LOI

The term LOI is used interchangeably with Letter of Intent in commercial real estate transactions. As a shorthand, LOI appears frequently in deal communications, email threads, and brokerage documents. The LOI stage typically occurs after initial property tours and preliminary interest is confirmed. It precedes formal lease drafting and serves as the negotiating framework. Healthcare tenants should be aware that while the LOI is non-binding, it sets the psychological and commercial baseline for the entire transaction. Landlords often use the LOI stage to test tenant flexibility on rent, term, and TI before engaging legal counsel. Having a tenant representative involved at the LOI stage is critical to ensuring favorable terms make it into the formal lease.

Many healthcare tenants underestimate the importance of the LOI stage. The most favorable lease terms are negotiated here — before attorneys get involved and positions harden. An experienced tenant rep can dramatically improve LOI outcomes.

After touring five properties in Oak Brook and Downers Grove, a vision care practice issues an LOI on its preferred space — locking in proposed rent, TI, and exclusivity terms before either side incurs legal fees on a full lease draft.