CRETech and Kastle’s Proptech Market Map
The world of commercial real estate is evolving rapidly, driven by the power of proptech, or property technology. As the largest asset class globally, real estate presents significant opportunities for investors. The US proptech market was valued at $18.2 billion in 2022 and is expected to reach $86.5 billion by 2032 (Future Market Insights). In response, executives plan to increase tech budgets by 11% (Statista). Proptech is reshaping the industry by unlocking new efficiencies and driving rapid growth.
What Is Proptech? (Definition)
Proptech refers to all residential and commercial real estate software. From deal management to portfolio management, proptech tools streamline various phases of the asset lifecycle. Proptech connects people, technology, and information to simplify the processes of owning, selling, managing, operating, researching, renting, marketing, buying, and investing in properties. It empowers professionals across the real estate industry, fostering holistic decision-making and simplifying daily operations.
Similar to fintech, proptech has uprooted traditional workflows, replacing Excel-based processes with cloud-based tools. Proptech has transformed the way real estate transactions occur and will continue to shape the industry as firms adopt digital tools and new technologies emerge.
The Proptech Landscape: Business- And Customer-Facing Solutions
Commercial real estate technology comes in business-to-business (B2B) and business-to-consumer (B2C) forms. Platforms like VTS and Dealpath are popular B2B proptech solutions. VTS is a virtual tenant leasing and asset management platform that enables landlords and brokers to market and lease properties more efficiently. Dealpath, on the other hand, is a leading commercial real estate deal management software used by institutional investment management teams to streamline workflows and simplify reporting.
B2C proptech software, such as Redfin and Zillow, connects home buyers and sellers or agents, expediting the transaction process. Airbnb offers owners an additional way to monetize their properties while providing travelers with convenient accommodations. Proptech software enhances industry knowledge and decision-making, driving revenue and creating value for businesses, landlords, and tenants.
Breaking Down the Property Technology Market By Vertical
Proptech encompasses various verticals in the real estate industry. Construction technology (contech) assists general contractors and promotes sustainable, scalable practices. Smart home technology enables owners, operators, and tenants to monitor and control appliances and energy usage through the Internet of Things (IoT). Real estate investment software helps investors deploy capital strategically. Additionally, shared economy services such as Airbnb, WeWork, and Clutter have gained popularity. These technologies simplify operations for businesses and consumers, revolutionizing the real estate industry.
Commercial Real Estate’s Top Proptech Companies
Commercial real estate proptech has already made a lasting impact on firms' workflows and bottom lines. Leading CRE tech solutions include:
- Dealpath: Real estate deal management platform for institutional deal teams.
- VTS: Lease management, tenant experience, and building automation.
- Yardi & MRI Software: ERP & accounting.
- Juniper Square: Investor relations.
- Argus by AltusGroup: Cash flow modeling.
- Procore: Capital projects and construction management.
- Cherre: Data warehousing.
- NavigatorCRE: Business intelligence.
- Building Engines: Property management.
These companies are at the forefront of the proptech adoption wave, driving growth and digital transformations in the industry.
The Real Estate Proptech Software Industry is Booming
The proptech market continues to grow, with over 100 mergers and acquisitions in the space between 2013 and 2019. Proptech deals exceeded $7 billion from 2013 to 2020. Future Market Insights projects that the proptech market will be valued at $86.5 billion by 2032. Proptech companies are setting the scene for a digitally connected future, developing game-changing technologies for seamless transactions.
Leading institutional investors, such as Principal Real Estate, rely on commercial real estate technology like Dealpath to increase deal volume and velocity. By tracking, managing, and processing their pipeline in Dealpath, Principal Real Estate evaluated a $250 billion pipeline in 2021. Proptech has also enabled lean investment management teams to scale faster by collaborating and making data-driven decisions more efficiently.
Proptech’s Reaction to Market Uncertainty: The Opportunity For Category Leaders
Despite the benefits of proptech, recent market fluctuations have presented new challenges. Economic uncertainty and decreasing transactional activity have compressed valuations and led to layoffs in some cases. However, category leaders that deliver revenue-driving innovation have the opportunity to thrive in tight market conditions. Trusted companies are sought after by industry leaders, maintaining their position in the market even in a potential recession.
Dealpath, the most trusted deal management platform, recently closed a $43 million series C funding round led by Morgan Stanley Expansion Capital. By building a digital deal advantage, firms can outperform competitors and position themselves to capitalize on new opportunities.
Understanding Proptech Software’s Impact on the World & Market of the Pandemic
Proptech software has enabled real-time data access and insights, revolutionizing the industry. The pandemic highlighted the need for centralized and real-time data to adapt to changing market dynamics. Proptech accurately predicted the growing importance of eCommerce warehouse distribution centers and the shift in multifamily living during the urban exodus.
How Do Real Estate Professionals Use Proptech Software?
Proptech software serves a variety of needs for professionals in different roles and organizations. From listing services and real estate marketplaces to building operations and tenant experience, proptech simplifies operations, enhances decision-making, and improves efficiency. It reduces manual data entry, empowers precision and predictability, and bolsters security in the cloud. Proptech software enables professionals to act with greater agility and leverage data for actionable insights.
Collaborating in the Cloud: The Power of Transparency in Proptech Software
Cloud-based commercial real estate technology offers real-time data updates and instant access to information. Teams can work from accurate and up-to-date information, streamlining processes and enhancing communication. The transparency provided by proptech software enables stakeholders to make more accurate projections and streamline project management.
Unhinging Data’s Power With Analytics
Commercial real estate technology allows firms to leverage their data through powerful analytics. Analytics tools offer effortless insights by programmatically cultivating data and providing data-driven insights. These insights inform business strategy, streamline investment decisions, and offer competitive intelligence. Commercial real estate technology is a "must-have" for competitive investors as data continues to chart the future across various business verticals.
Understanding Deal Management’s Role in Your Tech Stack
Deal management is a crucial component of a comprehensive tech stack for investment management firms. It centralizes data, enables strategic investment decisions, and simplifies workflows. By adopting industry-leading proptech, firms can strengthen their competitive advantage and prepare for new opportunities.
Proptech is revolutionizing the commercial real estate industry, driving growth, efficiency, and innovation. As the industry continues to evolve, proptech companies will play a vital role in providing intuitive solutions and empowering professionals to thrive in a digitally connected future.
