Lease Process GuideSubmit Proposal

During this step, the real estate agents and the tenant team develop and prepare the Request for Proposal (RFP) for the office space. The formalized RFP formally compiles the many considerations a tenant might have. It should be customized to reflect a tenant’s specific needs (for new office spaces).

Just as the office space’s standard form lease document represents the landlord’s “wish list”, the RFP serves in that same capacity for the tenant. Most major office space lease negotiations are founded upon an RFP, which might later result in a letter of intent or statement of terms for the office space. The importance of initially dealing with all items of significance in the RFP cannot be overemphasized, from both the landlord’s and the tenant’s positions.

The RFP – once presented for the office space – becomes the basis for a systematic procedure used to document the lease negotiation and maintain a focus on unresolved issues between the parties.

It’s important to consider these factors for the RFP, as well:

1. The parties’ negotiating leverage will be reduced if provisions for office space, such as options to extend or terminate, liability limitations, escalation and security deposit provisions, rights of first refusal, and other items of significance, are not included in the RFP or letter of intent for the office space.
2. It often serves both the landlord’s and the office space tenant’s interests to spend the extra time on the detail of the RFP and/or letter of intent. This can serve to minimize the misunderstandings that might otherwise crop up during the course of negotiations, together with the associated cost of office space attorneys and other parties to the process.
3. In order to ensure that an RFP or letter of intent not be binding for a particular office space, the document should clarify it imposes no legal obligation to continue negotiations to reach agreement for the office space. One approach that often finds favor is to provide that the parties are obligated to negotiate in good faith for the office space, but that if no formal agreement is reached within a proscribed period of time, either party may terminate the negotiations.