A letter of intent sets the economics of a deal before anyone drafts the lease, and the two questions that matter are what was proposed and what already binds. Upload the LOI and get the parties, premises, proposed rent and term, TI allowance, free rent, expense structure, contingencies, and every clause marked binding versus non-binding pulled into structured fields, each citing its source page, so you can compare the LOI against the lease that follows.
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A letter of intent is supposed to be a non-binding term sheet, but parts of it bind the moment it is signed, and the economics it sets become the baseline the lease is measured against. Almost every LOI dispute traces to one of the provisions below being misread as binding when it was not, or non-binding when it was. Each row names the provision, says what it controls, and states the consequence when it is missed.
| LOI provision | What it controls | What it costs when it is missed |
|---|---|---|
| Parties, premises, and proposed term | Who the proposed tenant and landlord are, the exact space and square footage, and the proposed commencement and expiration | A square footage or term that quietly changes between the LOI and the lease reprices the whole deal, and nobody catches it without the two documents side by side |
| Proposed base rent and escalations | The starting rent, the rent schedule, and the annual escalation the parties agreed to pursue | The lease comes back with a higher starting rent or a steeper bump than the LOI proposed, and the tenant signs without noticing the drift from what was negotiated |
| Tenant improvement allowance and concessions | The TI dollars per square foot, free-rent months, moving allowance, and any other concession the landlord offered | Concessions are the most negotiated and most forgotten LOI terms. A TI allowance or free-rent period promised in the LOI that shrinks in the lease is money left on the table |
| Expense structure and pass-throughs | Whether the deal is gross, modified gross, or triple net, and the base year or expense stop proposed | An LOI that says gross and a lease that says net shifts operating costs onto the tenant. This single term can swing the effective rent by dollars per foot per year |
| Options: renewal, expansion, and termination | Any renewal option, expansion right, right of first refusal, or early termination the LOI floated | Options proposed in the LOI that never make it into the lease are lost, and a tenant that assumed a renewal right discovers at expiration it never existed |
| Binding provisions | The clauses that bind on signature: confidentiality, exclusivity or no-shop, expense allocation, and governing law | A no-shop clause a landlord thought was non-binding can block it from negotiating a backup tenant, and a binding expense clause can obligate a party to costs before any lease exists |
| Contingencies and LOI expiration | The conditions to a deal (board approval, financing, due diligence) and the date the LOI itself expires if not advanced | A lapsed LOI or an unmet contingency quietly voids the understanding, and a party that keeps negotiating on stale terms has no deal to enforce |
An LOI is short, but it sets every number the lease inherits and it hides which of its own clauses already bind. Getting it right means pulling the proposed economics and the binding provisions into a form you can check the lease against.
The proposed tenant and landlord, the exact premises and square footage, and the proposed commencement and expiration, so the LOI baseline is set before the lease is drafted.
The starting base rent, the rent schedule, and the annual escalation, captured so any drift between the LOI and the executed lease is visible at a glance.
The tenant improvement dollars per square foot, free-rent months, and other concessions, the terms most likely to shrink between the LOI and the lease if nobody is tracking them.
Whether the proposed deal is gross, modified gross, or triple net, and the base year or expense stop, which decides who carries operating costs and swings the effective rent.
The clauses that bind on signature, confidentiality, exclusivity or no-shop, expense allocation, and governing law, separated cleanly from the non-binding business proposals.
The conditions to the deal and the date the LOI expires, so nobody negotiates on a lapsed understanding or misses an unmet contingency.
From an LOI to a structured term sheet you can compare against the lease, with a source citation per field and the binding clauses flagged.
Upload the LOI, whether it is a lease LOI or a purchase LOI, along with any counter-LOI or redline exchanged. Scans and PDFs are fine.
The model returns the parties, premises, proposed rent and term, TI allowance, concessions, expense structure, options, contingencies, and every provision marked binding versus non-binding as structured fields.
Each field links to its source page. The output separates the binding provisions from the proposals, so you know your exposure on signature and you can check the lease against the LOI when it arrives.
Push the LOI terms to Excel, CSV, JSON, or the API, then abstract the executed lease and compare the two so no concession or option quietly disappears.
Last updated July 2026. What a commercial real estate LOI is, whether it is binding, what terms it sets, and why comparing the LOI against the final lease catches the concessions that go missing.
A letter of intent, or LOI, is a short document that lays out the proposed business terms of a lease or purchase before the parties spend money drafting the definitive agreement. For a lease it states the proposed premises, rent, term, tenant improvement allowance, concessions, and expense structure; for a purchase it states the price, deposit, due diligence period, and closing. Abstracting it means pulling those proposed terms, and the handful of clauses that already bind, into a structured record you can hold the final document against.
