Elements Of A Letter Of Intent For A Commercial Property Deal


A letter of intent can help you when buying or leasing commercial real estate property. Below are some of the specific clauses to include in the letter of intent.


The letter of intent should contain your intention within the first paragraph. You need to specify whether you want to purchase or lease the property. After all, this is the whole purpose of writing the letter in the first place. You don't want the property owner to read deep into your letter without knowing your intentions.

Business Description

You should also include a thorough description of your business. Include the legal name of the business (in full), the state where the business is located, the ownership of the business, and other relevant factors. The description will give the property owner a good understanding of the business to help them make an informed decision. You don't want to leave something out and risk torpedoing the deal if the property owner uncovers the omission.

List of Products and Services

Include the list of products and services your business deals in. This is not just about strengthening your bid; it will help the property owner know whether they can actually lease to you. Say a property currently has a dental practice and the dentist included an anti-competition clause in their lease agreement. In such a case, the property owner will need to know the nature of your business so that they don't violate their lease agreement with the dental practice.

Business Years

It also helps to include the number of years the business has been in operation or existence. This will reveal the strength of your business and strengthen your bid for the property. A strong bid helps, especially in competitive neighborhoods or in a seller's market where property demand outweighs supply.

For example, a business that has been in operation for a decade is likely to be viewed as less likely to fail than a business that has only been operating for a year. This is especially important for lease proposals where the property owner doesn't want to risk dealing with a financially weak business.

Proposed Terms

Lastly, you also need to include the terms under which you want to purchase or lease the property. If you want to purchase the property, quote your offer, including the down payment figure if you are not proposing a cash purchase. For a lease, you should include the proposed term and rent, among other things.  


16 January 2020

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