You've signed the letter of intent. Here's what the next 30-45 days actually look like.
Most operators who sign a sale-leaseback LOI have never been through the process before. The LOI commits them to an exclusivity period — typically 30-60 days — during which the buyer conducts due diligence and both parties work toward closing. What happens during those weeks is often opaque.
The opacity creates anxiety. Operators wonder whether silence means the deal is on track or whether something is wrong. They receive diligence requests without context for why each item matters. They don't know what "closing" involves until they're in it.
Here's what the process actually looks like, week by week, on a clean deal with a prepared operator.
Week 1: Diligence kickoff and document requests
The LOI is signed. The exclusivity clock starts. In the first week, the buyer sends a due diligence checklist — a list of documents and information needed to complete underwriting.
A typical diligence request list includes:
Financial documents:
- Three years of business tax returns (entity level)
- Three years of unit-level P&L statements, ideally with monthly detail
- Trailing 12-month P&L, current through the most recent period
- Most recent balance sheet
Real estate documents:
- Existing title commitment or owner's policy
- Existing survey (if available)
- Existing Phase I environmental assessment (if available)
- Existing appraisal (if available)
- Copies of any existing leases, easements, or encumbrances on the property
- Utility bills for the past 12 months
Business/legal documents:
- Operating entity formation documents (articles, operating agreement)
- Any existing loan documents on the property (mortgages, liens)
- Franchise agreement (for franchise operators)
- Any existing equipment leases or material contracts tied to the location
What the operator should do in Week 1: Designate one person on your team as the diligence coordinator. Gather everything on the checklist simultaneously, not sequentially. The operators who move fastest in diligence are the ones who treat the document request as a fire drill, not a gradual accumulation. Every day of delay in providing documents is a day of delay on the closing timeline.
Weeks 1-2: Title and environmental ordered
Concurrent with the document request, the buyer orders two third-party reports that run on their own timeline and don't wait for operator documents.
Title search: A title company searches the public record for the property — deed history, existing liens, judgments, easements, and any encumbrances that would affect a clean transfer. On a property with a straightforward ownership history in a cooperative county recorder's office, this takes 7-10 business days. On properties with complex ownership histories or in jurisdictions with slow recording practices, it can take longer.
Phase I environmental assessment: A licensed environmental professional inspects the property and searches historical records for evidence of recognized environmental conditions (RECs) — prior uses, underground storage tanks, adjacent site contamination. A Phase I takes 2-3 weeks to complete. If the Phase I identifies RECs that require further investigation (a Phase II), the timeline extends. A clean Phase I comes back with "no RECs identified" and doesn't slow the deal.
What the operator should do: If you have an existing Phase I that was completed within the last 12 months for the same property, provide it. The buyer will likely commission their own, but having your prior report available can accelerate the process. Same with any existing title work.
Week 2: Financial underwriting
Once the financial documents are received, the buyer begins formal underwriting. This is where rent coverage is calculated precisely from actual unit-level financials rather than from estimated figures used to structure the LOI.
The underwriter will:
- Reconstruct the unit-level P&L from the provided statements
- Calculate trailing 12-month EBITDA at the unit level
- Verify the rent coverage ratio against the proposed lease structure
- Review the three-year trend for stability and identify any outlier periods
- Calculate the implied cap rate against the proposed purchase price
What typically happens in underwriting: The numbers in a well-prepared LOI will confirm through underwriting without surprise. Deals that unwind in underwriting usually do so because the preliminary financials used to structure the LOI were different from the actual filed returns and formal statements. This is why providing accurate estimates upfront matters — a deal that looks like 2.4x coverage in LOI discussions but comes back at 1.8x in underwriting is a different deal.
If the underwriting surfaces questions, the buyer will send written questions or request a call. These are normal. Answer them completely and quickly. An unanswered underwriting question is a stalled deal.
Week 2-3: Appraisal
The buyer commissions an independent appraisal of the property. Appraisers have their own schedules and the buyer typically cannot control when the appraiser can schedule the site visit. Plan for 2-3 weeks from order to report.
The appraisal confirms the market value of the property as if vacant (fee simple value) and sometimes as an investment-grade leased property (leased fee value). Buyers use the appraisal to confirm that the purchase price is consistent with market value.
What if the appraisal comes in below the purchase price? This happens occasionally. An all-equity buyer who is underwriting primarily to operator credit — rather than to property value as collateral — has more flexibility to proceed at the contracted price if the business fundamentals support it. The conversation that results is one to have with your buyer directly.
Week 3-4: Lease negotiation
Concurrent with the diligence process, the buyer's counsel will prepare a lease draft based on the terms agreed in the LOI. This is the actual NNN lease that both parties will execute at closing.
The lease negotiation is where the details of the LOI become binding contract language. Items that typically require negotiation:
- Assignment and subletting language (important for eventual business sale)
- Default cure periods and notice requirements
- Landlord access rights
- Permitted use definition (how broadly is the tenant's permitted use defined?)
- Co-tenancy provisions (if applicable for retail formats)
- SNDA and estoppel requirements
- Guaranty form and scope
The lease negotiation is driven by attorneys on both sides. An operator whose attorney has reviewed NNN leases before will move faster than an operator whose attorney is encountering the format for the first time. If your attorney has not previously reviewed NNN leases, consider looping in outside counsel who has — the learning curve adds time.
Week 4-5: Survey and closing preparation
Survey: If an existing ALTA survey is not available, a new survey will be ordered. This confirms the legal description, boundary lines, and any encroachments. Survey timing varies by market — plan 2-3 weeks.
Title commitment: Once the title search is complete, the title company issues a commitment for title insurance. Both parties' attorneys review the commitment exceptions (items the title insurer will not cover) and negotiate which exceptions can be removed before closing.
Closing preparation: The buyer's attorney prepares the closing package: deed, bill of sale, closing statement, and all related transfer documents. The operator's counsel reviews and negotiates. Closing funds are arranged.
Week 5-6: Closing
A sale-leaseback closes simultaneously as a real estate sale and a lease commencement. On closing day:
- The deed transfers from seller (operator) to buyer (Haven)
- The NNN lease is executed by both parties, effective the same day
- The purchase price wires to the operator (or to pay off any existing mortgage first, with net proceeds to the operator)
- The operator's role changes from property owner to tenant — in a process that takes a few hours
For the operator, closing day feels anti-climactic relative to the 30-45 days that preceded it. The work was in the diligence. The close is paperwork and a wire.
What makes deals go faster
The operators who close in 30 days rather than 60 share three characteristics: their financial documents were organized before the LOI was signed, their property had no unaddressed environmental or title issues, and they designated one decision-maker who responded to diligence requests within 24 hours.
The deals that take 60-75 days typically have one of: a title exception that requires resolution, an environmental flag that triggers a Phase II, a lease negotiation that requires multiple rounds of attorney review, or an operator who surfaces new information mid-diligence that changes the underwriting.
None of these are fatal. They're delays. The operators who handle them best are the ones who communicate early — "here's what you're going to find" — rather than the ones who wait for the buyer to discover things independently.
Ready to understand what your deal timeline looks like? We can walk through the process against your specific property and business situation in 20 minutes. Knowing what's ahead is the difference between a smooth close and a stressful one.