TikTok is no longer trying to sublease prime office space in one of the newest towers in downtown Austin, Texas, that the global social media giant put on the sublease market just a few months ago.
TikTok has taken about 126,000 square feet on the top six floors at 300 Colorado St. off the sublease market, according to real estate professionals with direct knowledge of the situation. TikTok originally signed the lease in early 2022 but never moved into the space. TikTok hired JLL to list the space for sublease about two months ago.
TikTok's plans for the space were not immediately clear. Representatives for TikTok and its parent company ByteDance did not respond to CoStar News’ request for comment. The JLL brokers hired to sublease the space did not immediately return requests to comment.
TikTok, which lists Los Angeles and Singapore as its dual headquarters on its website, has been growing in Austin and has more than 40 job openings in the city, according to its website. ByteDance, meanwhile, says it has more than 150,000 global employees based out of nearly 120 cities, including Austin, Los Angeles, New York and Seattle in the United States.
TikTok has been committing to office space across the globe, including a lease for more than 220,000 square feet across two new offices in London and Dublin, even as other big tech companies like Google and Facebook pull back and shrink their office footprints.
Record Sublease Levels
Sublease listings have been on the rise in Austin and elsewhere across the country as companies adapt to hybrid working conditions, and an economy coping in the past year with inflation and increasing interest rates. Facebook's parent Meta has one of the biggest subleases on the market in downtown Austin at the 66-floor Sixth and Guadalupe Tower.
Sublease space in Austin has doubled since the second quarter of 2022 and now accounts "for over 18% of total vacancies, marking the highest share in the last 20 years," said Israel Linares, CoStar's market analyst for Austin.
About 19.9 million square feet of office space is vacant in Austin with 3.6 million square feet of that comprising sublet vacancies, Linares said.
Meanwhile, the tower in Austin where TikTok has decided not to sublease its space was completed in 2021. The 32-story tower is owned by Atlanta-based Cousins Properties and is 100% leased, according to CoStar data. Other tenants include several law firms such as Morrison & Foerster LLP, McGuireWoods, and Locke Lord, and tax consulting firm RSM US.
TikTok has been facing pushback from U.S. lawmakers because of security concerns tied to its parent company's connections to China. Texas Gov. Greg Abbott banned the use of TikTok for employees of state agencies on their personal and state-issued devices earlier this year.