Twitter Lists 200K SF of NYC Office Space for Sublease

Twitter may not have to pay any more rent in NYC to Columbia Property Trust, which in January sued the social media platform for allegedly failing to pay rent at an office tower in San Francisco and two buildings in NYC’s Chelsea neighborhood owned by the REIT.

This week, Twitter listed for subleasing about 200K SF that it occupies at the two buildings in Chelsea, located at 245 and 249 W. 17^th Street in Manhattan, according to Savills data.

Elon Musk has been on a cost-cutting binge since he took over Twitter, laying off nearly half its workforce, closing a hyperscale data center and downsizing the company’s global office footprint. Most recently, Twitter laid off its entire public relations department, which occupied the buildings on W. 17^th Street.

Other tech companies have been shrinking their office footprints in NYC, including Meta, which opted out of space at Hudson Yards and on Park Avenue and backed out of a deal to lease space in a building on Broadway.

Columbia Property Trust has been trying to restructure loans that came due on an office portfolio including the two buildings on 17^th Street where Twitter has space and an office tower at 650 California Street in San Francisco, where Twitter allegedly is behind on $136K in rent payments, according to the lawsuit filed by Columbia.

Late last month, Columbia defaulted on $1.7B in floating-rate loans backed by a seven-building portfolio involving properties in New York, San Francisco, Boston and Jersey City. The total value of the portfolio, based on a 2021 appraisal, is estimated at 2.27B.

Columbia, an office REIT acquired by Pacific Investment Management (PIMCO) for $3.9B in 2021, said in a statement it is in discussions to restructure the loans with lenders including Goldman Sachs, Citigroup and Deutsche Bank.

“We, like most office owners, are addressing the unique and unprecedented challenges currently facing our asset class and customer base,” Justina Lombardo, a spokesperson for Columbia, said in a statement. “We have engaged with our lenders on a restructuring of our loan on seven properties within our larger national portfolio.”

The most valuable property in the portfolio is 650 California Street, a 60-year-old tower that the REIT acquired in 2014 for $309M. Columbia sued Twitter last month, alleging the chat platform owned the landlord more than $136K in back rent on 650 California.

A second building leased to Twitter, at 245 West 17^th Street in Manhattan, also is backed by one of the CMBS loans that have gone into default. Columbia says Twitter is behind on rent for the NYC lease.

Other Columbia office assets backed by the defaulted loans include 315 Park Avenue South and the office portion of 229 West 43^rd Street in Manhattan; 201 California Street in San Francisco; 116 Huntington Ave. in Boston; and 95 Christopher Columbus Drive in Jersey City.

The 43^rd Street tower in NYC is the former headquarters of The New York Times. Columbia acquired 481K SF of the former Times tower in 2015 for $516M.