Commercial Lease Letter of Intent (Multi-Tenant) - Alaska

LETTER OF INTENT -- MULTI-TENANT COMMERCIAL LEASE (ALASKA)

CONFIDENTIAL -- FOR SETTLEMENT AND NEGOTIATION PURPOSES ONLY

Date: [__/__/____]

Delivered via: ☐ Email ☐ Hand Delivery ☐ Certified Mail ☐ Overnight Courier

RECITALS AND PURPOSE

This Letter of Intent ("LOI") sets forth the principal terms upon which [________________________________] ("Landlord") and [________________________________] ("Tenant") propose to enter into a definitive commercial lease agreement (the "Lease") for space within a multi-tenant property located in the State of Alaska. Except for the Binding Provisions identified in Section 20 below, this LOI is non-binding and shall not create any legally binding obligation on either party.

Alaska Practice Note: Alaska commercial leases are governed by common law contract principles and freedom of contract. The Alaska Uniform Residential Landlord and Tenant Act (AS 34.03) applies only to residential tenancies (apartments, houses, mobile homes) and expressly excludes commercial property, rooming houses, hotels, and temporary shelter housing. Under AS 09.25.010, contracts for the sale or lease of real property (or interests therein) that cannot be performed within one year must be in writing.

LOI Enforceability Note: Alaska courts will evaluate LOI enforceability based on the specificity of terms, the parties' intent, and whether the document demonstrates a present intent to be bound. A clearly drafted non-binding disclaimer will generally be upheld, but binding carve-out provisions will be enforced.

Alaska-Specific Challenges: Commercial leasing in Alaska presents unique challenges including extreme weather (-40degF or below in interior regions), limited daylight in winter months, seismic activity (Alaska is the most seismically active U.S. state), permafrost considerations, remote locations with limited infrastructure, supply chain difficulties, and higher construction/maintenance costs. This LOI includes provisions addressing these conditions.

1. PARTIES

Landlord:

• Legal Name: [________________________________]
• Entity Type: [________________________________]
• State of Organization: [________________________________]
• Principal Address: [________________________________]
• Contact Person: [________________________________]
• Email: [________________________________]
• Phone: [________________________________]

Tenant:

• Legal Name: [________________________________]
• Entity Type: [________________________________]
• State of Organization: [________________________________]
• Principal Address: [________________________________]
• Contact Person: [________________________________]
• Email: [________________________________]
• Phone: [________________________________]

2. PREMISES AND BUILDING DESCRIPTION

Building:

• Building Name: [________________________________]
• Building Address: [________________________________]
• Borough / Census Area: [________________________________], Alaska
• Building Type: ☐ Office ☐ Retail ☐ Mixed-Use ☐ Industrial ☐ Medical ☐ Government Services ☐ Other: [____]
• Total Building Rentable Area: [________________________________] RSF
• Number of Tenants in Building: [____]
• Year Built / Last Renovated: [____] / [____]

Premises:

• Suite / Unit Number(s): [________________________________]
• Approximate Rentable Square Footage: [________________________________] RSF
• Approximate Usable Square Footage: [________________________________] USF
• Floor(s): [________________________________]
• Load Factor / R/U Ratio: [____]%
• Current Condition: ☐ Shell ☐ Second-Generation Space ☐ Built-Out ☐ Other: [____]

Building Systems (Alaska-Specific):

• Heating System: ☐ Natural Gas ☐ Oil-Fired Boiler ☐ Electric ☐ Geothermal ☐ Other: [____]
• Insulation Rating: R-[____] (walls); R-[____] (roof)
• Foundation Type: ☐ Slab-on-Grade ☐ Piers/Pilings ☐ Spread Footing ☐ Thermosyphon (permafrost) ☐ Other: [____]
• Backup Power: ☐ Generator ☐ Battery ☐ None
• Snow Load Rating: [____] PSF (per local code / ASCE 7)
• Seismic Design Category: [____]

Measurement Standard:

