X Lists 800K SF San Francisco HQ for Sublease

San Francisco’s record-breaking office availability rate, which is approaching 40%, is getting larger with the addition of one of the city’s highest-profile tenants.

X, the social media platform formerly known as Twitter, has tapped JLL to market its entire 800K SF headquarters complex at 9th and Market Street for sublease, the San Francisco Chronicle reported.

The listing will include the 460K SF of office space that X occupies inside the iconic Art Deco building known as Market Square at 1355 Market Street and an attached building encompassing 330K SF at 1 Tenth Street that the company previously made available for sublease, the report said.

It is unclear whether X owner Elon Musk, who bought Twitter in 2022 for $44B, plans to uproot the platform’s HQ from San Francisco. In 2021, Musk relocated the headquarters of his EV company, Tesla, from California to Texas.

Following the Twitter acquisition, Musk launched a cost-cutting drive that laid off half of the staff at X and reduced its office footprint. A lawsuit claiming that Musk refused to pay at least $500M in severance to thousands of fired employees was dismissed by a U.S. court last week, the Chronicle reported.

In 2022, X pulled out of a 66K SF lease for a satellite office at 1330 Broadway in Oakland. The social media giant was sued last year by Market Square owner Shorenstein for allegedly falling behind on rent payments, a lawsuit that was dismissed earlier this year, the report said.

Musk has had several run-ins with San Francisco’s building department over the Market Square HQ, including his conversion of some of the office space into bedrooms for employees and the replacement of the building’s Twitter sign with a giant, illuminated metal X without proper permits.

According to the Chronicle, the JLL team is touting Market Square as “one large headquarters opportunity,” but also has indicated that X may choose to continue to occupy some of the office space there. The report also noted that emerging players in San Francisco’s booming gen AI sector have been shopping for large blocks of office space.

The listing of the X HQ, the largest block of tech space to be put up for sublease in the city, will push the total sublease availability in San Francisco back up to the record high of 9.8M SF notched a year ago. The Q2 2024 office vacancy rate in the city stands at a record 37%.