Elon Musk's decision to not pay rent on Twitter's offices is adding to commercial-mortgage headaches at Goldman Sachs

Elon Musk acquired Twitter on October 27.Getty ImagesElon Musk's decision not to pay Twitter's rent is causing pain for Goldman Sachs, the FT reported.

Goldman helped originate a $1.7 billion loan to Columbia Property, which owns many Twitter offices.

Columbia is suing Twitter, accusing the company of not paying more than $100,000 as of December.

Elon Musk's decision not to pay rent on Twitter's offices is causing pain to Goldman Sachs' commercial-mortgage portfolio.

Citing data from the Federal Deposit Insurance Corporation, the Financial Times reported this week that Goldman Sachs' banking arm saw the value of delinquent commercial-real-estate loans rise 612% to $840 million over the first quarter. That dwarfs the rise of commercial-real-estate delinquencies across the US banking industry, with bad commercial real-estate loans rising just 30% nationwide, notching $12 billion over the first quarter.

Delinquent loans – which are late on payments by a certain number of days or more – have become a growing concern in the commercial-real-estate sector as credit conditions tighten, borrowing costs rise, and prices for assets like office properties fall as remote work persists.

But the jump in Goldman Sach's bad commercial-property loans appears partly attributable to Twitter, which has reportedly not paid rent on its offices since November. Goldman is part of a group of banks that made a $1.7 billion loan to the Columbia Property Trust, a real-estate investment firm that owns several of Twitter's office spaces.

Forgoing rent payments appears to be one of the radical cost-cutting measures Musk has implemented at the company since acquiring it last year, as Twitter squares up its finances and pays off the $12.5 billion of debt Musk took out in Twitter's name to purchase the social-media platform.

Twitter is facing a lawsuit from Columbia Property that accused the company of failing to make payments on its lease and alleged that it owed more than $136,000 as of December. The lawsuit also alleged that Musk said he would only pay Twitter's rent "over his dead body."

A spokesperson from Columbia Property declined to comment on the suit. Meanwhile, Twitter, which has a policy of auto-replying to press emails with a poop emoji, did not immediately respond to a request for comment.

Read the original article on Business Insider
Click Here To Get Funded!