Elon Musk's proposed $44 billion acquisition of Twitter is fueling speculation he might relocate the social media platform's headquarters from Silicon Valley to Texas like he has with his other companies.
Texas Gov. Greg Abbott is campaigning for Twitter to relocate to the Lone Star State. Abbott, fittingly, tweeted to Musk, the world's richest person, on Tuesday: "Bring Twitter to Texas to join Tesla, SpaceX & the Boring company.”
Musk serves as CEO of electric vehicle maker Tesla, which just opened a $1.1 billion factory in southeast Austin. He relocated Tesla's headquarters to Austin in 2021 from Silicon Valley and personally moved to Texas from California in 2020. Musk is also the founder of The Boring Co., which builds tunnels and underground public transportation loops, and moved its headquarters to Central Texas last year. Musk's space exploration company, SpaceX, is based in California but has major operations in South Texas.
Whether Austin becomes the new home of Twitter is purely speculative at this point, but such a move could deliver another high-profile name to a city that's already attracted major outposts of well-known tech companies such as Apple, Google and Facebook.
“Musk’s acquisition of Twitter is potentially big news for Austin. Elon has already committed significant capital" with the Austin factory, said Alecia Schneider, managing director of real estate brokerage Savills in Austin. “Like many others, he bought into the Texas business-friendly economy. The city is ready for headquarter relocations and developments of Twitter’s scale, with numerous permits in hand for downtown and periphery markets like the booming Eastside, South Central Waterfront and South Congress.”
Twitter does not officially have an office in Texas, according to its website, with its U.S. locations in Atlanta; Boston; Boulder, Colorado; Chicago; Detroit; Los Angeles; Miami; New York City; San Francisco; San Jose, California; Seattle; and Washington, D.C. Twitter did not respond to inquiries for comment from CoStar News.
Social media platforms that have a presence in the Texas capital include TikTok and Snapchat. Facebook’s parent company, Meta, signed the second-largest lease in Austin's history at the end of last year, eating up nearly 600,000 square feet at Sixth and Guadalupe, a 66-story high-rise being built in downtown Austin.
A relocation to Texas could be a drain on San Francisco's corporate tax base if no presence is left in the city. But while Twitter employs more than 7,000 people around the world, the company's policy that allows most workers the option to remain at home means that a relocation of its offices doesn't necessarily mean employees will follow. About 2,000 people are based out of Twitter's main offices in San Francisco.
Competitive Advantage
Even so, the prospect of Twitter moving to Austin could also help the Texas capital remain competitive with other cities, especially when it comes to commercial real estate deals.
“As costs continue to rise, developers and landlords will need to be thoughtful about incentives and deal structures,” Schneider said. Austin "continues to compete with other prime tech markets like Denver, Phoenix and Seattle and is starting to lose its affordability with rising rents.”
But Twitter’s presence in California can’t be overlooked. The social media company expanded its footprint in the Bay Area — even though employees aren’t necessarily showing up at the San Francisco headquarters.
Earlier this year, Twitter leased another 80,000 square feet at its Mid-Market-area headquarters in San Francisco, boosting its existing footprint in the nearly 730,000-square-foot building at 1355 Market St. to about 380,000 square feet. The tech giant simultaneously renewed its agreement with landlord Shorenstein Properties for its headquarters space — the largest corporate office in the tech company’s portfolio — extending the term through April 2028.
The company also leases about 243,300 square feet in the adjacent office building at 1 10th St. but has been trying to land a subtenant for it since Twitter unveiled its indefinite remote-work policy in May 2020.
The expansion and renewal followed up Twitter’s decision to open its first East Bay outpost in Oakland, California, with a 66,000-square-foot lease. Once the space opens later this year, it will be Twitter’s third Bay Area office following the recent opening of its 30,000-square-foot space in San Jose.
'No One Shows Up'
While breaking those leases would be an expensive endeavor, Musk said in a now-deleted tweet from earlier in April that “no one shows up anyway” to Twitter’s San Francisco headquarters, and the billionaire is well known for his public spats with California politicians over the state’s high tax rates and unfriendly business environment.
Even so, any short-term changes to the company’s real estate portfolio in the Bay Area are unlikely.
“In terms of how the sale and taking Twitter private affects its CRE footprint, remote-first office plans and culture overall, I think it's way too early to tell,” said Marco Cugia, CoStar’s associate director of market analytics in the Bay Area. “There are several factors that have to play out, and short of an announcement from Elon or Twitter leadership, I think we just need to wait and see how the transition plays out.”
The proposed deal for Musk to acquire Twitter for $54.20 per share is expected to close sometime this year. Twitter would become a privately held company as soon as the transaction becomes final. The company is currently traded publicly on the New York Stock Exchange.
Meanwhile, at least one real estate dealmaker in Austin thinks the prospect of Twitter in Austin can't be dismissed.
"Twitter moving to Austin, in my opinion, it’s in the realm of possibility. If I have to guess, it will happen but not immediately," said Shravan Parsi, president and CEO of Austin-based real estate company American Ventures. "Texas in general and Austin in particular may provide a ton of flexibility for taking Twitter from a public company to a private company."
Twitter plans to announce its first-quarter results before markets open Thursday.