Commercial Transactions
Letter of Intent: Agreement to Agree
The first step in solidifying terms of a commercial real estate transaction is the Letter of Intent.
The Letter of Intent (“LOI”) contains the essential terms of the transaction and is often executed before the parties negotiate terms and provisions within the contract. Key terms a prospective buyer of commercial real estate should consider include the Purchase Price, duration of Investigation Period, and the Earnest Money Deposit.
The terms should be negotiated, based on a wide variety of factors pertaining to the property condition, existing business, and potential restrictions for current use or future development, and finalized prior to signing the LOI.
Investigation of Commercial Property
Purchasers should identify the key business terms of the transaction prior to signing the Letter of Intent.
OUR CLIENTS
We represent developers, investors, and owner-operators in the acquisition and sale of a wide variety of commercial properties including multi-family housing, office buildings, shopping centers, franchised hotels, independent motels, convenience stores, and gas stations.
NEGOTIATING THE PSA
The Purchase and Sale Agreement (PSA) defines the rights and responsibilities of the parties involved and will establish the investigation timeline and notice requirements. Commercial real property agreements should be tailored to account for intended us of the property as well as existing or planned leasing and financing, or future sale of the property.
ALTA SURVEY
A prospective purchaser can ascertain the basic legal description from the county records; however, this description alone does not reveal access rights or restrictions, easements for utilities, and possible limitations for development if intended.
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Our attorneys facilitate the acquisition and sale of raw land, office, retail, industrial, multi-family, and mixed use developments.
TITLE EXAMINATION
The title search involves investigating the chain of ownership to determine whether any existing access or easement restrictions are acceptable, debt should be satisfied, or agreements of record should be amended to suit purchaser’s intended use.
ENVIRONMENTAL INSPECTION
A Phase I Environmental Site Assessment is used to determine whether property to be purchased is contaminated. If the Phase I Assessment reveals subsurface soil and groundwater contamination, further investigation may be needed.
EXISTING LEASES & CONTRACTS
Tenants’ leases should be reviewed during the due diligence period to determine the pertinent terms, enforceability, and potential exercise of renewal options. A thorough investigation should reveal major outliers to cure or waive prior to closing.