• ☐ BOMA 2017 (Office) ☐ BOMA 2010 (Retail) ☐ Other: [________________________________]

3. LEASE TERM AND COMMENCEMENT

• Initial Term: [____] years [____] months
• Anticipated Commencement Date: [__/__/____]
• Rent Commencement Date: The earlier of: (a) [____] days after the Commencement Date; or (b) the date Tenant opens for business.
• Expiration Date: [__/__/____]
• Early Access / Fixturing Period: [____] days prior to Commencement Date at no charge for Base Rent (Tenant responsible for utilities and insurance).
• Seasonal Construction Note: If construction or tenant improvements are anticipated, the parties acknowledge that Alaska's construction season is limited (generally May through September in many regions), and delivery timelines shall account for weather-related delays.

4. DELIVERY AND LATE DELIVERY REMEDIES

• Delivery Condition: ☐ Warm Shell ☐ Cold Dark Shell ☐ As-Is ☐ Landlord Work Complete ☐ Other: [____]
• Target Delivery Date: [__/__/____]
• Outside Delivery Date: [__/__/____]
• Late Delivery Abatement: One (1) day of free Base Rent for each day of delay beyond the Outside Delivery Date.
• Extended Delay Termination: If delivery does not occur within [____] days of the Outside Delivery Date, Tenant may terminate by written notice. Landlord shall return deposits and reimburse Tenant's documented costs up to $[________________________________].
• Winter / Extreme Weather Extension: The Outside Delivery Date shall be extended day-for-day for delays caused by: (i) extreme cold (temperatures below -[____]degF preventing safe construction); (ii) seismic events; (iii) supply chain disruptions to Alaska (shipping, barge, air freight delays); (iv) other force majeure events.

Alaska Construction Season Note: Construction in Alaska is significantly impacted by weather. In Fairbanks and interior Alaska, concrete pours, exterior work, and site preparation are generally limited to May-September. Anchorage and coastal areas may have a slightly longer window. Delivery dates should account for seasonal construction limitations.

5. BASE RENT AND ESCALATIONS

• Annual Escalation: ☐ Fixed at [____]% per annum ☐ CPI-based (Anchorage CPI, capped at [____]%) ☐ FMV adjustment at Year [____] ☐ Other: [________________________________]
• Free Rent / Abatement: [____] months of Base Rent abatement (Tenant responsible for Additional Rent during abatement).

Alaska CPI Note: If using CPI-based escalations, specify the Anchorage Consumer Price Index (CPI-U, Anchorage metropolitan area) published by the Bureau of Labor Statistics. Alaska CPI may differ significantly from the national CPI.

6. ADDITIONAL RENT -- CAM, TAXES, AND INSURANCE

Lease Structure:
☐ Modified Gross ☐ Full Service Gross ☐ Triple Net (NNN) ☐ Other: [________________________________]

Base Year / Base Stop:

• Base Year for Operating Expenses: Calendar year [____]
• Base Year for Real Property Taxes: Tax year [____]
• Tenant's Proportionate Share: [____]%

Estimated Year 1 Additional Rent:

• Operating Expenses (CAM): $[____]/RSF/year
• Real Property Taxes: $[____]/RSF/year
• Insurance: $[____]/RSF/year
• Heating / Fuel Costs (Alaska-Specific): $[____]/RSF/year
• Snow Removal / Winter Maintenance: $[____]/RSF/year
• Total Estimated Additional Rent: $[____]/RSF/year

CAM Provisions (Multi-Tenant Specific):

(a) Controllable Expense Cap: Annual increases in Controllable Operating Expenses shall not exceed [____]% per annum. Controllable Expenses exclude: real property taxes, insurance, utilities, heating fuel, snow removal, and government-mandated costs.

(b) Gross-Up: If Building less than [____]% occupied, Operating Expenses grossed-up to [____]% occupancy.

