Elon Musk is being blamed for screwing up Goldman Sachs’ (NYSE:GS) first quarter results for refusing to pay rent on his Twitter offices.
The Financial Times reported the financial institution was burdened by a spike in commercial real estate loan delinquencies during the quarter that was primarily fueled the Tesla (NASDAQ:TSLA) chieftain’s decision not to ignore Twitter’s responsibility to its landlords.
The value of loans to commercial real estate (CRE) borrowers behind on repayments spiked by 612% to $840 million in the first quarter, according to data filed with the Federal Deposit Insurance Corp., which is far above the 30% increase in delinquent CRE loans reported by the entire U.S. banking industry during that period.
Goldman was among a consortium of banks that loaned $1.7 billion to Columbia Property, a real estate investment trust, against seven office buildings in San Francisco and New York that include two where Twitter is a tenant. Musk stopped paying rent for the Twitter offices in November and has been sued by Columbia Property, which defaulted on its loan in February.
Despite the difficulty caused by Musk, Goldman has a lower level of CRE exposure than its big bank rivals – Bank of America (NYSE:BAC) has $60 billion and Wells Fargo (NYSE:WFC) has $91 billion.
“If you look at the entirety of our commercial real estate lending activities, our delinquency rate is below 2%,” said the company in a regulatory filing.
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