Letters of Intent in Commercial Leasing

• Posted by Geoffrey G. Gussis on June 15th, 2005


• Filed in Uncategorized

The great team at the Practising Law Institute has made another great article available - this time it covers the ins and outs of letters of intent in commercial leasing transactions.  Written by Donald Horvath
(Jenner & Block LLP) and Randal Waites (Prime Group Realty
Trust), the article contains a sample template that you can use.  PLI’s summary provides some quotes from the authors on why LOIs can be helpful in commercial lease transactions:

"LOIs can accomplish many things, but their
primary benefit is to ‘facilitate and expedite the negotiation of
the lease.’ As such, they tend to be short and sweet, as you will
see via the appendix. Think of an LOI as a sort of shorthand for
the lease, as it will contain the basics of what the lease will
cover. But, as anyone who has ever signed any lease knows, nobody
really wants to read the whole thing. You need some cheat notes
that will tell you what that tome-like document says - a successful
LOI serves that function, especially when a landlord is using a
third party broker to market space - ‘in these cases, a form LOI will
serve to provide the broker with a template for its discussions and
negotiations with other brokers and tenants, even if the landlord
does not intend to use an LOI for every lease.’ Conversely, ‘LOIs
can…be beneficial to a tenant in cases in which it knows its
space needs, but has the ability to choose among several comparable
buildings.’"

Download the article at PLI for more information.