A Practice Note discussing the use of standby letters of credit in real estate transactions. This Practice Note discusses the parties and the key characteristics of standby letters of credit. It also discusses their use as collateral in lease agreements, loan agreements, purchase and sale agreements, and other contractual agreements affecting real property interests. This Note identifies important issues for lenders, landlords, tenants, borrowers, sellers, and purchasers and provides guidance and tips for negotiating standby letters of credit and the underlying commercial real estate agreements to which they pertain.