Tech titan reaches sublease deal for big chunk of San Jose offices

SAN JOSE — A tech giant has struck a deal to sublease a big chunk of San Jose office space in a deal that, if the company expands into the new space, would represent a big economic win for the Bay Area’s largest city.

ByteDance has agreed to a sublease deal for 658,000 square feet for the entirety of two buildings in north San Jose’s Coleman Highline mixed-use complex, according to five commercial property sources who are familiar with the progress of the transaction.

The tech company, whose products include TikTok, a video-sharing and hosting social network content app, has signed a sublease agreement with a unit of Verizon, which leased the offices in 2019 and at one point had intended to place its subsidiary, famed Internet portal Yahoo, in the brand-new buildings.

The two big prime office buildings became available for sublease after Apollo Global Management, a private equity firm, bought Yahoo. Private equity firms often embark on wide-ranging attempts to cut expenses in companies they buy, including putting office buildings up for sale or offering them for sublease.

The office buildings are located at 1193 and 1199 Coleman Ave. across the street from San Jose International Airport.

Verizon has already agreed to the sublease deal, according to the sources. Two sources also said that it’s possible the sublease transaction was also being reviewed by the current owner of the buildings, AGE Equity Partners.