Negotiating the Letter of Intent on an NYC Office Lease: What to Settle First
A letter of intent, or LOI, is the short document that fixes the business terms of an office lease before the attorneys draft it: rent, term, free rent, the improvement allowance and security. It comes right after tours, once one floor is worth pursuing. Most of it is not binding, so either side can still walk away, but a landlord rarely reopens terms it has signed. Negotiate the economics here, because changing a number in an LOI takes a sentence and changing it in a lease draft takes weeks. The LOI stage usually runs one to two weeks, and the lease three to six weeks after that.
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Send me a shortlistUpdated 2026-10-03 · Nomad Group
What to settle in the LOI, and in what order
Work from the terms that carry the most money to the ones that protect you later.
- Rent and escalations. The starting rent and the annual increase, written as numbers, not as a formula to be drafted.
- Term and commencement. How long, when the lease starts, and when rent starts.
- Free rent. The months, and whether they run during the buildout or after it. Free rent covers the amounts.
- The improvement allowance or the landlord's work, tied to a stated delivery condition.
- Security. The size of the deposit, whether a letter of credit is accepted, and a burn-down.
- Options and exits. Renewal first, then expansion, sublet and assignment rights. Lease options defines each.
- Base years for operating expenses and taxes. Left out, they are set in the lease draft, where your position is weakest.
RFP first, LOI second
When more than one floor is in play, the process starts with a request for proposal. Your broker sends the same requirement to each landlord and asks for terms. The landlords reply, the offers are put on one basis, and counters go back and forth. The LOI is what gets signed with the one landlord whose deal came together.
With a single floor, the RFP is often skipped and the offer goes out as a draft LOI. Put simply, the RFP is the question sent to several buildings, and the LOI is the agreed answer from one of them.
Is the LOI binding, and can a landlord walk away?
The business terms generally do not bind either side until the lease is signed. A landlord can accept a better offer in the weeks between, and a tenant can walk too. What holds a signed LOI together is practice: it is the written record of the deal, and owners seldom retrade it.
Some paragraphs are written to bind. Confidentiality often is, and so is exclusivity, a no-shop promise that commits you to one landlord. Read those before signing, narrow or strike the exclusivity, and have your attorney confirm what the document binds you to. The letter of intent entry covers the traps.
Running LOIs with two landlords at once
Negotiating with two landlords in parallel is allowed unless you have signed an exclusivity clause that forbids it, and it is the strongest position a tenant can hold. A landlord who knows you can sign a comparable floor elsewhere counters differently. Keep the second option alive until the lease on the first is fully signed.
From signed LOI to signed lease, and the floors it could be written for
After the LOI, the landlord's attorney issues the building's form lease and yours marks it up. Three to six weeks is the usual span. A complete LOI shortens it, because the attorneys are converting agreed terms and not negotiating new ones. How long it takes to get an office sets this stage among the others.
The live block below is the set of floors an LOI could be written for now, with the asking rent each one opens at. A first offer normally opens under that figure and asks for free months and improvement money alongside.
What is on our book right now
Live from our listings · 6 of the 49, cheapest firstNomad lists 49 floors across 11 Manhattan submarkets right now, from 2,500 to 27,344 square feet. 46 publish an asking rent: $43 to $200 per square foot per year, with a median of $75.
- Floors
- 49
- Sizes
- 2,500-27,344 sq ft
- Asking rent
- $43-$200 / sq ft
- Median
- $75 / sq ft
- 213 West 35th Street, 11th Floor 6,100 sq ft $52/sq ft Penn Plaza about 35 people
- 1235 Broadway, Entire 4th Floor 9,500 sq ft $62/sq ft NoMad about 54 people
- 60 East 42nd Street, Partial 13th Floor 5,772 sq ft $72/sq ft Grand Central about 33 people
- 1450 Broadway, Entire 40th Floor 4,109 sq ft $95/sq ft Bryant Park about 23 people
- 520 Broadway, Entire 10th Floor 5,539 sq ft $125/sq ft SoHo about 32 people
- 30 West 21st Street, Entire 9th & 10th Floors 10,562 sq ft rent on request Flatiron about 60 people
The full guide
This page is the short answer. The long one, with the numbers worked through, is here:
Related topics
- NYC Office Relocation for a Growing Startup: The Decisions, in Order
- Office Relocation Timeline in NYC: Count Back From the Date That Matters
- Office Fit Out vs Refurbishment: What the Choice Changes for an NYC Tenant
- Office Tenant Buildout in NYC, Step by Step: Stages, Permits and Weeks
Which parts of a letter of intent are legally binding?
Usually only the paragraphs written to be: confidentiality, and exclusivity if there is one. The rent, term and other business terms are generally not binding until the lease is signed. Documents differ, so have your attorney confirm it on yours.
Can a landlord back out after both sides sign the LOI?
Yes, and so can the tenant. Nothing in the business terms stops a landlord from taking a better offer before the lease is signed. It is uncommon, because the signed LOI is the record of the deal, but it is the reason to keep a second floor in reserve.
How long does it take to get from an LOI to a signed lease?
Three to six weeks is typical, after one to two weeks spent agreeing the LOI itself. Reopened economics and slow replies stretch it, and a complete LOI shortens it.
Who writes the LOI, the broker or the attorney?
The broker drafts and negotiates it, since it deals in business terms. Your attorney should review it before you sign, and then takes over the lease document. How to negotiate an office lease shows which terms belong to whom.
Talk to a broker
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