How to Draft a Commercial Real Estate LOI with AI (Comp-Backed)

You have underwritten the deal, you like the basis, and now you have to put something in front of the listing broker. The letter of intent (LOI) is that something: a one or two page summary of the price and terms you are proposing, sent before anyone spends money on a purchase and sale agreement. This guide shows how to use AI to assemble a strong, comp-backed first draft of a CRE LOI from your own numbers, so the broker takes you seriously and the deal-specific terms are spelled out clearly.

The honest framing up front: AI drafts, you decide. It can turn your comp math and your assumptions into a clean recommended price, a clean term list, and a cover note a broker will actually read. It cannot invent comps, it cannot make the pricing call for you, and it is not your attorney. If you have not run the numbers yet, start with the AI underwriting walkthrough first, then come back to draft the offer. The prompts and skills referenced here ship in the free Claude Skills for Real Estate pack.

What a CRE letter of intent actually is

An LOI (sometimes called an offer letter or term sheet) states the price and the key business terms you are proposing for a specific asset. Its job is to get to a verbal yes on the headline economics before either side pays for legal drafting. The standard structure is short: a brief opening that names the property and the buyer entity, a proposed purchase price, the deposit and contingency mechanics, a closing timeline, and a sign-off. With one exception (the confidentiality and exclusivity language, which both sides may treat as binding), an LOI is non-binding: it commits no one to close. The binding contract is the purchase and sale agreement that your attorney drafts afterward. Say so plainly in the letter, and treat the points below as a way to produce a sharper draft, not as legal advice.

Where AI helps is assembly and consistency. Give it your underwriting output and your standard terms once, and it produces the same well-structured letter every time, so you are editing judgment calls instead of formatting. If you want the broader picture of what these reusable skills are, see Claude Skills for real estate investors.

The comp-backed price

The number that makes a broker take you seriously is a price you can defend. Feed the AI the comps you have gathered (recent sales of similar assets, their price per unit or per square foot, and their cap rates) and have it do the arithmetic: a recommended price range anchored to those comps, plus a sanity check against the in-place NOI you underwrote. If your offer price implies a cap rate that is out of line with the comp set, the draft should flag it, not bury it. That is the difference between an offer that reads as a number you picked and one that reads as a number the market supports.

The hard line: the AI runs the math on the comps you supply, it does not source the comps. It will not pull live CoStar or invent a sale that did not happen, and you should reject any draft that cites a comp you did not give it. Pricing judgment (where in the defensible range you actually bid, given your strategy and your read on the seller) stays with you. For investors who run this against every deal, the AI underwriting copilot keeps the comp math and the cap-rate check in one reviewed workflow.

The deal-specific business terms to specify

A strong LOI is specific where it counts. Have the draft lay out, in plain language, the terms that actually move a negotiation: the purchase price and the form of the offer (all cash, financed, or assumption of existing debt); the earnest money, meaning the deposit amount and when it goes hard; the due-diligence period, meaning how many days you need to inspect, review the rent roll and leases, and walk the site; the financing contingency, if any, and its length; the closing timeline measured from the end of due diligence; and the exclusivity or no-shop window, the one term you may want to treat as binding so the seller stops marketing while you work.

AI is good at turning your standard preferences into clean, numbered terms and at keeping them internally consistent, so the closing date and the contingency periods actually add up. The due-diligence clock is where the real work happens after the LOI is signed, so size it honestly. If you are deciding how to run that diligence, the CRE due-diligence software guide covers the tooling. And if you walked the asset before drafting, an AI summary of that visit (see turning a site-visit voice memo into an investment summary) gives you the condition notes that should shape your contingency periods.

The cover note the broker will actually read

An LOI rarely arrives alone. It travels with a short email to the listing broker, and that note is doing real work: it signals that you are a credible, closeable buyer and not a tire-kicker. Have the AI draft a few tight sentences that reference the asset, state your price and that it is comp-supported, name your proof of funds or capital source, and note your track record closing similar deals. Three or four sentences, no padding. A broker reading twenty offers will remember the one that sounds like it will actually close.

If this is an off-market approach rather than a listed deal, the note also has to establish why you are reaching out to this owner at all. That is a different sourcing motion, covered in AI owner-propensity scoring for off-market CRE.

What stays with you and your attorney

Draw the boundary clearly. AI assembles the draft; it does not give legal advice and it does not replace your attorney. The LOI itself should say it is non-binding (except for any agreed confidentiality and exclusivity terms) and subject to a definitive purchase and sale agreement. Anything with legal weight (the binding PSA, representations and warranties, indemnities, default and remedy language, title and survey mechanics, entity and tax structuring) belongs to your counsel, full stop. Do not let an AI draft talk you into binding language you did not run past a lawyer.

Pricing judgment stays with you too. The AI can show you a defensible range and flag when your number breaks from the comps, but the decision of what to bid, how hard to push on terms, and when to walk is yours. Use the draft to move faster on the mechanical parts so you spend your attention on the calls that matter.

Where to start

Start with one deal you are close to offering on. Gather your comps and your underwritten in-place NOI, then prompt the AI to produce a recommended price range with a cap-rate sanity check. Next, hand it your standard terms (deposit, due-diligence days, financing contingency, closing window, exclusivity) and have it lay them out as a clean numbered LOI. Last, ask for the three-sentence broker cover note. Edit every number, send the draft to your attorney before anything binding, and keep the pricing call yours. The reusable prompts ship in the free Claude Skills for Real Estate pack, and when the offer workflow is worth wiring into your CRM and data room, our investor AI advisory maps where it pays off first.