Letter of Intent

In commercial real estate, a Letter of Intent serves as the foundation for lease negotiations. It captures the essential deal terms — including base rent, lease term, tenant improvement allowance, renewal options, and any landlord concessions — before attorneys draft the full lease document. While LOIs are typically non-binding, they establish expectations and momentum for both parties. For healthcare tenants in the Chicago suburbs, a well-crafted LOI can lock in critical provisions such as exclusivity clauses (preventing competing practices in the same building), rent-free periods during buildout, and ADA compliance responsibilities. Submitting a strong LOI signals seriousness and negotiating intent, and can prevent landlords from continuing to market the space to other prospects.

The LOI stage is where the most leverage exists for tenants. Once you move to a formal lease, terms become harder to negotiate. Healthcare operators should always have a tenant representative review the LOI before submission.

A dermatology group interested in a 4,000 sq ft space in Oak Brook submits an LOI proposing $32/sq ft base rent, a 7-year term, 4 months rent-free for buildout, and a $75/sq ft tenant improvement allowance — before any formal lease is drafted.