Before you ever sign a lease, there is one document that sets the tone for everything: the Letter of Intent (LOI). For many medical professionals, this step can feel like a formality, but it is one of the most important pieces in shaping the success of your practice’s real estate strategy. Getting the LOI right can set the stage for a smoother negotiation and a stronger outcome.
What is a Letter of Intent (LOI)?
A Letter of Intent is a written document that outlines the key terms and conditions both the landlord and tenant are negotiating. Think of it as a gentleman’s handshake on the general deal points. While typically non-binding, it provides a clear summary of the biggest items such as rental amount, lease length, tenant improvements, and other concessions before the full lease is drafted.
By putting these terms in writing early, the LOI creates an outline for the legal lease agreement to follow. It reduces uncertainty, ensures alignment between both sides, and highlights any issues before you have invested significant time and money in legal document drafting.
How an LOI is Used in Negotiations
The LOI is not just a placeholder. It is a critical negotiation tool. Here is why it matters:
- Clarity before complexity: Addressing the essential deal points first helps avoid surprises later in the process.
- Alignment check: Both landlord and tenant confirm they are on the same page before investing in attorneys and lease drafting.
- Risk reduction: Misunderstandings are minimized, saving both time and cost.
In other words, the LOI serves as the roadmap that guides the entire lease process forward. Without it, you risk walking into negotiations without direction, which can leave your practice exposed to costly mistakes.
Why It Matters for Your Practice
For medical professionals, the details of a lease have a direct impact on patient care, staff experience, and long-term financial stability. A strong LOI ensures you start with a solid foundation. With the right guidance, it is a tool to negotiate favorable terms that set your practice up for growth and security.
Moving Forward with Confidence
If you are preparing for a new lease or thinking about your next practice move, do not underestimate the importance of the LOI. At GILE, our brokers specialize in healthcare real estate and walk medical professionals through each step of the process with clarity and confidence.
Ready to start the conversation?
Contact us today to make sure your next move is built on the right foundation.
