What is a Letter of Intent (LOI) in commercial real estate?

A Letter of Intent (LOI) is a preliminary document that outlines the major business terms of a proposed commercial real estate transaction before a formal purchase agreement or lease is prepared. It commonly addresses items such as price, financing, due diligence, closing timelines, and other key terms.

While many LOIs are non-binding, they help establish a framework for negotiations and reduce misunderstandings before legal documents are drafted. Buyers and sellers should understand the purpose and limitations of an LOI before signing one.

If you’re preparing to make an offer on commercial property, I’d be happy to explain how a Letter of Intent may fit into the overall transaction process.