(c) Exclusions from CAM:

• Capital expenditures (except government-mandated or cost-reducing, amortized over useful life at [____]%)
• Leasing commissions and other tenant concessions
• Latent construction defects
• Landlord's income/franchise/transfer taxes
• Depreciation and debt service
• Insurance/warranty reimbursed costs
• Management fees exceeding [____]%
• Fines and penalties
• Landlord negligence/willful misconduct costs

(d) Audit Rights: Annual audit right; overcharge above [____]% triggers reimbursement of audit costs plus refund with interest.

Alaska Property Tax Note: Alaska has no state-level property tax. Real property taxes are levied by boroughs (Alaska's equivalent of counties) and municipalities. Not all areas of Alaska have an organized borough; properties in unorganized boroughs may have no property tax obligation (though state taxes on certain resources may apply). The Municipality of Anchorage, Fairbanks North Star Borough, Matanuska-Susitna Borough, and Kenai Peninsula Borough all levy property taxes with varying millage rates. Confirm the applicable taxing jurisdiction and millage rates for the Property. Some boroughs offer economic development or senior exemptions that may affect tax calculations.

Alaska Heating Cost Note: Heating is one of the largest operating expenses for Alaska commercial properties. Costs vary dramatically by region and fuel source: natural gas (primarily Anchorage/Cook Inlet), heating oil (widespread), propane, and electric (varies). In interior Alaska, annual heating costs can exceed $10-15/RSF. The Lease should clearly define how heating costs are allocated, metered, and reconciled. Consider including a heating cost cap or a separate utility escalation mechanism.

7. TENANT IMPROVEMENT ALLOWANCE AND LANDLORD WORK

TIA:

• Amount: $[____] per RSF (total: approximately $[________________________________])
• Disbursement: ☐ Lump sum ☐ Progress payments ☐ Rent credit ☐ Other: [____]
• Unused TIA: ☐ Forfeited ☐ Rent credit up to [____]% ☐ Cash to Tenant up to [____]%
• Must be utilized within [____] months of Commencement

Landlord Work:

• Scope: [________________________________]
• Plans: Mutually agreed within [____] days of LOI
• Completion: [__/__/____]

Code Compliance:

Alaska Building Code Note: Alaska does not have a statewide mandatory building code for all areas. The Municipality of Anchorage has adopted the International Building Code (IBC) with Alaska-specific amendments emphasizing seismic and energy standards. Fairbanks North Star Borough and other organized boroughs may have their own adopted codes. Many rural and unorganized borough areas have no building code requirements at all. The parties should identify the applicable code jurisdiction and confirm which building codes, if any, apply to the Property and tenant improvements.

Seismic Design: Alaska is the most seismically active state in the U.S. Buildings must be designed to appropriate Seismic Design Categories per ASCE 7 and the applicable building code. The Municipality of Anchorage requires compliance with seismic design standards, and the Alaska Seismic Hazards Safety Commission (ASHSC) provides guidance on seismic standards. Tenant improvements must not compromise the Building's seismic integrity.

8. PERMITTED USE, EXCLUSIVE USE, AND CO-TENANCY

Permitted Use:

• Primary: [________________________________]
• Ancillary: [________________________________]
• Prohibited: [________________________________]
• Must comply with applicable zoning, local ordinances, and all laws

Exclusive Use (Multi-Tenant):

• Tenant has exclusive right to operate as [________________________________] within the Building/Project
• Exceptions: (i) existing tenants; (ii) ancillary uses below [____]% of gross revenue; (iii) [________________________________]
• Remedies: ☐ Reduced rent to [____]% ☐ Termination ☐ Injunctive relief ☐ Combination

Co-Tenancy (Retail):

(a) Opening Co-Tenancy:

• [________________________________] ("Anchor") open and operating in [____] RSF
• [____]% of Project RSF leased and occupied
• Failure by [__/__/____]: ☐ Delay opening ☐ Reduced rent ☐ Terminate

(b) Ongoing Co-Tenancy:

• Anchor ceases for [____]+ days or occupancy below [____]%
• Remedy: ☐ Reduced rent ☐ Terminate after [____] days ☐ Both

Tenant Mix: Landlord shall not lease to [________________________________] without Tenant consent.

