Free Commercial Lease Letter of Intent Template
A tenant-side commercial lease letter of intent covering rent, free rent, TI allowance, CAM caps, term, renewal, use, exclusivity and personal guarantee limits.
A commercial lease letter of intent (LOI) summarises the key business terms of a proposed lease before the full lease is drafted. It is usually non-binding on the lease terms, but it is the best stage to negotiate rent, allowances, caps and guarantees.
Fill in this template online
Answer the blanks, choose the options, see a live preview and download your completed document. Free, no account needed.
LETTER OF INTENT: COMMERCIAL LEASE
Date: [DATE]
To: [LANDLORD NAME / BROKER], [ADDRESS]
From: [TENANT NAME], [ADDRESS]
Re: Proposed lease of [PREMISES ADDRESS, SUITE] ("Premises")
This letter sets out the principal terms on which Tenant proposes to lease the Premises. Except as stated in Section 20, it is not binding; a lease will be binding only when signed by both parties.
1. TENANT: [LEGAL ENTITY NAME].
2. PREMISES: Approximately [NUMBER] rentable square feet ([NUMBER] usable), [floor/suite], as shown in the attached plan.
3. USE: [DESCRIBE], and any lawful related use.
4. TERM: [NUMBER] years, starting on the earlier of Tenant opening for business or [NUMBER] days after delivery of the Premises with Landlord's Work complete ("Commencement Date").
5. BASE RENT: $[AMOUNT] per square foot per year [NNN / modified gross / gross], increasing [3]% annually.
6. FREE RENT: [NUMBER] months of base rent abatement [and operating expenses] after the Commencement Date.
7. OPERATING EXPENSES / CAM: Tenant pays its pro rata share ([PERCENT]%), estimated at $[AMOUNT] per square foot for [YEAR]. Increases in controllable expenses capped at [5]% per year. Exclusions include capital improvements, landlord financing and leasing costs, and costs caused by landlord negligence. Tenant may audit annually.
8. LANDLORD'S WORK: Landlord will deliver the Premises with [DESCRIBE, e.g., HVAC, electrical and plumbing in good working order, compliant with accessibility codes] at its cost.
9. TENANT IMPROVEMENT ALLOWANCE: $[AMOUNT] per square foot, paid [on completion / in progress payments]. Unused allowance may be applied to rent.
10. RENEWAL OPTIONS: [NUMBER] options of [NUMBER] years each at [95]% of fair market rent, on [6] to [12] months' notice.
11. EXCLUSIVE USE: Landlord will not lease space in the [property/center] to another tenant whose primary use is [DESCRIBE].
12. SIGNAGE: Tenant may install [building/storefront/monument] signage at its cost, subject to code.
13. PARKING: [NUMBER] spaces [reserved / unreserved] at [no charge].
14. ASSIGNMENT AND SUBLETTING: Permitted with Landlord consent, not unreasonably withheld, and permitted without consent to an affiliate or a buyer of Tenant's business.
15. PERSONAL GUARANTEE: [None / Limited to [NUMBER] months of base rent, reducing after [24] months of timely payment, with a good-guy release on [90] days' notice].
16. SECURITY DEPOSIT: $[AMOUNT], reducing to $[AMOUNT] after [12] months of timely payment.
17. CONTINGENCIES: Tenant obtaining permits and licences for its use [and financing] by [DATE].
18. RELOCATION: Landlord has no right to relocate Tenant.
19. BROKERS: [NAMES]; commissions paid by Landlord.
20. BINDING PROVISIONS: Only the following are binding: confidentiality of this letter's terms, and [exclusivity: Landlord will not negotiate with other tenants for the Premises for [30] days]. Either party may end negotiations at any time before a lease is signed.
Please confirm acceptance by signing below by [DATE].
TENANT: ______________________ Date: __________
LANDLORD: ____________________ Date: __________
---
This free template is provided by ClauseAudit for general informational purposes and is not legal advice. Have it reviewed before use. Replace all [BRACKETED] placeholders.When to use this template
- Starting negotiations on retail, office, restaurant or industrial space.
- Comparing proposals from several landlords.
- Before a landlord's lawyer drafts the full lease.
How to fill it in
- Confirm rentable vs usable square footage and the rent type (NNN, gross or modified gross).
- Ask for free rent and a tenant improvement allowance.
- Cap controllable CAM increases and list exclusions.
- Secure renewal options, exclusivity and signage.
- Limit or remove the personal guarantee.
- Keep the non-binding statement, with only confidentiality and any exclusivity binding.
Key clauses to check
- Rent structure
- NNN leases add taxes, insurance and CAM on top of base rent.
- CAM cap
- Prevents unpredictable increases in shared costs.
- TI allowance and free rent
- Often worth more than a small rent reduction.
- Personal guarantee
- Easiest to limit at the LOI stage.
- Non-binding
- Make sure the LOI does not accidentally become a binding lease.
Frequently asked questions
Is a commercial lease LOI binding?
Usually not for the lease terms, but some provisions, such as confidentiality and exclusivity, may be binding if stated.
What should a tenant ask for in an LOI?
Free rent, a TI allowance, a CAM cap, renewal options, exclusivity and a limited personal guarantee.
What is the difference between rentable and usable square feet?
Usable is the space you occupy; rentable adds a share of common areas, and rent is usually charged on rentable.
What should a commercial lease LOI include?
It should cover the premises and size, lease term, base rent and escalations, operating expenses, free rent or concessions, tenant improvement allowance, permitted use, exclusivity, renewal options, signage, parking, security deposit, personal guarantee and contingencies. It should also state that it is non-binding except for confidentiality or exclusivity terms, if any.
Can a landlord change terms after signing an LOI?
If the LOI is non-binding, either side can change terms or walk away before the lease is signed, though doing so may damage the relationship. The LOI terms are a starting point for drafting the full lease. Tenants should review the draft lease carefully to make sure agreed terms such as rent, allowances and exclusivity are carried over.
Want to check if a contract is fair before you sign?
If someone sent you a commercial lease contract, don't guess. We flag risky clauses in plain English, tuned to your state, with a downloadable report and suggested-fix redline.
Read before you sign
- Good Guy Guarantee in a Commercial Lease: How It Works, What It Covers and How to Get OneA good guy guarantee in a commercial lease limits personal liability to rent until you vacate. Learn the release conditions, traps and how to negotiate one.
- Commercial Lease Rent Escalation and Renewal Options: Fixed Bumps, CPI and Market ResetsCommercial lease rent escalation and renewal options explained: fixed vs CPI increases, caps, fair market resets, notice deadlines and what to negotiate.
- Triple Net Commercial Lease (NNN) Explained: What You Really Pay Beyond Base RentTriple net commercial lease (NNN) explained for tenants: what taxes, insurance and CAM add to base rent, how reconciliations work and which caps to negotiate.
- Commercial Lease Basics: Personal Guarantees, CAM Charges, and Everything Residential Tenants Never SeeA commercial lease plays by very different rules than a residential one. Here are the clauses that small business owners most often sign without understanding, and what to do about them.
More Business templates
This free template is general information, not legal advice, and is no substitute for a qualified attorney. Laws vary by state; have it reviewed by a lawyer before you use or sign it.