KKR Sues Twitter for $1.3M in Back Rent on Oakland Office

Twitter is being sued again by a landlord for allegedly failing to make rent payments for one of its leased US offices—this time for office space in the Bay Area the social media platform never actually occupied.

KKR said in a lawsuit the Twitter owes it $1.3M in back rent for a 66K SF lease at its office building at 1330 Broadway in downtown Oakland.

The global investment giant, which owns the building in partnership with San Francisco developer TMG Partners, filed the complaint in Alameda Superior Court earlier this month, according to a CoStar report.

The lawsuit alleges that Twitter has failed to make payments on the Oakland office space since November, shortly after Elon Musk took over the company after initially waffling on his $44 takeover bid, then agreed to go through with it as a court proceeding began.

Twitter leased four floors in the Oakland building beginning in 2021, when the chat platform was planning to expand its office footprint from its base in San Francisco across the Bay Area. The company never occupied the space, abandoning its plans for it and listing it for subleasing shortly before Musk’s acquisition of Twitter.

Since he took over the company, Musk has initiated an ongoing cost-cutting binge that involved layoffs cutting Twitter’s workforce in half, the closure of one of its primary data centers and reducing its office footprint, including by offering several office leases, primarily in the Bay Area and NYC, for sublease.

Throughout this cost-cutting campaign, Twitter has been accused in court of failing to pay rent at most of its office sites.

In January, Columbia Property Trust 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.

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.

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.