When Elon Musk took over Xitter, he made headlines for apparently refusing to pay rent at the social media giant’s Market Street office.
Now, the company that owns the property, SRI Nine Market Square LLC, has sued X and is looking for $13.6 million to refill a line of credit, according to court filings, as the Chronicle reported.
The landlord reportedly used Xitter’s existing $3.6 million line of credit to pay the company’s rent in December of 2022 and part of January of 2023, right after Musk bought the company. SRI Nine Market Square is now looking to replenish that and increase the line of credit by an extra $10 million, which was in the original 2011 lease from when Twitter first moved into the offices at 1355 Market St., the landlord said.
X’s legal team had disputed that these claims, saying that the company did pay rent in December 2022, January 2023, and February 2023. But the New York Times reported at the time that the initial rent nonpayment was one of X’s “cost-cutting measures,” along with allegedly stiffing vendors, auctioning off office furniture, and negotiating limited severance packages to former employees.
It seems that Xitter did start paying rent on the space after all the initial chaos, because the nonpayment might have just been a negotiating tactic on Elon Musk's part to try to get better lease terms. But now such tactics are coming back to bite him: Musk reportedly tried the same tactic for X’s office space in Boulder, Colorado, and faced eviction last year, per Quartz.
But hey, sure, when you lay off more than half the company, including most of your legal team, who knows how much office space you actually need, not to mention how you’re going to hold up in court. And X is reportedly heading to trial with its SF landlord on May 6.
Previously: Twitter Reportedly Not Paying Rent as Musk Lawyers Up For That and Other Legal Battles [SFist]
Feature image of the roof of the former Twitter headquarters on July 28, 2023 in San Francisco, California. A week after X CEO Elon Musk officially rebranded Twitter as "X" and changed its iconic bird logo, an X logo was installed on the roof of the social media platform's headquarters. Photo by Justin Sullivan/Getty Images.