TikTok parent company ByteDance is in talks with Yahoo to sublease its entire San Jose campus, a potential deal that would take more than 650,000 square feet of new office space off the city’s market.
Beijing-based ByteDance is looking closely at subleasing the entire three-building property at 1189, 1193 and 1199 Coleman Avenue in North San Jose, a broker with direct knowledge but no involvement in negotiations told The Real Deal. Four other brokers and developers with indirect knowledge told The Real Deal they were aware of talks between Yahoo and ByteDance. The Coleman Avenue campus is the likely candidate among several properties ByteDance is considering in Silicon Valley, the sources indicated.
The centerpiece of the campus’ centerpiece is an eight-story, almost 604,000-square-foot Class A building completed with the rest of the complex in the fourth quarter of last year. Yahoo began leasing it upon its completion, with a deal that runs through May 31, 2037, according to an offering memorandum for the property obtained by The Real Deal last year. That memo marketed the campus for sale before AGC Equity Partners acquired it for $780 million, or about $1,216 a square foot, in a deal that closed in December.
ByteDance and TikTok didn’t respond to requests for comment. JLL’s Bart Lammersen, who three people with direct and indirect knowledge said is representing ByteDance in its search for a Silicon Valley campus, could not be reached. CBRE, which serves as Yahoo’s tenant representation broker and its San Jose campus’ listing agent, told The Real Deal that the property is available for sublease before declining further comment. AGC, meantime, didn’t respond to a request for comment.
If completed, the deal would represent one of the largest takedowns of a Silicon Valley office property in years. ByteDance would probably occupy the entire San Jose campus in phases rather than all at once, multiple sources said. It’s looking at taking the entire complex regardless of timing, the same sources said, a substantial bet not only on the future of the office but also on North San Jose.
ByteDance’s space requirement is estimated to range between 500,000 and 700,000 square feet, sources said. The latter number is more than double what it was in late October, when Boston Properties CEO Owen Thomas said the company was searching for between 250,000 and 300,000 square feet in Silicon Valley. It’s also six times larger than ByteDance’s only current office in the region, a 78,000-square-foot space in Mountain View that it’s subleasing from WhatsApp through 2025, according to CompStak data.
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