Elon Musk's X is looking to give up a large swath of office space at its San Francisco headquarters, further decreasing the company's presence in the city and dealing a blow to the struggling downtown real estate market.
The social-media company hired Jones Lang LaSalle Inc. to market about 460,000 square feet (42,700 square meters) for sublease at its 1355 Market St. headquarters, according to the San Francisco Chronicle. That adds to about 330,000 square feet that the company previously made available in an adjacent building.
A JLL spokesman confirmed that X was giving up 'excess space' at 1355 Market and all of the space at the adjacent building, One Tenth St. He declined to say how much the company still planned to occupy at the complex, located in San Francisco's Mid-Market neighborhood
X didn't respond to a request for comment. The company, then known as Twitter Inc., had about 800,000 square feet leased at its headquarters prior to the Covid-19 pandemic, according to a corporate filing in 2020.
Musk, who acquired X in 2022, has criticized San Francisco — at one point offhandedly suggesting that the Market Street building could be turned into a homeless shelter — as well as California, and moved Tesla Inc.'s headquarters from Silicon Valley to Austin in 2021. Yet he also has touted the importance of offices: His first email to staff after acquiring Twitter was to end remote work.
Twitter agreed to move into the Mid-Market neighborhood in 2011 after the platform, along with other tech companies, received a special tax break. For a time, the area flourished with office workers, busy restaurants and new apartment complexes.
But the neighborhood is now struggling as the city copes with the slow return of workers. While the artificial intelligence boom has helped revive the area, San Francisco still has the highest office-vacancy rate among large US metro areas, at more than 36 per cent, according to data compiled by CBRE.
