Connecting Digitalization and Sustainability: Proptech in the Real Estate Operations and Management

Abstract

Digitalization of building operations and maintenance enable real-time monitoring, optimization, and automation for environment sustainability. Proptech startups are important change agents in accelerating building digitalization. While many researchers analyze economic and environmental savings from deployment of digital technology, far less attention has been devoted to challenges for proptech startups to transform efficiency gains into viable businesses. We analyze the Unissu global proptech startup database to reveal the scope and competitive landscape of proptech solutions. We conduct interviews with building owners/operators to understand what impedes the adoption of proptech solutions. Despite rapid growth, ongoing challenges remain for sustainability-focused proptech firms with three adoption barriers: (1) integration of the technology stacks; (2) integration of technology stacks with business processes; and (3) integration of owner/operators and the occupants’ solutions. Proptech with applications that work with existing infrastructure or provide more complete holistic solutions with extensive capital reserves, are more likely to survive. Other pathways include having data standardization and security protocols in place; technology partnership with technology incumbents; and effective communication with owners/operators to fill the knowledge gap. Findings can provide insights to emerging digital proptech startups as they spearhead market adoption in the real estate sector and monetize the sustainability value creation.