From LOI to Lease: What Happens After the Deal Is Signed

In retail leasing, signing a Letter of Intent (LOI) is a major milestone—but it’s not the finish line. In reality, it marks the beginning of a detailed process that turns a negotiated deal into a fully executed lease and, ultimately, an open and operating business. Understanding what happens after the LOI is signed helps both landlords and tenants navigate the process more efficiently and avoid unnecessary delays.

Drafting the Lease Agreement

This lease expands on the business terms outlined in the LOI—such as rent, term, and use—and incorporates detailed legal language covering responsibilities, rights, and protections for both parties.This stage requires careful review. While the LOI sets the framework, the lease itself governs the relationship long-term. Key areas like maintenance obligations, insurance requirements, and assignment rights are fully defined here. Both sides work through revisions until all terms are aligned.

Tenant Due Diligence and Approvals

At the same time, tenants are often completing their due diligence. This can include reviewing site conditions, confirming utility capacity, finalizing business plans, and securing any necessary financing. For certain uses—especially restaurants, medical, or service-based tenants—additional approvals may be required. These can include permits, licenses, and municipal approvals. Coordinating these steps early helps prevent delays later in the process. Clear communication between landlords, tenants, and brokers is critical during this phase to ensure all requirements are met efficiently.

Buildout and Construction Planning

Once the lease is nearing execution, attention shifts toward buildout. For second-generation spaces, this process may be relatively quick, while new or heavily customized spaces may require more extensive planning. Tenants work with architects and contractors to design their space, submit plans, and obtain permits. Landlords may also be involved in coordinating approvals, reviewing plans, and ensuring compliance with property standards.Timing is key. The sooner construction plans are finalized and approved, the faster a tenant can begin work and move toward opening.

Lease Execution and Delivery of the Space

After negotiations are complete and all conditions are satisfied, the lease is formally executed. At this point, tenants typically provide required deposits, insurance certificates, and any remaining documentation. The landlord then delivers the space according to the agreed-upon condition—whether that’s “as-is” or with specific improvements completed. From there, construction begins, followed by inspections and final preparations for opening. This transition from paperwork to physical space is where the deal truly comes to life.

The Bigger Picture

While the LOI is an important step, the process that follows is what ultimately determines how quickly and successfully a tenant opens for business. Coordination, communication, and attention to detail at every stage are essential to keeping deals on track. At Milbrook Properties, we take a hands-on approach throughout the leasing process—from LOI to lease execution and beyond. By working closely with tenants, brokers, and contractors, we help streamline each step, minimize delays, and ensure our spaces are delivered efficiently so businesses can open and succeed as quickly as possible.