Proptech and Predictive Data Analytics are Changing Real Estate Investment

Technology tools designed for commercial real estate — collectively referred to as CRE tech or proptech — have leapt from a niche sector dominated by a few dozen well-established companies into a hive of creative startups, led by experienced tech entrepreneurs and venture capital firms. The new entrants claim to offer investment managers products and services capable of increasing revenue, reducing expenses, and predicting the future.

Since 2017, global proptech companies raised $27 billion of capital, far more than raised in all previous years combined, fueled by exponential growth in digital data, low-cost sensors, and a growing interest by the venture capital industry.1 In the 2019 edition of the ISA, we shared a brief overview of LaSalle’s approach to predictive data analytics and examples of specific analytics tools we’ve developed. This year, we examine how these tools, and proptech companies, could change how we invest, as well as some of the limitations behind the hype.