Imagine if the technology in your commercial building made your life easier. You’re likely familiar with proptech, the umbrella term for modern tools that transform building management. Essentially, proptech (property technology) means using cutting-edge systems – from building automation and IoT sensors to cloud-based apps – to run properties more efficiently. In short, proptech is technology that “is transforming the way properties are bought, sold, managed and experienced”.

Why does this matter to you? Tenants increasingly expect high-tech features. For example, a recent survey found 73% of tenants would be more likely to rent in a building with advanced tech like smart access or mobile building apps. In practice, that means buildings without modern tools can lose out on leases and renewals. 

At the same time, property managers face pressure to cut costs, improve comfort, and solve problems faster. Proptech offers solutions to these challenges. With the right software, you can automate routine tasks, optimize building systems for energy savings, and give tenants new ways to access services. These improvements can boost tenant satisfaction and reduce long-term costs.

Proptech Trends and Outlook

The commercial real estate industry is going digital fast. Many experts note that the COVID-19 pandemic spurred rapid proptech adoption, and by 2024 the focus has shifted to using tech strategically for efficiency, sustainability, and better tenant experience. Innovations such as digital twins (virtual models of a building) are on the rise; they let you simulate changes and detect issues before they happen.

The proptech outlook is positive. The market is growing at double-digit rates, and more firms are budgeting for tech tools. You may notice more buildings adopting features like tenant communication apps, real-time energy dashboards, and automated maintenance alerts. Proptech is moving from “nice-to-have” to necessary. What was once a novelty is now required: advanced energy management, tenant platforms, and real-time monitoring are becoming standard features in modern buildings.

High Upfront Costs and ROI Uncertainty

A top concern for any property owner is cost. Real estate managers consistently report that initial investment (plus ongoing fees) is their biggest hurdle to adopting proptech. In other words, you may hesitate because smart building systems often have significant upfront costs. Replacing a conventional thermostat with a smart one, adding networked sensors, or launching a tenant experience platform all require spending. It can be hard to justify these expenses when budgets are tight. Plus, if you can’t clearly see the payback period, you might worry it won’t pay off.

The good news is that you can overcome cost hurdles with planning. Treat each tech upgrade like any investment project:

• Calculate ROI on specific improvements. For example, tally how much you spend on energy, repairs, or tenant turnover now, and compare it to potential savings from a preventative maintenance system or LED lighting upgrade. Having clear numbers makes the value clear.
  
  
• Start small with pilot projects. If you’re concerned about cost, you don’t need to upgrade your entire portfolio at once. Pick one building. For instance, if you’re interested in modern commercial property management software, pick one building to implement in. A successful pilot makes it easier to secure a budget for the next step.
  
  
• Use scalable financing. Many proptech solutions are cloud-based with subscription models. This avoids a big one-time payment. You can pay monthly or yearly and expand usage over time.
  
  
• Seek outside incentives. Look for utility rebates or government grants for energy efficiency or smart building projects. Some vendors also offer financing or leasing options. Exploring these can reduce your initial costs.
  
  

By budgeting in stages and proving the benefits early, you reduce risk. Once you demonstrate even a small improvement, it’s much easier to expand the project. With this approach, investing in proptech can quickly move from a leap of faith to a logical business decision.

Integration with Legacy Systems

Many older buildings still run on legacy equipment. You might have an aging HVAC system, basic security cameras, or outdated management software. Integrating new tech with these can be a headache. Indeed, about 39% of managers report “integration of multiple systems” as a major barrier. If your existing infrastructure isn’t compatible with new tools, you could end up maintaining multiple systems or doing manual workarounds. For example, adding a new energy control system might require custom adapters if it doesn’t natively speak your existing protocols.

You can bridge this gap with a systematic approach:

• Audit existing systems. List all your current tech: brands, models, and communication protocols. Identify which ones can be upgraded and which can interface with new platforms.
  
  
• Prioritize open standards. When choosing new hardware or software, look for compatibility. Many modern building systems support open standards. Using these makes integration smoother.
  