The reason an LOI deserves its own abstraction is that it is the baseline. Every number in the lease is measured against what the LOI proposed, and the terms most likely to drift, the TI allowance, the free rent, an option, are exactly the ones nobody re-checks. The question of whether it binds is covered in the explainer on what a letter of intent is in commercial real estate.
Mostly no, but partly yes. A well-drafted commercial LOI states clearly that the business terms are non-binding and no party is obligated until a definitive agreement is signed. But certain provisions are almost always made expressly binding: confidentiality, exclusivity or a no-shop period, allocation of expenses, and governing law. So the honest answer is that an LOI is a non-binding proposal wrapped around a few binding clauses, and the abstract has to separate the two so a party knows its exposure the moment it signs.
A lease LOI typically includes the parties, the premises and rentable square footage, the proposed base rent and escalation schedule, the lease term and any renewal or expansion options, the tenant improvement allowance, free rent and other concessions, the expense structure (gross, modified gross, or triple net), the security deposit, permitted use, and the conditions to signing a lease. It is the term sheet the lease is drafted from, which is why comparing the two is the highest-value check in the process.
Those proposed economics feed the same fields as a full lease abstract, so the commercial lease abstract template shows the complete field list, and the expense-structure choice ties directly to how the operating expense statement will read once the lease is live.
A non-binding provision is a proposal: a rent, a term, a concession the parties intend to pursue but are free to walk away from until the lease is signed. A binding provision is enforceable the moment the LOI is signed, regardless of whether a lease ever follows. Confidentiality, no-shop, and expense allocation are the usual binding clauses. Reading an LOI without separating the two is how a party ends up bound to a no-shop it thought was aspirational.
Because terms move between the two, and rarely in the tenant's favor. A TI allowance stated at 50 dollars per square foot in the LOI can come back at 40 in the lease; a renewal option floated in the LOI can vanish; a deal proposed as gross can be drafted as net. Abstracting both documents and laying them side by side is the only reliable way to catch the drift before signature, and it takes minutes instead of a line-by-line manual read.
Tenant-rep and landlord brokers comparing competing LOIs, acquisition teams screening purchase LOIs against their underwriting, and real estate attorneys checking that the lease honors the letter that preceded it. In-house lease administration teams also abstract LOIs to seed the lease record before the document is executed, so the file is half-built by the time the lease arrives.
Yes, and it is well suited to it because an LOI is short and structured. The model reads each LOI, returns the proposed rent, term, TI allowance, concessions, expense structure, options, contingencies, and binding provisions as structured fields, and separates what binds from what is proposed. Accuracy depends on how the LOI is written, and every published accuracy figure in this category is self-reported, so test on your own worst-drafted LOI first. The general tool is on lease abstraction software, and the diligence workflow is on lease abstraction for CRE brokers.
Still have questions? Our team is happy to help.
Talk to our teamA short document laying out the proposed business terms of a lease or purchase before the definitive agreement is drafted. For a lease it states the premises, rent, term, TI allowance, concessions, and expense structure, and it becomes the baseline the final document is measured against.
Mostly no, but partly yes. The business terms are non-binding until a lease is signed, but certain provisions are usually made expressly binding: confidentiality, exclusivity or no-shop, expense allocation, and governing law. The abstract separates the binding clauses from the proposals.
The parties, premises and square footage, proposed base rent and escalations, term and options, tenant improvement allowance, free rent and concessions, the expense structure, security deposit, permitted use, and the conditions to signing a lease.
A non-binding provision is a proposal the parties can walk away from until the lease is signed. A binding provision, such as confidentiality or a no-shop, is enforceable the moment the LOI is signed, whether or not a lease ever follows.
Because terms move between the two, rarely in the tenant's favor. A TI allowance can shrink, an option can vanish, a gross deal can be drafted as net. Abstracting both and laying them side by side catches the drift before signature.
Yes. The model reads each LOI, returns the proposed rent, term, TI allowance, concessions, expense structure, options, contingencies, and binding provisions as structured fields, and separates what binds from what is proposed. Test on your worst-drafted LOI first.
The full field list the LOI terms carry into.
Learn moreWhere the LOI expense structure shows up once the lease is live.
Learn moreCompare competing LOIs and check the lease against them.
Learn morePut the LOI expiration and option deadlines on the calendar.
Learn moreThe next document when a purchase LOI advances.
Learn moreThe full overview of our AI lease abstraction tool.
Learn more