TikTok owner moves into new San Jose offices
Hundreds could work at site rented by internet giant
A tech giant that has come under increased scrutiny in recent months has moved into San Jose offices where the company could employ hundreds or even thousands of workers after completing a Silicon Valley real estate mega-deal.
TikTok app owner ByteDance has moved into a big complex that's part of the Coleman Highline mixeduse tech campus across the street 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 a deal around September 2022 to sublease 658,000 square feet of new office space that encompasses the entirety of two buildings with addresses of 1193 and 1199 Coleman Avenue.
That's potentially enough office space to accommodate 2,600 to 3,900 workers, based on typical space ratios for employees in modern office sites. The sublease was one of the biggest rental transactions of 2022 in Silicon Valley.
The tech giant's TikTok app is a social media platform that enables users to host videos that last from several seconds to 10 minutes. TikTok's owner also is thought to be making a push into e-commerce on the platform, which has more than 1 billion users, including numerous high-profile celebrities.
“ByteDance has a leading platform in which 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.”
But the company arrives in San Jose surrounded by considerable controversy 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 U.S. 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 United States senators, Mark Warner (D-Virginia) and Marco Rubio (RFlorida), in July 2022 called on the Federal Trade Commission to conduct an investigation into ByteDance and TikTok over allegations of improper surveillance and access by Chinese government agencies.
ByteDance responded soon after that it was taking steps to ensure the data was protected.
“We are addressing 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. “Minimizing employee access to U.S. user data and minimizing 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 that were expected to occupy the space.
In 2019, Verizon Media leased the buildings and the property's developer broke ground on the huge new addition to the Coleman Highline tech campus. Verizon Media intended to employ about 3,400 in the two office buildings.
After that, Verizon decided that it would place its subsidiary Yahoo at the Coleman Highline site, a relocation that took on some urgency after Google bought Yahoo's Sunnyvale headquarters and other buildings for $1 billion.
At one point, a big Yahoo sign was perched prominently on the roofline of one of the office buildings.
In 2021, however, those plans were abandoned after Verizon sold Yahoo to a private equity firm. Verizon then sought to sublease the Coleman Highline space since neither Verizon nor Yahoo would be moving into the site.
Despite the shifting options for the occupancy of the site, the office buildings were fully leased on a longterm basis due to 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 biggest property purchases by dollar amount that year in the Bay Area.
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 at and leaving the employee parking garage next to the ByteDance offices.
Coleman Highline is now fully occupied and has two major tech anchors operating on the site.
In addition to the ByteDance sublease, streaming media titan Roku leased multiple buildings a few years ago. Hotel rooms and housing are also being added to the Coleman Highline campus.
“The vision to have well over a million square feet of development right across from the airport at the gateway to downtown San Jose has really worked out,” Klein said.