter is being sued by its San Francisco office's landlord for a total of $136,260 in back rent.
If you’re struggling to make rent this month, you’re not alone. Apparently, even billionaires can have that problem, as a San Francisco landlord has sued Twitter for unpaid office rent. Though Twitter owner Elon Musk is the world’s second-richest person with an estimated worth of $137 billion, Bloomberg and other media outlets have reported that Twitter has failed to pay rent on many of its global offices since Musk’s takeover last fall.
The landlord is suing for $136,260 in unpaid rent for Twitter’s office inside the Hartford Building at 650 California Street, near Chinatown. The 15,500-square-foot office occupies the entire 30th floor of the 34-story building. According to the lawsuit, Twitter has sublet the space to Dentsu, a Japanese marketing and public relations company since October 2022.
The Hartford Building’s landlord, Columbia Reit – 650 California LLC, served Twitter a default notice on December 16, warning the company that it had five days to pay the rent in full. Failing to do so would break the terms of the lease. When Twitter declined to pay, it allowed the landlord to take legal action.
Legal actions include starting eviction proceedings. In addition to paying the overdue rent, Twitter would be responsible for damages related to the breach of contract. Court costs and other legal fees would also extend the amount due well over the $136,260 in back rent.
The office space involved in the lawsuit is not the home of Twitter’s headquarters. That office is also located in San Francisco, on Market Street, and occupies 379,000 square feet. Its lease doesn’t expire until 2028, but Elon Musk has been vocal about wanting to move the social media’s headquarters out of California.
According to the New York Post, the billionaire has a history of relocating firms out of California due to the state’s oppressive business regulations. Last year, Musk relocated Tesla headquarters to Austin, Texas because California had imposed COVID-19 regulations that forced businesses to shutter their factories. Republican Texas Governor Greg Abbott, said the state would welcome Twitter “with open arms” if Musk decided to move the social media company there.
Since his Twitter takeover, Elon Musk has repeatedly made headlines for taking major cost-cutting measures. He cut down on staff perks including team training events and free food. Even before he fired or laid off over half of the company’s staff, he was accused of taking a draconian approach to company management.
A report shared with the New York Times says that Musk is failing to pay rent at several locations because he is trying to renegotiate the terms of the leases. Now that Twitter’s workforce has been cut in half, Musk may be seeking smaller offices. Tech.co says that may make sense from a financial perspective considering Twitter’s financial woes, but the decision has angered the real estate companies Musk is trying to work with.
When Musk took over Twitter last October, he said the company was losing $4 million every day. Some speculate that the company’s situation has gone from bad to worse, with reports that Twitter is auctioning off office supplies to raise money. Musk is also facing the expensive legal consequences of not providing severance pay to thousands of former employees.
