What does a letter of intent in commercial leasing represent?

A letter of intent in commercial leasing serves as a preliminary document that outlines the basic terms and conditions that the parties involved are willing to accept in a future lease agreement. It does not create a legally binding commitment to lease the property; rather, it helps establish a mutual understanding of key issues, such as rent amount, lease duration, and other essential terms that would be included in a formal lease agreement.

This document plays a critical role in the leasing process, as it allows both parties to negotiate and clarify their intentions before expending resources on drafting and signing a comprehensive lease. Establishing the framework through a letter of intent can facilitate smoother negotiations and help both parties identify any significant issues that may need to be addressed before finalizing a formal lease agreement.