Radius: ☐ N/A ☐ [____] miles for Term plus [____] months

Go-Dark:

• ☐ Must remain open ☐ May go dark with notice ☐ Landlord recapture after [____] days

Alaska Market Note: Alaska's commercial markets are concentrated in Anchorage (the state's largest city), Fairbanks, Juneau, and the Matanuska-Susitna Valley. Multi-tenant properties outside these areas may face unique challenges including limited tenant pools, seasonal population fluctuations (particularly in communities dependent on fishing, tourism, or military installations), and logistical constraints. Co-tenancy and exclusive use provisions should be calibrated to the realistic tenant mix for the specific market.

9. RENEWAL OPTIONS

• Number: [____] option(s) of [____] years each
• Notice: [____] months prior to expiration
• Rent: ☐ FMV ☐ Fixed at $[____]/RSF ☐ [____]% increase ☐ Greater of FMV or [____]%

FMV Process:

1. Parties attempt to agree within [____] days.
2. Each appoints MAI appraiser within [____] days.
3. If within [____]%, FMV = average.
4. Otherwise, third appraiser; baseball arbitration.
5. FMV excludes Tenant improvements, goodwill, going-concern. Comparables based on Alaska properties of similar class and market.

Alaska FMV Note: Due to Alaska's limited comparable property inventory (particularly outside Anchorage), FMV determinations may require appraisers with specific Alaska market expertise. Consider requiring MAI appraisers with a minimum of [____] years of Alaska commercial appraisal experience.

10. EXPANSION RIGHTS AND ROFO / ROFR

ROFO:

• ☐ Tenant has ROFO on Suite(s) [________________________________]
• Landlord offers before marketing; Tenant has [____] business days to accept
• Subject to existing rights of: [________________________________]

ROFR:

• ☐ Tenant has ROFR on [________________________________]
• [____] business days to match third-party offer

Expansion Option:

• ☐ Expand into [________________________________] at $[____]/RSF or FMV upon [____] months' notice

11. SIGNAGE

• ☐ Suite entry signage
• ☐ Building directory
• ☐ Building-top or monument signage
• Subject to Landlord approval, municipal sign ordinances, and CC&Rs
• Existing exclusive signage rights: [________________________________]

12. PARKING

• Spaces: [____] per 1,000 RSF = [____] total
• Type: ☐ Unreserved ☐ Reserved ☐ Covered ☐ Heated (Alaska-specific) ☐ Surface
• Charges: $[____] unreserved; $[____] reserved
• Plug-Ins (Alaska-Specific): ☐ Engine block heater plug-ins provided ([____] spaces) ☐ Not available
• Snow Removal: ☐ Included in CAM ☐ Separate charge
• Parking subject to ADA requirements and local ordinances

Alaska Parking Note: Engine block heater plug-ins are essential in interior Alaska (Fairbanks, North Pole, Delta Junction) and highly desirable in Anchorage and Mat-Su during winter months. Without plug-ins, vehicles may not start in extreme cold (-20degF to -50degF). The Lease should address: (i) number and location of plug-in spaces; (ii) electrical costs for plug-ins; (iii) snow removal frequency and standards; and (iv) ice management (sanding/salting) for parking areas and walkways.

