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ByteDance, the Chinese company that owns TikTok, took over one of Silicon Valley’s biggest chunks of available sublease space, signing on for 658K SF in two office buildings in San Jose.
The company subleased properties at 1193 and 1199 Coleman Ave. from Yahoo, The Registry reported. The transaction is one of the largest office leases signed so far this year, as tech companies’ affinity for remote work kept a lid on leasing velocity across most of the Bay Area.
The size of this lease alone is more than triple the total leasing activity so far this year in the San Jose airport submarket, where the property is located, according to Cushman & Wakefield’s second-quarter 2022 Silicon Valley office market report.
San Jose’s airport market is on the smaller side as office inventories go in Silicon Valley, with 5.2M SF of total product. In the first two quarters of the year, the area experienced negative absorption totaling just over 146K SF, increasing the overall vacancy rate to 27.3%.
ByteDance has spent the last two years expanding its physical presence in the U.S. and abroad, including opening its first Washington, D.C., office late last year and completing a 2.6M SF sale and lease transaction in Shanghai.
The persistent popularity of video sharing app TikTok keeps the money flowing for ByteDance. TikTok brought in nearly $4B in revenue in 2021 and is on track to triple that this year. That revenue stream makes TikTok bigger than its predecessors Twitter and Snap combined, according to Bloomberg.
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