The parent company of one of the world's most popular social media platforms has filled one of Silicon Valley's largest sublet spaces on the market with a deal to take over two office buildings, increasing its ties to the tech-concentrated hub.

ByteDance, the tech giant that oversees TikTok, has subleased the properties at 1193 and 1199 Coleman Ave. in San Jose, California, in a move that will collectively add 658,000 square feet to its global real estate portfolio. The sublet deal with search engine company Yahoo, the buildings' primary leaseholder, is one of Silicon Valley's largest leases of the year, according to CoStar data.

The move marks a strengthened commitment to physical office space despite ongoing remote work and hybrid schedule arrangements among the region's prominent employers. CBRE — which leases space in the buildings on behalf of landlord ACG Equity Partners and marketed the Yahoo listing — confirmed the sublease arrangement.

Aside from its size, ByteDance's deal injects a dose of optimism into the nation's sublease market, which has expanded over the past couple of years as companies large and small shed space in an effort to adapt to the fast-evolving pandemic. Delayed return-to-office plans, the adoption of remote and hybrid models, an uncertain economic outlook and mounting layoffs have all contributed to record amounts of sublet space in the country's most expensive office markets.

While office sublease availability showed signs of stabilization toward the end of 2021, it has steadily climbed throughout this year to now span a record high of more than 230 million square feet across the United States, according to CoStar data. Markets including San Francisco and Silicon Valley have struggled to fill space tech companies including Twitter, Netflix, Uber, Dropbox and Salesforce have put up for sublease.

Roughly 10 million square feet of office space is available for sublease in San Francisco, according to CoStar data, an unprecedented figure that represents about 5.5% of the market's total inventory.

For ByteDance, however, Yahoo's sublet listing in North San Jose’s Coleman Highline complex provided the space the TikTok parent was looking for after months of hunting for Silicon Valley locations large enough to accommodate its South Bay operations.

The company has leased 78,000 square feet at 250 Bryant St. in nearby Mountain View for about three years, according to CoStar data, as well as a smaller office in the Seattle suburb of Bellevue, Washington. The tech company did not immediately respond to CoStar News' requests to comment.

Yahoo preleased the Coleman Highline buildings in 2019 when it was co-developing the properties alongside then-owner Hunter Properties under a lease-to-purchase arrangement. The search engine giant then backtracked on plans to occupy the space and put the properties up for sublease at about the same time that AGC Capital Partners, a London-based private equity firm, paid $780 million to acquire the development late last year.

Even with the massive sublet listing, AGC's acquisition, which equated to about $1,216 per square foot, was the priciest single office transaction in the metropolitan area's history, according to CoStar data.

The sublet deal for the properties — which completed construction last year — will kick off in February 2023, according to CoStar data. Once moved in, ByteDance will have access to nearly 55,000 square feet of amenities including a top-of-the-line fitness center, full-service restaurant and outdoor terraces.

Even with a panoply of high-profile sublet listings still sitting on the market, Silicon Valley's office market continues to strengthen well beyond pre-pandemic levels of rent growth and leasing momentum. Annual rents for high-end office space can easily surpass $100 per square foot. Average rents in the San Jose area — which encompasses the tech-concentrated Silicon Valley — are roughly $62 per square foot, according to CoStar data, making it the most expensive office market in the country.