As we reach the midpoint of 2025, the economic landscape for startup proptech companies in commercial real estate (CRE) shows signs of cautious optimism. While challenges persist, particularly in the office sector, several trends indicate a potential rebound for proptech ventures. (CRE Daily)
While the office sector faces headwinds from high interest rates, oversupply, and compressed property values, a more optimistic current is beginning to emerge in proptech. Recent signals suggest that technology-led companies are finding ways to not only weather the storm but capitalize on the market’s shifting dynamics.
A Surge in Proptech Funding
According to CRETI, in the first quarter of 2025, proptech startups secured $544 million across 32 funding rounds, with a median funding size of $9.8 million. That’s no small feat in a capital-constrained environment. What’s even more telling is the growing preference for debt financing, especially for asset-backed models and infrastructure platforms.
This influx of capital suggests a growing investor appetite for real estate technologies that can navigate current market complexities. This signals more than investor confidence — it reflects a broader shift in how real estate technologies are being viewed: not as speculative bets, but as foundational tools for navigating operational complexity and market volatility.
CRE Isn’t in Freefall, It’s Evolving
The CRE sector remains under pressure due to higher interest rates, oversupply, and rising costs, which have decreased property values and complicated refinancing deals. Yes, challenges persist. Refinancing is tougher. Construction costs are up. However, there are signs of recovery.
- Demand for prime city-center offices is resurging, with rents in central business districts increasing at more than twice the rate of peripheral areas.
- Private credit is stepping in to fill the lending gap as traditional banks pull back. Offering a new path forward for capital deployment in CRE.
Operational efficiency is no longer a luxury. It’s a lifeline.
Why Proptech Is Poised to Lead
CRE teams are turning to proptech to enhance efficiency and decision-making, especially in areas like underwriting, risk modeling, and portfolio analysis. Integrating IoT sensors and automated systems optimizes building operations, leading to cost savings and improved tenant experiences.
Data analytics platforms enable property owners to forecast market trends, predict maintenance needs, and identify investment opportunities. The use of blockchain for smart contracts is streamlining property transactions, reducing paperwork, and increasing transparency.
At Blooma, we’ve seen firsthand how lenders use intelligent automation to keep deals moving without losing control. And that’s the story: proptech isn’t replacing people - it’s empowering them to adapt.
Looking Ahead
While the CRE market still faces pressure, proptech is in a strong position to drive meaningful change, not by disrupting everything, but by fixing what’s no longer working.
The next phase of CRE won’t be led by those waiting for the market to return to ‘normal.’ It will be shaped by lenders and innovators who are willingly to operate differently, with clearer data, faster execution, and smarter tools.
Startups focusing on AI-driven analytics, sustainable operations, and innovative financing models are well-positioned to capitalize on emerging opportunities in the CRE landscape. And as the market continues to rebalance, the teams investing in clarity, speed, and adaptability will be the ones out in front.
Let’s connect.
If your team is rethinking how you manage risk or move faster on deals, I’d love to hear what you’re seeing. Reach out or connect with me on LinkedIn.
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