SAN JOSE — A tech giant that has come under scrutiny has moved into San Jose offices where the company could employ hundreds — or even thousands — after a Silicon Valley real estate mega-deal is completed.
TikTok app owner ByteDance has moved into a large office complex that is part of the Coleman Highline mixed-use technology campus in San Jose across from the city’s airport, according to municipal officials and direct observation by this news organization of the company’s work site.
China-based ByteDance completed an agreement around September 2022 to sublease 658,000 square feet of new office space comprising the entirety of two buildings with addresses of 1193 and 1199 Coleman Avenue in San Jose.
This is potentially enough office space to accommodate 2,600 to 3,900 workers, based on typical space ratios for employees in modern office premises. The sublease was one of the largest lease deals of 2022 in Silicon Valley.
The tech giant’s TikTok app is a social media platform that allows users to host videos that can last from a few seconds to 10 minutes. The TikTok owner is also thought to be making a push into e-commerce on the platform, which has more than 1 billion users, including many high-profile celebrities.
“ByteDance has a leading platform that the community, young people and many others, are very engaged in using,” said Nanci Klein, San Jose’s director of economic development. “We welcome ByteDance to San Jose.”
The company arrives in San Jose facing significant controversy and scrutiny as it faces heightened scrutiny and concern from federal lawmakers and regulators.
In June 2022, a member of the Federal Communications Commission called on Apple and Google to remove TikTok from their app stores over US concerns. ByteDance is under pressure to allow officials with the government of China or the Chinese Communist Party to access TikTok users’ sensitive data. .
Two US senators, Mark Warner (D-Virginia) and Marco Rubio (R-Florida), in July 2022 pushed for the Federal Trade Commission to launch an investigation into ByteDance and TikTok over allegations of improper surveillance and access by Chinese government agencies.
ByteDance responded shortly after that it was taking steps to ensure that the data was protected.
“We address who has access (and why they need it) and where those people are as two critical parts of our security protocols,” Michael Beckerman, ByteDance head of public policy, Americas, said in a blog post. “Reducing employee access to US user data and reducing data transfers across regions — including to China” were among the company’s goals, Beckerman added.
Despite these uncertainties, what is clear is that ByteDance has become a major addition to San Jose’s corporate mosaic.
The company’s arrival also ends a revolving door of companies expected to occupy the space.
In 2019, Verizon Media leased the buildings and the property’s developer broke ground on the major new addition to the Coleman Highline Technology Campus. Verizon Media planned to employ about 3,400 in the two office buildings.
Then Verizon decided it would put its subsidiary Yahoo on the Coleman Highline site, a move that took on some urgency after Google bought Yahoo’s Sunnyvale headquarters and other buildings for $1 billion.
At one point, a large Yahoo sign was prominent on the roofline of one of the office buildings.
However, in 2021, those plans were abandoned after Verizon sold Yahoo to a private equity firm. Verizon then tried to sublease the Coleman Highline space since neither Verizon nor Yahoo would move into the site.
Despite the relocation options for site occupancy, it is clear that the office buildings were deemed valuable as they were fully leased on a long-term basis as a result of the original Verizon lease in 2019.
In 2021, London-based AGC Equity Partners, an investment firm, paid $780 million for the two buildings, one of the largest real estate purchases by dollar amount in the Bay Area that year.
Now a ByteDance sign is located at one of the key entrances to the ByteDance section of the Coleman Highline Campus. People can be seen arriving and leaving the employee parking garage next to the ByteDance offices.
Coleman Highline is now fully staffed and needs major tech anchors working on site. In addition to the ByteDance sublease, streaming media titan Roku leased several buildings a few years ago. Hotel rooms and housing are also being added to the Coleman Highline campus.
“The vision to have over a million square feet of development right across from the airport at the gateway to downtown San Jose has really come to fruition,” Klein said.
