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Sample Letter of Intent

Written by: Garrett Krueger

Article Overview: If you ever need to lease an office, this is a sample form for you to use.

Sample Letter of Intent

Sample Letter of Intent (LOI) or

Memorandum of Understanding (MOI)

Not legally binding but spells out the intent of the legal agreement. This is often a precursor to a lease agreement to minimize legal expense prior to reaching consensus.
Dear {Broker Name}:
We are pleased to submit the following proposal to lease for {Company Name} (Tenant). The general terms and conditions under which Landlord/Tenant will consider a lease are provided b

PREMISES:The premises shall contain approximately 1,700 rentable square feet of space located on the 2nd Floor of the office building located at 1900 Main Street, San Francisco, California, commonly known as Suite 200 (the “Premises)



TERM AND

COMMENCEMENT: The term of the lease will be for approximately Five (5) Years, commencing upon substantial completion of improvements, estimated to be April 1, 2008.



RENTAL RATE

PREMISES: The monthly base rent (“the “Monthly Base Rent”) per rentable square foot for the Premises during the lease term shall be as follows:

Months Rent
1-12 $3.10
Thereafter on the anniversary of the commencement date the Monthly Base Rent shall increase by three percent (3%).

TENANT
IMPROVEMENTS:Landlord shall construct the improvements pursuant to the attached space plan prepared by Interform Architects, entitled “2nd Floor, Suite 200,” and dated January 16, 2008. All improvements to the Premises shall be constructed using building standard materials.



RIGHT TO TERMINATE:Tenant shall have a one (1) time right to terminate the lease at the fourth anniversary of the lease term. Tenant shall provide Landlord no less than six (6) months prior written notice and shall pay Landlord a termination fee equal to the next six (6) months rent plus the unamortized tenant improvements and leasing commissions with annual interest at an annual rate of 9%. The termination fee shall be paid at the time notice is provided to Landlord.
OPERATING EXPENSES:The operating expense stop shall be established by using 2008 as the base year. If, during the Lease Term, Tenant’s proportionate share of taxes and operating expenses for the building exceeds the amount of operating expenses and taxes for 2008, Tenant shall be responsible for such excess. Operating expenses will be calculated on a grossed-up basis reflecting variable operating expenses as if the building was 95% occupied. Tenant’s exposure to this pass through shall be capped at 5% on an annual basis.

SECURITY DEPOSIT:The amount of the security deposit shall be determined upon Landlord’s review and approval of Tenant’s financial condition. Please review the two most recent years of audited financial statements attached.

RENEWAL OPTION: Tenant shall have the right to extend the lease for a period of five (5) years at 95% of Fair Market Value (FMV). Tenant will have a window to provide notice which will be from nine (9) months to three (3) months before the lease expiration.

RIGHT OF
FIRST OFFER: Tenant shall have the Right of First Offer on any neighboring spaces throughout the term of the lease.

SIGNAGE:Tenant shall have the right to one building standard directory strip on the building lobby directory and the 2nd Floor lobby directory.

PARKING:Tenant shall be entitled to one (1) unreserved parking pass at $200 per stall.

ACCESS:Tenant shall have access to the Building 24 hours per day, 7 days per week.

PROPOSAL EXPIRATION:This proposal is valid until February 4, 2008 at 5:00 p.m.

This proposal is not intended as, and does not constitute, a binding agreement by any party, nor an agreement by any party to enter into a binding agreement, but is merely intended to specify some of the proposed terms and conditions of the transaction contemplated herein. Neither party may claim any legal rights against the other by reason of the signing of this letter or by taking any action in reliance thereon. Each party hereto fully understands that no party shall have any legal obligations to the other, or with respect to the proposed transaction, unless and until all of the terms and conditions of the proposed transaction have been negotiated, agreed to by all parties and set forth in a definitive agreement which has been signed and delivered by all parties. The only legal obligations, which any party shall have, shall be those contained in such signed and delivered definitive agreement referred to above.

If you have any questions please do not hesitate to call me. If the terms provided herein are acceptable to you, please acknowledge your approval in the space provided below and prepare a lease for our review.



Sincerely,

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Article Tags: broker name, commencement date, fourth anniversary, general terms and conditions, landlord tenant, lease agreement, lease term, legal expense, letter of intent, memorandum of understanding, precursor, premises, sample letter of intent, san francisco california, space plan, square foot, standard materials, substantial completion, tenant improvements, termination fee



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