IWG’s Regus to Activision: Pay for Santa Monica office space

Coworking firm sues game publisher over alleged $2M in owed fees

IWG's Mark Dixon and Activision's Bobby Kotick with Water Garden at 2450 Colorado Avenue
IWG's Mark Dixon and Activision's Bobby Kotick with Water Garden at 2450 Colorado Avenue (IWG, Getty, CBRE)

Coworking firm Regus is calling Activision to fulfill its duty to pay for its office space in Santa Monica. 

The IWG subsidiary sued the game house’s publishing division, claiming the firm owes $2.1 million in fees for Regus’ coworking space at the Santa Monica Water Garden office complex, according to a L.A. Superior Court complaint filed last week. IWG did not respond to a request to comment on the suit. 

“Regus’ lawsuit is a shakedown, pure and simple,” a spokesperson for Activision said in an email. “We look forward to our day in court, where we will prove that Regus actually owes Activision hundreds of thousands of dollars.”

Activision Publishing signed an agreement in October 2021 to use 78 office suites at Regus’ location at 2450 Colorado Avenue, agreeing to pay a monthly fee of $233,000, according to Regus’ complaint. The one-year deal lasted through November 2022, the lawsuit states. 

In August 2022, Activision renewed the deal through February 2023, Regus said, agreeing to pay $254,000 a month in base fees, and was in discussions for an additional three-month extension. 

An Activision spokesperson said the lease expired after Regus had offered an “exorbitant rent hike during lease extension negotiations.”

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According to the lawsuit, Regus sent Activision two options: a six-month extension with a monthly base rate of $385,000 — a 51 percent increase from the previous contract — for a one-year extension with a monthly base rate of $406,000 — a 59 percent increase.

Regus claims it sent an email to Mark Fuller, Activision’s senior director of facilities and real estate, with the renewal offers and an option to decline any extensions. In December of last year, “Activision clicked the ‘I Accept this renewal’ button and selected Regus’ offer for the six-month extension period,” Regus said in its complaint. 

Activision paid Regus $255,900 in January — a partial payment it claimed was a counteroffer for the two-month extension, according to the coworking firm, according to the suit. 

Since then, the game publisher “affirmatively represented that it would not pay any amounts” towards the six-month extension. 

“Activision breached the agreement by failing to pay the entire amount owed for the six-month license term and by repudiating the agreement,” Regus said in its complaint. 

Activision’s new Regus offices came after the firm left its 214,800-square-foot headquarters at 2850 Ocean Park Boulevard, an office campus less than two miles away. In addition to the 78 Regus spaces, the firm also subleased about 90,000 square feet at LPC West’s Pen Factory complex at 2701 Olympic Boulevard in Santa Monica. 

JPMorgan, the owner of the Santa Monica Water Garden, is currently trying to find a buyer for the property — seeking $1.4 billion for the 1.4 million-square-foot office campus.