The Future of Real Estate is Shifting to Proptech

This need has always been there, and understanding why it is emerging now, who is driving the trend, and how it will benefit the field is critical. The foundation of real estate is shifting, and those who understand that, and adopt best practices, will likely be among the most successful in this tectonic shift in real estate practices.

Proptech: A Need Always Present, Recently Revealed

Though proptech and the discussions around it have taken the real estate world by storm, the need for it has been present for a long time. Factors like the pandemic, evolving consumer behaviors, and adjacent technologies certainly affected the proptech outlook and accelerated its adoption timeline. During the pandemic, agents and brokers — among countless other professionals — had to be creative and find ways to display properties virtually and ensure smooth processes from a distance.

That event forced people into a new mode of working, and the changes appear to be sticking. Although more tenured professionals have been slower to adopt proptech and appreciate the future of proptech, proptech tools are moving toward widespread adoption. The traditional culture of real estate has often incentivized keeping the status quo, though in today’s world, not adopting proptech may be a disastrous business decision.

A Generational Divide: Proptech at the Center

There is a clear divide between more tenured real estate leaders and the up-and-coming generation of commercial real estate leaders. At the core of that divide are their perspectives and sentiments on the value of proptech and the future of real estate technology. At the moment, there is a compelling argument that the status quo will remain in place.

About 78% of brokers manage their back-end processes manually with legacy tools such as paper files, siloed emails, and PDFs. That said, the tide is shifting in both offices and venture capital. Since the beginning of the pandemic, nine out of 10 real estate personnel have implemented digital tools in their practices, and 82% believe they will need proptech solutions going forward.

Venture capital firms see the potential of technology supporting the $4.4 trillion commercial real estate market and continually pumping money into the area. While real estate has its roots in tradition, and some concepts date back to medieval times and ancient Rome, there is a shift toward adopting more modern solutions. Ultimately, the next generation of commercial real estate leaders will use proptech as a competitive advantage.

Putting Proptech Into Practice: A Changing Industry Driving Adoption

Technology has penetrated nearly every aspect of our day-to-day lives. Sales teams use CRMs, marketing teams have digital automation solutions, and human resources teams have payroll software. Yet, commercial real estate teams still use spreadsheets, printed PDFs with lease data, and long email chains as a form of workflow collaboration. This makes sense — traditionally, especially when the market is good, real estate has rewarded those who stick to methodical, sound practices and often punished recklessness.

In theory, it’s defensible for more traditional people in the field to point to these legacy tools — and their profits — and note that things have been working. However, there’s a danger in waiting too long or resting on laurels. Many realize that proptech allows for quicker deal flow and makes it easier to find and analyze properties that were formerly out of reach.

Advantages of Information, Collaboration, and Productivity

Proptech tools offer such a competitive advantage regarding information, collaboration, and productivity that those who don’t adopt them stand a real chance of being left behind.