What is a Letter of Intent (LOI)?

A Letter of Intent (LOI) is typically the first document outlining the major business terms of a proposed commercial lease before the formal lease agreement is prepared. It commonly addresses items such as rent, lease term, renewal options, tenant improvements, occupancy dates, and other key business points.

Although an LOI helps establish the framework for negotiations, the final lease agreement generally contains the detailed legal terms that govern the tenancy.

Taking time to carefully review the LOI can help identify important business issues before investing significant time and expense into drafting the lease.