How Long Will It Take to Get From Site Selection to a Signed Lease?

The lease schedule isn’t just a legal schedule. Due diligence, test fits, engineering, business terms and the work letter can all determine when the deal is actually ready to sign.

The company has selected its preferred building.

The broker has negotiated the major business terms.

Everyone wants to know the same thing:

“How long until we have a signed lease?”

It’s a reasonable question. It can also create a misleading project schedule if the answer is treated as simply the time required for attorneys to negotiate the document.

There may be quite a bit of work between selecting a site and being ready to execute the lease.

Site Selection Doesn’t Mean the Site Has Been Proven

The preferred building may look right during the search.

The location works. The economics appear reasonable. The available square footage fits the requirement.

But before committing to a long-term lease, the tenant may still need to determine whether the space actually works.

That can involve a test fit, architectural review, engineering due diligence, confirmation of electrical and HVAC capacity, structural or other specialty reviews, accessibility considerations, technology requirements, landlord approvals and an understanding of what the proposed improvements will cost.

The level of diligence depends on the building and the operation.

A conventional office requirement may be relatively straightforward. A healthcare facility, studio, laboratory, industrial operation or technology-intensive workplace can raise very different questions.

The important point is that site selection and site validation are not the same milestone.

The Work Letter Can Be Part of the Deal

Another schedule mistake is treating the construction requirements as something to resolve after the lease is negotiated.

• Who is performing the work?
• What is the landlord delivering?
• What is the tenant responsible for?
• What standards apply?
• How is the tenant improvement allowance funded?
• Who pays for costs above the allowance?
• What happens if landlord work is late?
• What approvals are required before construction can begin?

Those aren’t just project questions. Some belong in the lease or work letter.

If the project team doesn’t understand the intended construction scope while the transaction is being negotiated, the tenant may sign the lease and then discover that an important project assumption was never incorporated into the deal.

A Letter of Intent Isn’t the Finish Line

A well-defined letter of intent can help establish the major business terms before attorneys begin drafting and negotiating the lease.

But even a strong LOI doesn’t eliminate the work that follows.

Lease negotiations may uncover issues involving operating expenses, insurance, alterations, restoration obligations, building access, after-hours HVAC, utilities, signage, security, assignment and subletting, surrender conditions and other provisions that affect how the tenant will occupy and modify the space.

Some issues can be resolved quickly.

Others require decisions from people who weren’t initially part of the transaction.

That is why I wouldn’t promise an owner that lease execution will take a certain number of days simply because another transaction did.

Put the Lease on the Project Schedule

This becomes particularly important when the company already has a required move date.

Suppose the existing lease expires in ten months.

The project schedule shows four months for construction, so everyone assumes there is plenty of time.

But construction isn’t starting tomorrow.

The team still has to complete diligence, negotiate the lease and work letter, finish design, obtain approvals, price the work, award contracts, procure long-lead equipment and mobilize construction.

Suddenly those ten months don’t look very generous.

The lease transaction needs to be part of the same schedule as the design, construction, technology, furniture, relocation and operational activities that depend on it.

Otherwise, the project can appear to have time that doesn’t actually exist.

Faster Isn’t Always Better

There are legitimate reasons to move quickly.

The landlord may have another interested tenant. Market conditions may be changing. The business may have a hard occupancy requirement. The economics may depend on completing the transaction by a particular date.

Speed matters.

But there is a difference between moving quickly and skipping the work required to make an informed commitment.

Years ago, I wrote that completing a lease isn’t a race.

I still think that’s the right way to look at it.

The objective isn’t to produce a signed lease as quickly as possible.

The objective is to execute the right lease for a space the tenant has adequately tested, with the business and project requirements understood well enough that the owner knows what it is committing to.

Work Backward From the Required Occupancy Date

Rather than asking for an industry average between site selection and lease execution, I would build the transaction into the actual project schedule.

Start with the required occupancy date.

Then work backward through construction, procurement, permitting, design and the activities that must occur before the lease can be signed.

Ask:

What must we know about this building, this deal and this project before we’re prepared to commit?

Then assign responsibility and time to getting those answers.

That produces a much more useful schedule than assuming every lease should take 60, 90 or some other arbitrary number of days.

Leadership Takeaway: Site selection is not lease readiness. Put due diligence, test fits, engineering, the work letter and lease negotiations on the project schedule, then work backward from the required occupancy date. The owner needs to understand what must be resolved before committing—not simply how quickly everyone can get to signature.