13. ASSIGNMENT AND SUBLETTING

• Landlord consent required, not unreasonably withheld.
• Permitted Transfers: Affiliates, merger/consolidation successors, asset purchasers with net worth of $[________________________________]+.
• Profit Sharing: Landlord gets [____]% after Tenant's costs.
• Recapture: ☐ Yes ☐ No

14. INSURANCE AND INDEMNITY

Tenant Requirements:

• CGL: $[________________________________] / $[________________________________]
• Property: Full replacement cost of Tenant improvements
• Workers' Comp: Statutory (Alaska rates)
• Business Interruption: [____] months
• Additional: ☐ Umbrella ☐ Earthquake (see below) ☐ Flood ☐ Environmental

Mutual Provisions:

• Waiver of subrogation
• Landlord as additional insured
• Mutual indemnification

Alaska Earthquake Insurance Note: Alaska experiences more earthquakes than any other U.S. state. The 2018 Anchorage earthquake (M7.1) caused widespread commercial property damage. Standard property insurance policies exclude earthquake damage. The parties should address: (i) whether earthquake insurance is required; (ii) how earthquake premiums and deductibles (typically 5-15% of insured value) are allocated; (iii) whether the Lease requires business interruption coverage for earthquake; and (iv) restoration obligations following seismic damage, including whether Landlord must rebuild to current (potentially updated) seismic code standards.

Alaska Workers' Compensation Note: Alaska workers' compensation insurance rates are among the highest in the nation due to the state's hazardous work environments. This affects both construction costs and ongoing operating costs.

15. ENVIRONMENTAL

Landlord Representations:

• No Hazardous Materials contamination (to actual knowledge)
• No underground storage tanks (or, if present: [________________________________])
• Not on EPA NPL or ADEC contaminated sites database
• No pending environmental actions

Due Diligence:

• ☐ Phase I ESA by Tenant
• ☐ Landlord provides existing reports
• ☐ Environmental condition satisfactory to Tenant is a Lease condition

Ongoing:

• No Hazardous Materials use except in compliance with law
• Mutual indemnification for contamination

Alaska Environmental Note (AS 46.03 / CERCLA): Alaska has significant environmental liability concerns for commercial properties, particularly those with prior industrial, military, or petroleum-related uses. Under AS 46.03.822, the owner or operator of a contaminated property is generally liable for cleanup. The Alaska Department of Environmental Conservation (ADEC), Division of Spill Prevention and Response (SPAR), administers the state's contaminated sites program. Key considerations include:

• Petroleum Contamination: Alaska has approximately 2,400+ contaminated sites tracked by ADEC, many related to fuel storage (USTs and above-ground tanks are widespread due to heating oil dependence).
• Military / Federal Sites: Eight Alaska sites are on the EPA National Priorities List (Superfund), mostly former military installations. Commercial properties near military bases should be evaluated for potential contamination migration.
• Brownfields: ADEC's Brownfields program provides liability protections for qualifying purchasers and developers of contaminated properties.
• Heating Oil Tanks: Many Alaska commercial properties have or previously had heating oil storage tanks. ADEC's Underground Storage Tanks program and the Alaska Underground Storage Tank Revolving Loan Fund address petroleum releases.

16. CASUALTY AND CONDEMNATION

Casualty:

• Restoration exceeding [____] days: either party may terminate.
• [____]%+ of Building RSF unusable: either party may terminate.
• Rent abates proportionally during restoration.

Condemnation:

• Material taking: either party may terminate.
• Tenant's separate claim for relocation, business loss, unamortized improvements.

Alaska Casualty / Seismic Event Note: Address: (i) earthquake as a specific casualty trigger; (ii) extended restoration timelines due to Alaska's limited contractor pool and supply chain constraints (materials must be shipped or barged to Alaska, with delivery times of 2-6 weeks from the Lower 48); (iii) whether Landlord must rebuild to current seismic code (which may be more stringent than the code under which the Building was originally constructed); (iv) permafrost-related damage (thaw settlement, frost heave) and whether such damage constitutes a "casualty"; and (v) Tenant's right to terminate if restoration costs exceed insurance proceeds and Landlord is unwilling to fund the deficit.

Permafrost Note: In areas with permafrost (Fairbanks, North Slope, and portions of interior Alaska), foundation settlement due to permafrost thaw is an ongoing risk. Climate change is accelerating permafrost degradation. The Lease should address: (i) Landlord's obligation to monitor and maintain permafrost foundations (thermosyphons, ventilated crawlspaces); (ii) whether gradual settlement damage is a "casualty" or a maintenance obligation; and (iii) allocation of costs for foundation repair due to thaw settlement.

