A signed Letter of Intent is not a closed deal. Every broker knows this, but the implication tends to get buried under the optimism that surrounds reaching LOI. The deal feels done. It isn't. The stage between executed LOI and executed lease is, in most regional brokerage pipelines, the period of highest attrition — and most of the causes are either data-related or process-related rather than relationship-related.
Understanding where and why LOI-to-lease conversion fails helps brokerages build pipelines that don't just generate LOIs but actually close transactions.
The mechanics of LOI-to-lease attrition
When a deal dies between LOI and executed lease, the proximate cause is usually one of three things: a pricing dispute that couldn't be resolved, a counterparty who walked away, or a lease redline process that stretched beyond the tenant's patience or the landlord's flexibility window. But the underlying cause — the thing that created the conditions for the deal to fall apart — is often something more structural.
The most common structural failure we see in regional brokerage pipelines is the LOI that was submitted without adequate comp support. An LOI with a rent figure that hasn't been anchored to recent comparable transactions in the submarket is an LOI that's going to get challenged in negotiation. When the landlord's counsel pushes back on the rent ask and the tenant rep doesn't have a current, well-structured comp set to support their position, the negotiation dynamic shifts. The tenant may capitulate on a rent number that was actually achievable. Or they may pull back entirely if they feel their broker didn't do the analytical homework.
This isn't a scenario about broker capability. It's a scenario about comp turnaround time. In a fast-moving leasing market — and Las Colinas and Frisco office submarkets have both seen periods of compressed leasing velocity — the window between identifying a space and submitting an LOI can be tight. A broker who needs 2–3 hours to pull, filter, and structure a defensible comp set against deadline pressure may skip steps or submit with incomplete support.
What comp gaps look like in negotiation
Consider the specific data elements that come under scrutiny in a lease negotiation following LOI execution. The landlord's attorney will typically push on: the basis for the stated asking rent PSF, the TI allowance request relative to current market concession packages, the free rent period request, the rent escalation structure, and the operating expense pass-through treatment under NNN or modified gross lease structures.
Each of those negotiating points requires comp data to defend. What is the market rent PSF for comparable Class A space in this submarket over the last 12 months? What is the market TI allowance per square foot for new direct deals in this building class? What is the typical free rent abatement period in this leasing environment? What is the standard OpEx pass-through structure for this property type?
A broker who can answer each of those questions with specific, dated comparable transactions is in a fundamentally different negotiating position than a broker who is working from general market knowledge without documentation. The former moves toward lease execution. The latter creates delays that give the counterparty time to reconsider or find alternative options.
The pipeline visibility problem compounds the issue
Beyond the comp support gap, there's a second structural failure that drives LOI-to-lease attrition in regional brokerage pipelines: poor deal stage tracking. Most Managing Brokers at mid-sized regional firms don't have a real-time view of how many deals are currently in the LOI-to-lease stage, how long each has been there, and which ones are showing signs of stalling.
The absence of this visibility creates a specific failure mode: deals that go quiet don't get followed up on aggressively because no one is flagging them as overdue. A deal in redline negotiation that has been sitting for six weeks without a counterparty response isn't obviously different from a deal where redlines were just submitted — unless someone is actively tracking deal stage age.
In the DFW market, experienced landlord attorneys know that regional tenant rep brokerages often lack this visibility. A slow-walk on redlines is sometimes a strategic choice: wait long enough and the tenant may lose urgency, particularly if they've signed a short-term extension on their existing space. A Managing Broker who can see which deals are aging in stage can intervene — push the attorney, escalate to the principal, reset the timeline expectations. A Managing Broker who doesn't have that visibility reacts to problems rather than preventing them.
The redline phase is where TI amortization disputes emerge
One specific data-intensive dispute that emerges frequently in the LOI-to-lease stage involves TI amortization. When a landlord offers a significant tenant improvement package — say, $70–80/SF in a Class A Uptown Dallas build-out — the lease will typically include an amortization structure that recaptures the TI allowance if the tenant terminates early. The amortization rate, the interest calculation, and the trigger conditions are all negotiating points.
A broker supporting a tenant in this negotiation needs to know what current market TI allowance ranges look like for comparable deals, what the standard amortization structures are in this submarket, and whether the landlord's proposed structure is at market or aggressive. That analysis requires current transaction data — not general industry knowledge, but specific deal-level comps from the relevant submarket and building class.
We're not saying that every LOI-to-lease failure is traceable to comp data gaps. Some deals fall apart for reasons that no amount of analytical support could fix — a tenant's business circumstances change, a principal-to-principal relationship breaks down, a better space comes available. Those are real and they're not data problems. But the preventable failures — the deals that die because the comp support was thin, the pipeline wasn't monitored, or the redline response window slipped past the point of recovery — those are data and process problems that can be structurally addressed.
What stronger LOI-to-lease conversion looks like operationally
Brokerages that consistently convert LOIs to executed leases at higher rates share a few operational characteristics. They submit LOIs with comp packages attached — not as a formality, but as a genuine negotiating anchor. The comp package isn't an afterthought appended to the LOI; it's assembled before the LOI is drafted, and the rent ask is informed by it.
They track deal stage age as an active management discipline. Not just which stage a deal is in, but how long it's been there relative to the expected timeline for that deal type and submarket. When a deal goes past the expected window in LOI negotiation, someone is responsible for taking action.
And they build internal comp records that capture deal terms beyond what CoStar surfaces — particularly concession package details from deals the brokerage itself has closed. That institutional comp history becomes an analytical asset that makes every subsequent comp pull in the same submarket more accurate.
The pipeline visibility and comp accuracy problems are related. They both stem from the same underlying gap: the absence of a systematic process for connecting deal data to deal management. Building that connection is what allows a regional brokerage to consistently convert well-executed LOIs into signed leases.
If your firm is looking at ways to tighten LOI-to-lease conversion, start by auditing your last 12 months of executed LOIs: how many resulted in an executed lease, how long the average conversion took, and whether the deals that fell out had comp support or not. The pattern will tell you where to focus. Talk to the team if you'd like to work through what that looks like for your pipeline.
