How LOIs Work in CRE
A letter of intent, or LOI, is the first real paperwork in most commercial deals, and how it is drafted often decides how smoothly the rest of the transaction moves. The LOI outlines the basic business terms, price or rent, deposit, timeline, and key contingencies, before the attorneys draft the full purchase agreement or lease. In Salt Lake City commercial real estate, where well located properties often attract multiple offers, a clean LOI signals a serious, capable party and helps an offer rise to the top. A messy LOI, on the other hand, often gets passed over even when the price is close, because sellers and landlords do not want to negotiate a moving target.
Most LOIs are considered non binding on the main business terms but binding on a few specific items, usually confidentiality and an exclusivity or no shop period. That structure lets both sides negotiate in good faith without locking into a full contract too early. A common mistake is treating the LOI as a quick formality and skipping important details. Leaving out the due diligence period, the financing contingency language, or the closing date creates fights later when each side remembers the conversation differently. Another mistake is signing an LOI with a seller who is still shopping, because without an exclusivity clause, the deal can get bid up during diligence and wind up in someone else’s hands after weeks of work.
Salt Lake City adds a few practical layers. Earnest money amounts on Wasatch Front deals have trended higher as competition has increased, especially for industrial and multifamily. Due diligence periods often need to cover a Phase I environmental, a zoning letter from the city or county, and enough time for seismic review on older downtown buildings. Utah is a non attorney closing state for most real estate transactions, which means title companies handle closings, but commercial deals still usually involve attorneys for the contract and lease work. That changes how fast documents move compared with some Midwest and East Coast markets, and buyers coming from those states sometimes need to recalibrate their expectations.
On the leasing side, LOIs cover base rent, escalations, tenant improvement allowance, free rent, personal guarantees, renewal options, permitted use, and exclusivity clauses for retail tenants. Getting those items right in the LOI keeps the formal lease draft cleaner and faster. Leaving them for later almost always means more negotiation rounds, legal cost, and sometimes a deal that stalls because the parties were never really aligned.
The best commercial realtors in Salt Lake City use the LOI to surface issues early, before expensive diligence starts. Omada Commercial drafts LOIs with clear price, deposit, inspection, financing, and closing terms, and the team flags zoning, entitlement, and lease assignment items that could derail a deal. As top commercial agents in Salt Lake City, the Omada Commercial team negotiates exclusivity, access rights, and timing that protect the buyer while still being fair to the seller. For landlords leasing space, the team uses LOIs to lock down tenant credit review, personal guarantees, tenant improvement allowance, and free rent before lease drafting begins. Clients trust Omada Commercial because the team treats the LOI as the foundation of the whole transaction, not a throwaway first step, and that approach saves real money and weeks of delay by the time closing arrives.