17. SNDA

• Landlord delivers SNDA from each lender within [____] days of Lease execution.
• SNDA protects Tenant's possession so long as not in default.
• Estoppel within [____] business days.

18. SECURITY DEPOSIT

• Amount: $[________________________________] ([____] months' estimated total Rent)
• Form: ☐ Cash ☐ Letter of Credit ☐ Other: [________________________________]
• Reduction: May reduce to $[________________________________] after Year [____] if no default

Alaska Security Deposit Note: Alaska has no specific statutory framework for commercial security deposits (AS 34.03 applies only to residential tenancies, requiring return within 14 days for residential). Commercial deposit terms are entirely governed by the Lease. Specify: permitted deductions, return timeline, itemization requirements, and interest obligations.

19. BROKERS

• Landlord's Broker: [________________________________]
• Tenant's Broker: [________________________________]
• Commissions per separate agreement. Mutual indemnification.

20. BINDING PROVISIONS

Binding upon execution:

(a) Exclusivity: Through [__/__/____], Landlord shall not market or lease the Premises to third parties.

(b) Confidentiality: Terms confidential except to attorneys, accountants, lenders, and advisors.

(c) Broker Indemnification: Section 19.

(d) Governing Law and Venue: Laws of Alaska. Disputes in [________________________________] Judicial District, Alaska.

(e) Expenses: Each party bears own costs.

(f) No Agreement to Negotiate: This LOI is not an agreement to negotiate or agree. No obligation to continue negotiations or enter a Lease.

Alaska Venue Note: Alaska has four judicial districts: First (Juneau/Southeast), Second (Nome/Northwest), Third (Anchorage/Southcentral), and Fourth (Fairbanks/Interior). Specify the appropriate district based on the Property's location.

21. LEASE NEGOTIATION TIMELINE

22. ADDITIONAL ALASKA-SPECIFIC PROVISIONS

(a) Extreme Weather Operations: The Lease shall address operational continuity during extreme weather, including: (i) Landlord's obligation to maintain adequate heating systems (failure to heat below [____]degF interior temperature constitutes a material breach); (ii) snow and ice removal standards and frequency; (iii) building closure protocols during extreme cold events (below -[____]degF); (iv) pipe freeze prevention; and (v) emergency generator requirements.

(b) Seismic Preparedness: The Lease shall include: (i) Landlord's representation regarding the Building's seismic design category and compliance; (ii) earthquake emergency plan; (iii) allocation of post-earthquake inspection and repair costs; and (iv) whether Tenant may engage a structural engineer to inspect the Building post-earthquake before reoccupying.

(c) Permafrost (if applicable): For properties on permafrost, the Lease shall address: (i) foundation monitoring and maintenance obligations; (ii) reporting of settlement or frost heave; (iii) allocation of costs for permafrost-related repairs; and (iv) Tenant's right to terminate if permafrost degradation renders the Premises unsafe or unusable.

(d) Supply Chain and Shipping: The Lease shall acknowledge that: (i) construction materials, replacement parts, and supplies may require extended lead times (2-6 weeks or more) when shipped from the Lower 48; (ii) barge service to coastal communities operates seasonally; (iii) force majeure provisions shall encompass shipping/transportation disruptions specific to Alaska.

(e) Daylight and Lighting: In northern Alaska communities, extended darkness during winter months (November through February) increases lighting and energy costs. The Lease should address allocation of seasonal utility cost variations.

(f) Utility Reliability: In rural Alaska, utility service may be provided by small local utilities or co-operatives with less redundancy than urban systems. Address: (i) backup power requirements; (ii) responsibility for utility service interruptions; and (iii) rent abatement for extended utility outages.

(g) Borough / Municipal Requirements: Confirm applicable borough or municipal requirements, including business licenses, land use permits, and any local building codes.

