Several media sites confirmed Thursday that X (formerly Twitter) is looking to sublease its 74,000-square-foot headquarters at the corner of 1355 Market Street and 1 Tenth Street, suggesting the location could soon be outside of San Francisco.
That X might relocate outside of San Francisco has long been rumored, dating back to when Musk officially purchased the social media site for $44 billion in October 2022. After purchasing the company, many in Texas, including Texas Governor Greg Abbott, urged him to move the company there, similar to what he did with his electric car company Tesla. Many at the company also began to question whether X had been in San Francisco for long, as Musk often clashed with San Francisco politics. The subsequent mass layoffs at X only made people more concerned about a move.
In May 2023, Musk began hinting more seriously at such a move, and city actions against the company, such as requiring it to remove a new sign from its headquarters, only raised fears once again. In May of this year, he remained noncommittal about remaining in the city and dodged questions about whether he planned to keep X in San Francisco. That month, Musk and X made their biggest move yet by getting a company to sublease all of its office space in the city, hinting at a possible move from its headquarters, where they had been based since 2011.
A possible step for X
Although the space has not yet been listed, real estate firm JLL confirmed Thursday that X has put its 74,000-square-foot headquarters at 1355 Market Street and 1 Tenth Street up for sublease for an undisclosed amount. They did not say whether or not the company is looking for new offices in San Francisco, and hinted that X could decide to stay there part-time. Although X has previously backed off potential moves, the last time the company only considered a move across the bay to Oakland.
If X were to move out, it would likely derail San Francisco's plans to reach stable office inventory this year and prevent the city from having an even worse office inventory. In the second quarter of 2024, San Francisco slipped into the category of having 37% of all the city's office space vacancy. However, thanks to the AI boom, the city has started to stabilize this year. If X were to move out, San Francisco would likely not recover for the rest of the year because there is suddenly so much space for sale.
“The sublease announcement is very disturbing,” Anthony Ferry, a San Francisco technology consultant, told the Globe on Friday. “At least if you work for X or are in San Francisco. It indicates a major change of some kind. Best case scenario, they'll just move to other locations in the city or work from home even more. Worst case scenario, X will no longer be in the city.”
“The state would lose a lot of taxpayer money if they left California. They could hope that X would look for cheaper office space in the Bay Area, or even LA. SpaceX is down there, after all. But that's wishful thinking. If anything, Musk will probably be in Texas, probably in the Austin area. You know, but we just don't know. First, we need to find out if they're staying at their current headquarters in any capacity. Second, people need to ask Musk what his plans are now that the cat is out of the bag. But he's not talking, and there's no indication otherwise.”
“What is certain is that something big is happening.”
Further information on X-subletting is expected shortly.
