Understanding Wire Payments in Commercial Real Estate

Wire Payments are Essential Today for Multiple Reasons

As a general partner, syndicator, or fund manager in commercial real estate, you know that time is of the essence in your daily work. You have to communicate quickly, get the information investors need quickly, and make decisions quickly — all to keep transactions on track and important players happy. Wire payments in commercial real estate are one of the most critical functions where speed and accuracy matter.

You’ve likely wired payments before, but today being able to issue payments to multiple parties involved in a commercial real estate transaction is not only helpful — it’s virtually mandatory. This is because of how fast, secure, and accurate wire payments are. They can be executed rapidly, ensuring parties have the capital needed for the transaction or that vendors are paid for their services. Because they involve direct interaction between financial institutions, they’re verified for trustworthiness and security. And they help to protect everyone involved in the transaction.

Here, we’ll explore more advantages of wire payments in commercial real estate — and how Covercy offers a seamless solution as part of our complete banking and investment management platform.

• Looking to issue payments outside of commercial real estate? Covercy offers a competitive cross-border payments solution. Learn more here.

Advantages of Wire Payments in Commercial Real Estate

Wire payments offer a few key benefits over other solutions such as ACH (Automated Clearinghouse) transactions. While ACH payments are of course still a standard payment method in this industry and countless others, they’re more suited for batch payments to vendors located in the United States. For larger transactions and those where international or even same-day transactions are needed, wire transfers excel. Here’s why:

1. Settlement Speed — Wire payments are exceptionally fast compared to traditional methods for transferring funds, such as ACH transactions. This is because they’re an individual, direct transaction between two financial institutions, as opposed to a batch of transactions that occurs on a fixed schedule. Money is typically available within 24 hours, and the transaction can often be completed the same day.
2. International Transfers — Whereas ACH transactions are made within the United States only, wire payments in commercial real estate transactions can be issued internationally. This is incredibly valuable as often investors and partners that are involved in commercial real estate deals come from multiple countries.
3. Enhanced Security — A transfer between financial institutions first passes through a secure transfer system, such as Fedwire or SWIFT. Transfers that originate within the United States will also be checked through the Office of Foreign Assets Control to ensure they’re not being used to fund terrorist activities or are going to countries that are currently sanctioned or pose other risks.

Use Covercy to Wire Payments with Ease

Covercy is the first real estate syndication platform where banking meets investment management. A leading feature of our solution is the ability for GPs, syndicators, and other industry professionals to issue a variety of payments and transfers — from wiring payments as part of the larger transaction and issuing distributions to investors to making payments to attorneys, contractors, utility providers, and more. Additionally, our cross border payments solution allows for low-cost international fund transfers for other purposes, such as sending money to family and friends.

For commercial transactions, we also are the first platform to offer an integrated banking solution — combining wire payments with easy-to-open bank accounts, seamless control of all accounts tied to different assets, simple transaction search and filtering, and more, all with a strong interest rate on funds held in your Covercy Wallet.

Ready to put wire payments in commercial real estate to work for your firm? Sign up for a private demo of Covercy today.