23. FORCE MAJEURE

Neither party liable for delays from acts of God, earthquake, volcanic eruption, extreme cold, blizzard, avalanche, flood, tsunami, pandemic, government orders, strikes, shipping/barge disruptions, material supply delays to Alaska, or causes beyond reasonable control, with prompt notice and reasonable mitigation.

Alaska Force Majeure Note: Alaska force majeure provisions should be broader than standard provisions to account for: (i) seismic events (including aftershock sequences that may last weeks); (ii) volcanic eruptions and ashfall (Alaska has numerous active volcanoes); (iii) extreme cold events; (iv) transportation disruptions (road closures, cancelled flights, delayed barges); and (v) wildfire (increasingly significant in interior Alaska during summer months).

24. COUNTERPARTS AND ELECTRONIC SIGNATURES

Counterparts permitted. Electronic signatures valid under the Alaska Uniform Electronic Transactions Act (AS 09.80).

PRACTICE TIPS FOR ALASKA MULTI-TENANT COMMERCIAL LEASE LOI

1. Heating Costs: Heating is often the largest operating expense in Alaska commercial buildings. Negotiate clear allocation, metering, and reconciliation provisions. Consider a heating cost cap or separate escalation mechanism. Specify the fuel type and confirm supply reliability.

2. Earthquake Preparedness: Alaska is the most seismically active state. Require disclosure of seismic design category, demand earthquake insurance allocation provisions, and address post-earthquake inspection and restoration protocols.

3. Permafrost (Interior/Northern Alaska): If the Property is on permafrost, require foundation condition reports, ongoing monitoring, and clear allocation of thaw settlement repair costs. Climate change is accelerating permafrost degradation statewide.

4. Construction Season: Alaska's short construction season (May-September in most areas) means tenant improvements take longer than in the Lower 48. Build extra time into delivery and build-out schedules.

5. Supply Chain: Materials shipped to Alaska face 2-6+ week lead times. Factor this into TI timelines and force majeure provisions. Barge-dependent communities face even longer delays.

6. Engine Block Heater Plug-Ins: Essential in Fairbanks and desirable in Anchorage. Confirm plug-in availability and electrical cost allocation.

7. CAM -- Snow Removal and Winter Costs: Snow removal, ice management, and winter-specific maintenance (pipe freeze prevention, heating system maintenance) are significant CAM components. Ensure these are clearly defined and not subject to the controllable expense cap.

8. Environmental Due Diligence: Alaska's history of petroleum storage (heating oil tanks), military installations, and mining creates widespread contamination risks. Always conduct Phase I ESA and check the ADEC contaminated sites database.

9. Property Tax Variations: Alaska has no state property tax; boroughs levy taxes at varying rates. Some areas have no organized borough and no property tax. Confirm the taxing jurisdiction.

10. Limited Comparable Data: Alaska's small commercial markets mean limited comparable lease and sale data. FMV determinations should require appraisers with Alaska-specific expertise.

SIGNATURES

This LOI is non-binding except for the Binding Provisions in Section 20.

LANDLORD:                                    TENANT:

Entity: ______________________________      Entity: ______________________________

By: __________________________________      By: __________________________________

Name: ________________________________      Name: ________________________________

Title: _______________________________      Title: _______________________________

Date: [__/__/____]                           Date: [__/__/____]

SOURCES AND REFERENCES

• AS 34.03 -- Uniform Residential Landlord and Tenant Act
• AS 09.25.010 -- Statute of Frauds
• AS 46.03 -- Environmental Conservation
• AS 46.03.822 -- Environmental Cleanup Liability
• ADEC Contaminated Sites -- Liability Issues at Brownfields
• ADEC Cleanup Process -- How DEC Makes Cleanup Decisions
• Alaska Seismic Hazards Safety Commission -- Code Adoption and Enforcement
• Municipality of Anchorage -- Building Codes
• Alaska Building Codes -- UpCodes