CRE Banking
done a better way

A whole new way to collect capital, distribute payments, and track assets right within your investment management platform.

cre banking with covercy

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Everything you need to know
about CRE Banking

Traditional CRE
Banking Defined

What is traditional CRE Banking?

CRE banking, or commercial real estate banking, is typically defined as the practice of providing loans and other financial services to businesses and individuals that own or operate commercial real estate. Commercial real estate is any income-producing real estate that is used for business purposes, such as office buildings, retail stores, hotels, and apartments.

CRE banks typically offer a variety of loan products, including:

  • Acquisition loans: Loans used to purchase commercial real estate
  • Development loans: Loans used to finance the construction or renovation of commercial real estate
  • Permanent loans: Loans that are used to refinance existing commercial real estate debt
  • Bridge loans: Short-term loans that are used to bridge the gap between the time a property is purchased and the time permanent financing is obtained
  • Working capital loans: Loans that are used to provide businesses with the cash flow they need to operate

CRE banks also offer a variety of other financial services, such as:

  • Appraisals: Services that estimate the value of commercial real estate
  • Property management: Services that manage commercial real estate properties
  • Leasing: Services that help businesses find and lease commercial real estate space

CRE banking is a specialized field of banking that requires a deep understanding of the commercial real estate market and the risks involved in lending to businesses and individuals who own or operate commercial real estate. CRE bankers must be able to assess the creditworthiness of borrowers, analyze the market value of commercial real estate, and manage the risks associated with CRE lending.

investor management in real estate

CRE Banking:
The Covercy Way

The banking features on the Covercy Platform give general partners (GPs) several benefits, including the ability to open bank accounts quickly and easily, organize bank accounts underneath assets or properties, and move money instantly via ACH debit between assets or to their investors, or from their investors into an asset account. One of the biggest differentiators for the banking features is that banking functionality is integrated right within the investor management platform, making it easy for GPs to manage their finances and stay organized.

Additionally, funds sitting in checking accounts opened with Covercy’s banking partner, Thread Bank, earn a high-yield APY while staying accessible and liquid. This is a hugely beneficial feature for GPs and their limited partners (LPs) who may have committed capital sitting uncalled in a savings account or checking account for months or even years during capital projects on a property or development. This money could be earning additional revenue for the GP, the LP, or the asset/property while it sits, but still be easily accessible should the need to call it sooner than planned arise.

Here are some additional details about each of these features:

  • Opening bank accounts quickly and easily: It is easy for GPs to open bank accounts for their investment funds. This can be done online in just a few minutes, and there are no minimum balance requirements or fees. Individual debit cards for each asset account can be issued as well.
  • Organizing bank accounts underneath assets or properties: The banking features allow GPs to organize their bank accounts underneath assets or properties. This makes it easy to track the financial performance of each asset or property and to ensure that funds are being allocated appropriately.
  • Moving money instantly via ACH debit: The banking features allow GPs to move money instantly between asset accounts, distribute payments to their investors, or collect capital contributions from their investors into an asset account. This can be done 24/7, and there are no fees for ACH transfers.
  • Funds earning a high-yield APY: Funds sitting in checking accounts opened with Covercy’s banking partner, Thread Bank, earn a high-yield APY. This means that GPs and LPs can earn additional revenue on their committed capital, even while it is sitting uncalled.
  • Funds staying accessible and liquid: Funds sitting in checking accounts opened with Covercy’s banking partner, Thread Bank, stay accessible and liquid. This means that they can be easily withdrawn or transferred if needed.

Overall, on the Covercy Platform, the banking features offer several benefits for GPs and LPs. These features can help to streamline the financial management process, improve transparency, and generate additional revenue.

covercy banking

CRE Banking
Use Cases & Examples

Covercy is a software platform that provides investment management solutions for commercial real estate (CRE) deal sponsors. The company’s banking features allow sponsors to open bank accounts quickly and easily, organize bank accounts underneath assets or properties, and move money instantly via ACH debit between assets or to their investors, or from their investors into an asset account.

Covercy’s banking partner is Thread Bank, a well-established financial institution that offers a variety of banking services to its customers. Deposits are FDIC-insured for $250,000 for each account.  With cash sweeping that deposits made with the company are insured up to $3,000,000 per depositor*. This provides sponsors with peace of mind knowing that their funds are safe and secure.

Here are a few sample scenarios demonstrating how Covercy’s CRE Banking features work to streamline operations, payments, and reporting for General Partners in the commercial real estate market.

Open New Bank Accounts: A sponsor can use Covercy’s CRE banking features to open a new bank account, or several bank accounts, for a specific asset or property. The accounts can be organized and labeled hierarchically, making it easy to track the financial performance of the asset or property.

Money Transfers: A sponsor can use Covercy’s CRE banking integration to move money instantly between asset accounts (for example, from a CAPEX to OPEX account) or to their investors for a quarterly distribution payment. This can be done 24/7, which can be helpful in time-sensitive situations.

Revenue Generation: A sponsor can use Covercy’s CRE banking accounts to earn a high-yield APY on committed uncalled capital. This can help to generate additional revenue for the sponsor and their investors and provides a safe & secure place to store idle cash if it’s not actively being used in an investment opportunity.

