Coworking firm Regus renewed its lease at a downtown San Francisco location amid a legal dispute with Vornado Realty Trust.
Regus extended its lease for eight years at 505 Montgomery Street, where it has been since 2000, the San Francisco Business Times reported. It has about 30,000 square feet in the office building.
The move comes as Regus remains locked in a spat with Vornado over a lease it had signed at 345 Montgomery St., the former Bank of America Center, which it ended before taking over the space. Vornado sued Regus to enforce the $90 million 16-year lease.
A San Francisco Superior Court judge sided with Vornado in May. Lee Marshall, an attorney at Bryan Cave Leighton Paisner, the firm representing Regus, told the Business Times that the judge’s decision is being appealed.
Vornado touched on the legal dispute in its year-end 2021 financial report, saying “we are actively pursuing claims relating to the guaranty against the successor to Regus and its parent, in Luxembourg and other jurisdictions.”
Vornado said it had leased the 78,000 square-foot building to co-working company Spaces, a Regus subsidiary. Regus signed on as guarantor with obligations of up to $90 million.
Back in 2019, the two firms tried to secure permission for exterior signage at the 345 Montgomery, with the lease contingent on “securing satisfactory exterior signage,” according to the 2019 lawsuit. Regus moved to terminate the lease on Sept. 26, 2019, with Vornado saying that Regus had claimed that the planned signage was being rejected by the city based on the word of some planning officials.
After the signage was approved on Oct. 2. Regus refused to withdraw its termination, and Vornado accused it of fabricating a justification. Regus said in court filings that it had grounds to terminate the lease.
[San Francisco Business Times] — Gabriel Poblete
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