Twitter, the social media giant controlled by billionaire Elon Musk, is the target of an increasing number of disputes and legal action over an alleged refusal to pay the rent for office space it leases around the world, most recently for its corporate headquarters in San Francisco and for London space owned by King Charles's property company.
Shorenstein Properties, the owner of Twitter's headquarters at 1355 Market St., sued the tech giant for millions in unpaid rent, according to a court documents filed in San Francisco Superior Court. The landlord accuses Twitter of missing two rent payments on its flagship San Francisco space, where the company leases nearly 463,000 square feet, according to CoStar data. And Twitter is reportedly also being sued by the Crown Estate over alleged unpaid rent in the U.K. capital.
The San Francisco-based real estate investment firm said in the case involving its hometown property that Twitter has failed to pay almost $7 million in rent after missing a $3.36 million payment in December 2022 and a subsequent $3.49 million payment for January. The landlord is also looking to force Twitter to increase its security deposit by an additional $10 million, according to the lawsuit, and claims the company is required to do so under the terms of its lease agreement.
Twitter was acquired by Musk for $44 billion in late October. Since his purchase, Musk has been on an aggressive cost-cutting mission to improve the company's financial standing, laying off thousands of workers and refusing to pay overdue bills for travel and other expenses. The company has also thrown out perks and benefits, slashed travel budgets, and is even trying to auction off office fixtures, including designer furniture and commercial kitchen equipment.
The company has also been said to be withholding rent and other payments for office space it leases around the world, according to a report from the New York Times. The company hasn't paid rent for any of its offices in the U.S. or overseas, has stopped payments to vendors, and is even weighing the legal consequences for refusing to pay severance to former employees, according to the report.
Twitter declined to boost its deposit for space in the Mid-Market building when asked and said it was not obligated to do so, Shorenstein alleges. Twitter originally provided a letter of credit worth $3.63 million to serve as its security deposit for the building, one of 25 offices it leases around the world.
Twitter, which no longer has a media-relations department, did not respond to CoStar News' requests to comment. Shorenstein also did not immediately respond to requests for details about the lawsuit or its relationship with the social media company.
The Crown Estate filed a claim against Twitter in London's High Court last week, according to multiple news reports. CoStar News first reported on the potential dispute between the independent property company of the reigning British monarch and the world's second-richest man over unpaid office rent this year.
Earlier this month the company was sued by another one of its landlords, Columbia Property Trust, which claimed the social media company owes $136,260 in unpaid rent payments for space Twitter leases at 650 California St. near its San Francisco headquarters.