Built-in Reporting & Compliance:  Because every fund transfer is automatically tracked within the Covercy investment management platform, it’s easier to stay compliant with all applicable regulations and provide accurate reporting to investors without additional manual effort. This can help to protect the sponsor and their investors from financial risks, while also freeing up the GP’s time to work on relationship building or sourcing a new deal.

CRE Banking

streamlined CRE banking through Covercy

Covercy is a valuable tool for CRE deal sponsors & general partners. It can help streamline banking operations, automate many administrative tasks, improve transparency for LPs, and even add a new revenue stream by taking advantage of high-yield APY rates on FDIC-insured cash accounts.*

Simplicity: CRE Banking with Covercy makes it easy for sponsors to manage their banking relationships. They can open and close accounts, make deposits and withdrawals, pay vendors, distribute payments to LPs, collect capital, and transfer funds internationally — all within the Covercy platform. The integration also provides sponsors with a single point of contact for customer support, which can save time and hassle.

Transparency: CRE Banking with Covercy provides both General Partners and Limited Partners real-time visibility into their banking activity, including all distributions, waterfall calculations, capital contributions, capital calls, and fees, all in one place. This level of transparency can help sponsors identify potential problems early on and take corrective action.

Efficiency: CRE Banking with Covercy eliminates the need for GPs to manually reconcile their banking statements, and gives real estate firms the ability to organize bank accounts hierarchically under each asset or property. This saves GPs considerable time, money, and frustration, freeing them up for more important tasks like relationship building or deal sourcing.

Security: Covercy’s CRE banking integrations are secure and compliant with all applicable regulations, including the latest SEC Private Funds Rule, using industry-standard security measures to protect data from unauthorized access while also automatically record-keeping for documentation and audit purposes. This means that sponsors can be confident that their funds are safe and secure and that every cent can be traced.

Revenue Generation: Funds sitting in checking accounts opened with Covercy’s banking partner earn a high-yield APY. This means that sponsors and LPs can earn additional revenue on their committed capital, even while it is sitting uncalled. The funds stay accessible and liquid, so they can be easily withdrawn or transferred if needed. For example, if a sponsor has $10 million in committed capital that is sitting in a checking account earning a 3.84% APY, over the course of a year, the sponsor will earn $382,000 in interest on this money. This is an additional source of revenue for the sponsor that they would not have had if they were not using Covercy’s CRE banking integration.

CRE Banking
Mistakes to Avoid

Not Following Distribution Policies: Your distribution policy should clearly outline the criteria for making distribution payments, the timing of distributions, and the process for making distributions. This will help to avoid confusion and disputes among the GPs and limited partners (LPs). Additionally, GPs should keep LPs informed about the status of distributions. This includes providing updates on the timing of distributions, the amount of distributions, and any changes to the distribution policy.
distribution policy - cre banking with covercy
cre banking - say goodbye to spreadsheets

Not Using Investment Management Software with Integrated Banking: A CRE Banking platform like Covercy automates many of the tasks involved in commercial real estate investment management, like distribution payments, capital calls, and waterfall calculations. There is no reason to complete these tasks manually or store sensitive data in spreadsheets when tools like Covercy are designed specifically to streamline operations while adding an additional layer of security and compliance to a GP’s day-to-day investor communications.

Not Having a Capital Call Process: A capital call is a request for additional capital from LPs. It is important to have a process in place for collecting capital calls in a timely manner. This will help to ensure that the fund has the necessary capital to meet its obligations. Making it simple and easy for your investors to contribute capital to a new deal or contribute additional capital to an existing deal is also paramount. Processing a wire or mailing paper checks can cause time delays or even security concerns. A platform like Covercy facilitates instant fund transfers between all partners on a deal.
ach debit distribution payments - CRE banking

Banking features designed for Commercial Real Estate

Earn interest on bank account deposits. Manage multiple bank accounts per asset. Look at each account in an asset or all accounts aggregated to that asset.

Regular Bank AccountCovercy CRE Bank Account ⁽¹⁾
Instantly Open Bank Accounts
Manual Forms
Earn interest
Make ACH Payments Online
Multiple Accounts – Manage Accounts by Asset
Flat List of Accounts
Pay Vendors and Suppliers Right from Asset Account
Auto-distribution & Capital Call Payments

Covercy is a financial technology company. Banking provided by Thread Bank: Member FDIC.

What Covercy
customers are saying

Before Covercy it felt like we were an accounting firm – that all we were doing was constantly making payments and dealing with bureaucracy, leaving us no time to truly grow our assets and portfolio. It was a colossal waste of time and energy.”

Ben Harlev

Managing Partner
Be Aviv

More about CRE
Banking with Covercy

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Help Center

How to Qualify for the Highest APY on Covercy Wallet Accounts

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features for your real estate firm

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    End-to-end automated distribution payments. Calculate, notify, distribute directly to your investor's bank account.
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    After fundraising commitment, automate the capital call payment processing and reconciliation.
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All the greatness of Standard, and:
  • Funds (with capital commitments)
    Allows raising funds in an open fund structure.
  • FDIC insured wallets per Fund
    All funds in the Covercy Wallet are FDIC insured by our banking partner.
  • Fully Customisable permissions
    User roles fully Customisable.
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