has expanded its popular Instant Office program
, which offers flexible, move-in-ready office space, to offer free rent in exchange for equity in tenants' businesses. The new program, Oxford Instant Office Simple Agreement for Future Equity
(OXIO SAFE), is intended to assist early-stage companies that need office space, but don't have the funds for a more traditional commercial lease.
"Commercial contracts are usually very complicated and lengthy and usually run five to seven years. Most start-ups just don't have the ability to enter into these agreements," says Wonwoo Lee, Oxford Companies’ director of asset management.
Lee, who will be overseeing OXIO SAFE, adds that Oxford Companies sees the initiative as contributing to Ann Arbor's economic vitality. He explains that his organization was inspired to provide this support as a result of market research and discussions with venture capital funds and other stakeholders in the local startup environment.
"People were telling us that there was a great need for more flexibility and more simplicity," he says.
OXIO is open to startup companies that are currently working with an incubator or economic development organizations such as Ann Arbor SPARK
or the University of Michigan's Innovation Partnerships
, Desai Accelerator
, and TechArb
. The program provides six- to 12-month leases and the agreements are only six pages, in contrast to conventional leases that are often approximately 40 pages. Office space is available in various locations. Oxford Companies ensures the space is move-in ready and covers utilities and janitorial services.
Oxford is willing to provide up to a year's worth of rental offset. As a simple example, if a startup's monthly charges total $1,000, Oxford Companies will provide up to $12,000 in rent abatement. The value of that rent abatement is under a safe note, which is a simple agreement for future equity in the company.
"The concept is that if you are crunched for cash, and you need space, we'll provide it for you. You don't have to worry about paying any rent," Lee says. "It's perfect for startups and innovators who don't necessarily want to pay cash out of pocket because they really need to focus on other important things, like hiring additional staff."
Stressing that "innovation drives value," he underscores that one of his company's goals is to put productive spaces to good use and to be a valuable resource for the community.
"Oxford is an Ann Arbor-centric company. Our founder was born and raised here, and I'm also a lifer here," Lee says. "This city is our home and we hope that people take advantage of this new program that supports innovators in finding perfect spaces for congregation, innovation, and growth."
Jaishree Drepaul-Bruder is a freelance writer and editor currently based in Ann Arbor. She can be reached at email@example.com.
Photo courtesy of Oxford Companies.