SEND A LETTER OF INTENT
Once a site has been identified, the next step towards finalizing a potential deal is the creation of a proposal or letter of intent (LOI). An LOI is designed to set up the basic terms under which a client is willing to enter into and finalize negotiations on a potential space. Whether a purchase and sale, lease or sublease, this is usually the starting point of negotiations, and can occur in a number of ways.
For example, if a tenant has not offered any interest or inclination towards a specific property, a landlord may opt to submit an unsolicited proposal to a prospective tenant in the market. There is some risk involved in this, as the possibility of alienating a potential future tenant with overly direct tactics is increased, but a motivated landlord may offer better terms at a slightly less desirable location.
In a buyer’s market, a request for proposal or RFP offers an advantageous position in negotiations. Sending out a request for proposal to a number of properties signifies to a potential landlord/owner that you are interested in their property, but not exclusively, and can force owners/buyers to compete for your business. This is all dependent on the ever fluctuating nature of the real estate market, however. Currently in the Puget Sound region, rents have been on the rise, and premier addresses and new constructions are being quickly leased, often before project completion.
After receiving responses to an RFP, the information will be compiled and compared to other recent sales in the area to give a broader financial picture and allow the business executive to put together an LOI to make the best offer based on the data available.
For example, if a tenant has not offered any interest or inclination towards a specific property, a landlord may opt to submit an unsolicited proposal to a prospective tenant in the market. There is some risk involved in this, as the possibility of alienating a potential future tenant with overly direct tactics is increased, but a motivated landlord may offer better terms at a slightly less desirable location.
In a buyer’s market, a request for proposal or RFP offers an advantageous position in negotiations. Sending out a request for proposal to a number of properties signifies to a potential landlord/owner that you are interested in their property, but not exclusively, and can force owners/buyers to compete for your business. This is all dependent on the ever fluctuating nature of the real estate market, however. Currently in the Puget Sound region, rents have been on the rise, and premier addresses and new constructions are being quickly leased, often before project completion.
After receiving responses to an RFP, the information will be compiled and compared to other recent sales in the area to give a broader financial picture and allow the business executive to put together an LOI to make the best offer based on the data available.