  
• Consult with experts. Sometimes it helps to bring in a specialist or use vendor support. They can pre-test how new tech will link to your system and recommend best practices.
  
  

Plan to upgrade in phases. For instance, if installing a smart lighting system, do it room-by-room. This lets you adjust on the fly and keep issues small. Over time, you can replace very old equipment with newer, fully compatible versions. With careful planning and the right tools, you can weave together legacy and new systems with minimal fuss.

Data Security and Privacy Concerns

Today’s tech is powerful but also raises security questions. 

You might worry about data breaches, or compliance with regulations. After all, building systems and tenant information are valuable targets. Cybersecurity is often cited as a top barrier to tech adoption. It’s reasonable to be cautious: a security lapse could lead to significant financial loss. Even tenant trust is at stake if data is mishandled.

The key is to build security in from day one:

• Choose trusted vendors. Pick proptech providers known for security. Look for certifications like ISO 27001 or SOC2, and ask about their encryption practices. Established companies usually invest heavily in protecting data.
  
  
• Use secure networks. Make sure devices connect over encrypted networks (e.g., secure Wi-Fi with WPA3, VPNs) and require strong authentication. Limit access so only authorized staff can configure building systems.
  
  
• Collect only needed data. Don’t gather personal or sensitive tenant information unless absolutely necessary. Configure systems to store only what’s required for the service to work.
  
  
• Keep software updated. Treat building tech like your computer network: apply patches and firmware updates promptly. Monitor systems for unusual activity, such as unexpected data spikes.
  
  

Also train your team on basic cybersecurity. A simple phishing email or weak password can defeat even the best system. By taking these steps, you often reduce risk compared to old methods. For example, locked file cabinets and paper logs have their own security issues. A well-secured digital system can actually improve your overall data safety. Emphasizing security at the start will let you adopt new tools with confidence instead of anxiety.

Cultural Resistance and Skills Gaps

Often the biggest barrier isn’t technical—it’s human. If your team is used to “the old way,” change can cause friction. Maintenance crews may distrust an app over their clipboard, and managers juggling many tasks might see new technology as extra work. Industry surveys show many companies lack a clear leader or training plan for proptech projects. Without someone championing the cause or teaching the staff, even a great system can sit unused.

You can overcome these hurdles with thoughtful change management:

• Communicate benefits clearly. Explain to your team how proptech will make their work easier. For example, an automated work-order system can reduce paper shuffling, or a tenant app can cut down on phone calls. This helps win buy-in.
  
  
• Assign a proptech champion. Identify someone (even part-time) to lead the project. This might be an IT person, a building engineer, or a tech-savvy manager. They can coordinate efforts, answer questions, and keep the project on track.
  
  
• Provide hands-on training. Hold short demo sessions or one-on-one tutorials. Let early adopters play with the new tool and give feedback. Training before full rollout helps staff feel comfortable.
  
  
• Celebrate small wins. When the system shows results (like a quick fix from a remote sensor), highlight it. Positive feedback from tenants or staff can turn skeptics into supporters.
  
  
• Iterate and be patient. Roll out features gradually. Start with a non-critical area, learn from that, and then expand. Use feedback to improve the system before a full launch.
  
  

By involving people, you turn the change into a team effort. Your staff will see that these tools make their jobs easier and will cause a shift in culture that unlocks the full benefits of proptech.

Overcoming Barriers and Looking Ahead

Proptech adoption may seem complex, but every major hurdle has practical solutions. Focus on one or two key goals first: perhaps improving tenant engagement with an app, reducing energy costs with smarter controls, or speeding up maintenance with a connected work order system. Tackle each barrier step by step. 

The overall proptech outlook is positive. More commercial buildings are getting smarter all the time. In other words, staying on the sidelines may put you at a disadvantage. But you don’t have to do it alone: consider joining industry forums or collaborating with peers to share best practices. Using an integrated proptech software platform like Cove can simplify tasks like maintenance tracking and tenant engagement. With a gradual, informed approach, you can make these complex solutions feel simple and ensure your property benefits from proptech in the years ahead.