Technology companies around the world are paring back their real estate expansion plans, but the efforts of social media giant TikTok to strengthen its own office holdings stands out, especially as Congress considers restrictions on how the company operates in the United States.
Los Angeles-based TikTok, owned by China-based tech company ByteDance, is preparing to take over about 57,500 square feet across two complete floors in the Moore Building along Nashville, Tennessee's famed Music Row, according to a permit request submitted with the Metropolitan Government of Nashville and Davidson County. For the past couple of years, TikTok has operated from a WeWork outpost at the One Nashville tower a roughly 10-minute drive away.
In its filing, TikTok said in finishing out the space at 827 19th Ave., it will follow a design led by global architecture firm Gensler in a project with estimated price tag of about $2.8 million. The filing is associated with TikTok's U.S. data security team in Nashville, a group responsible for maintaining the safety and privacy of its billion-plus American users.
It comes as the House voted Wednesday 352-65 to require ByteDance to sell TikTok or face a ban in the U.S. , and the measure will need Senate approval. Lawmakers have expressed concerns over TikTok functioning as an instrument for Chinese government spying efforts.
While the House Committee on Energy and Commerce unanimously passed the measure last Thursday, its fate in the Republican-controlled House is unclear. Former President Donald Trump has publicly expressed his opposition to a TikTok ban, but congressional Republicans — with some support from Democratic lawmakers — have pursued proposals that include untethering the social media platform from foreign control.
Neither TikTok nor the Moore Building's development team, a joint venture between Atlanta-based Portman Holdings and Nashville's Creed Investment, responded to CoStar News' emails or phone calls made Monday and Tuesday.
Optimistic Growth
Across the country, TikTok's real estate expansion plans come as tech companies such as Alphabet's Google, Microsoft and Meta have shrunk their own portfolios as they shift investment priorities and look to rein in extraneous expenses, dumping large swaths of unused office space around the world.
Along with the Nashville space, the company is looking to significantly expand its existing footprint in the Silicon Valley area where ByteDance already subleases just shy of 660,000 square feet at the Coleman Highline campus in San Jose, California.
Earlier this year, it completed a deal to take over an additional roughly 155,000 square feet in Bellevue, Washington, in the Seattle suburb's Lincoln Square North tower, boosting the company's regional footprint to more than 250,000 square feet as it looks to aggressively hire and build out its Pacific Northwest workforce. The deal meant TikTok backfilled space fellow tech giant Microsoft had dumped on the sublease market as part of the Redmond, Washington-based company's aggressive downsizing effort.
Of the nearly 205 million square feet of sublease space available in the United States, about 25% can be attributed to the tech industry and its efforts to trim its previously vast real estate portfolio, according to CoStar and CBRE data.
New leasing volume is about 20% below the quarterly average reported in the years leading up to the COVID-19 pandemic, according to CoStar analysis. What's more, new leases are now about 20% smaller than their pre-COVID averages, meaning companies are figuring out how to do more with less as they try to optimize their real estate and adjust to shifts in where and how often employees come to work.
Leasing activity in Nashville is faring far better than other markets across the country with office tenants last year signing on for the same amount of space as annual averages reported leading up to the pandemic, according to a CoStar analysis.
Once completed, TikTok will be the latest addition to the tenant roster at Nashville's Moore Building, one of the newest among a string of other speculatively developed office properties in the Music Row area to be completed within the past couple of years. The nearly 246,650-square-foot building — developed to cater to companies relocating and expanding from more expensive coastal markets — has already landed deals with Nashville-based legal advertising firm Whitehardt and private equity real estate firm Albany Road Real Estate Partners, which is based in Boston.
This story was updated March 13 with the U.S. House vote results.