The Real Deal New York

#Struggling Twitter puts two floors of Chelsea HQ on sublease market

Tech firm offering about 24K sf of growth space for short term deal

April 22, 2016 02:22PM
By Rich Bockmann

245 West 17th Street in Chelsea

245 West 17th Street in Chelsea

Twitter’s growth troubles have been a trending topic for some time, and now the company is looking to sublease some real estate it set aside for expansion at its Chelsea headquarters, sources told The Real Deal.

The micro-blogging firm is offering about 24,000 square feet on the second and third floors at its HQ at 245 West 17th Street as short term “swing space” of two to three years, and is actively in discussion with tenants, sources said.

A representative for the company declined to comment.

The space is part of a larger block of growth space Twitter has been warehousing since it signed a lease for 140,000 square feet in a pair of adjacent buildings in Midtown South back in early 2014.

Asking rents at the time were reportedly in the $70s and $80s per square foot, and according to sources Twitter is offering the space in the mid to high $60s per square foot.

Cresa’s Eric Thomas, who represented Twitter in its initial lease, is marketing the sublease space. He declined to comment.

It’s not clear how much space in the building the company is actually using, and how much is sitting empty as growth space. It’s not clear how much of the space in the buildings, which American Realty Capital’s New York REIT purchased in the summer of 2014 for $335 million.

Twitter cut 336 jobs, or 8 percent of its workforce, in October and several top executives took flight amid panic over the company’s stock price, which has fallen as the company struggles to retain users. In February company announced that monthly active users had fallen from 307 million users at the end of the third quarter to 305 million.

Facebook, by comparison, has 1.59 billion users.

In San Francisco, Twitter reportedly put a full floor at its 760,000 square-foot headquarters at 1355 market Street on the sublease market earlier this year after scrapping plans to lease an additional 100,000 square feet nearby.

The company is scheduled to release its first quarter earnings Tuesday.

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