Shorenstein Pays $400M Loan on Twitter HQ

Last month, Twitter made headlines when landlords in San Francisco and New York sued the social media giant for allegedly stopping its rent payments soon after Elon Musk bought the company and began a cost-cutting binge.

Now, one by one, the buildings that pair Twitter with a landlord who is suing the company are making headlines of their own. Two of them went into default last month, but it’s looking like a third will have a happier ending.

The latest building associated with Twitter to grab the spotlight is the chat platform’s headquarters in San Francisco, an Art Deco structure called Market Square but more commonly known as—have we hit 280 words?—the Twitter Building.

Shorenstein Properties was unable to refinance its $400M loan on Market Square by its original due date in September, but the company was given an extension by the lender, Barclays, and special servicer Wells Fargo until January. This week comes news that the loan has been repaid in full in time for a Jan. 9 deadline and extended.

Shorenstein and the two lenders did not disclose this week whether the loan on the Twitter HQ building was repaid via a new loan.

Market Square is made up of two side-by-side Art Deco buildings at 1355 Market Street that Shorenstein purchased in 2011 for $110M. The owner spent $300M refurbishing the buildings into a headquarters for Twitter. The two buildings, built in 1937 and 1974, originally served as homes to the Western Furniture Exchange and the Merchandise Mart.

In 2015, Shorenstein sold 98% of its interest in Market Square to JPMorgan for $900M shortly before it took at a $400M interest-only loan with Barclays.

Market Square still has Twitter’s name on it, but Musk has carved out a significant portion of its footprint along with other offices in San Francisco and New York as part of a cost-cutting binge that has included layoffs of more than half of the social media giant’s workforce and the closure of at least one of its data centers.

In January, Musk shut down four of the six floors Twitter leases at Market Square.

Columbia Property Trust in January sued Twitter 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.

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—including the two buildings in Manhattan 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.

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.

Earlier this month, 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.