Proptech in the Second Half of 2025: Game-Changers and Sector Leaders

Proptech entrepreneurs and investors have a lot to say about what’s happening in the second half of 2025, and front of mind are their thoughts on artificial intelligence and more effective ways to deliver technology to real estate users.

The 800-pound elephant in the room is of course AI, but streamlining and unifying proptech services, and delivering them to high-demand sectors like multifamily, are also driving the industry.

The venture capital crowd is listening to its limited partners and aligning their business plans accordingly, said Jameson Hartman, vice president at RET Ventures, the Park City, Utah-based single-family and multifamily tech investment firm.

“We just had our annual summit here in Park City and we had more than 100 C-suite people in one big room,” said Hartman, referring to a gathering of RET Ventures’ limited partners (LPs). “We do a survey in advance, and the three items that popped up the most on the survey as tech priorities were cost reduction of the tech stack, because there’s a bit of a fatigue of $2 per unit for this and $3 per unit for this.”

That complaint from those surveyed parlayed into their desire to replace such tech stack point solutions with streamlined bundled services. “Which I read as, ‘Hey, we have too many cooks in the kitchen,’” Hartman said.

The LPs’ third item was a desire to use tech to improve the efficiency of resident experience.

“It touches on those first two points: cost reduction and streamlining,” Hartman said. “When you’re looking for an apartment and you’re going through that entire workflow, or when you’re up for renewal, there’s just too many steps and clicks as you’re going to a website. So a lot of our LPs are saying, ‘In tandem with streamlining our tech stack, can we streamline the resident experience?’”

Aside from the LP thoughts, Hartman believes that as we move toward 2026, proptech will see AI “sitting on top of structured data,” such as utility billing. “I think a lot of people assume that for budgeting, financial reporting, all these things, you would think AI should be able to sit on top and basically get you 90 percent of the way there.”

Gavin Myers, co-founder and managing partner at Prudence, a Manhattan-based early-stage venture capital firm investing in technology companies, is seeing exponential real estate demand for tech, particularly AI, that is not always being met.

“The most interesting thing for us in our end markets — real estate, construction and infrastructure — is that the supply of great solutions is far less than the demand for productivity gains,” said Myers. “I’ve never seen a time in my career where there’s this platform change, this new technology that’s enabled, and there isn’t initial skepticism and reticence.”

Myers sees the construction industry especially hungry for AI, and Prudence is orienting its investment strategy accordingly.

“The room for productivity gains is absolutely the best in that sector, and that’s why 80 percent of our investments right now are in construction,” said Myers.

More generally, Myers thinks AI is most effective and valuable when it is embedded in workflows. “The right mix is unique proprietary AI capabilities alongside embedded workflows,” he said. “That’s what we think is going to create the stickiness. You don’t want to just have a product. You want it to be deeply embedded in workflows, and you want to have access to data that other people don’t have. It’s a huge focus.”

However, Myers warned of a possible AI hype cycle.

“We don’t need to treat AI as a magic wand that’s going to solve everything,” he said. “AI has to have an unequivocal ROI and do something better, faster and cheaper than the human capital equivalent. So we still have vertical software companies that we’re looking at.”

Also noting the current trend of “point solution fatigue,” Bo Lais, founder and CEO of Lula, an Overland Park, Kan.-based rental maintenance services company, said end-to-end integrated AI platforms are in demand.

Lula’s response is its AI-driven work order management system, Foresight, which aims to consolidate various point solutions into a comprehensive platform.

On the investment side, more than ever, ROI is king.

“VCs and investors seem to really be favoring platforms that are driving measurable returns and results as far as asset performance,” said Lais. “Proptech is going to remain favored, but AI will continue to steal some of the headlines. Right now a lot of operators, and especially LPs in some of these funds, really want the platform solutions that could drive measurable results, especially with asset performance.”

He echoed Myers’s warning, though. AI is beneficial, but not all AI solutions are effective. Operators should ensure they adopt genuine AI for meaningful results.

“I think we’re going to see some operators and probably some middle-market property management companies on the residential side adopt what they think is AI, and it’s not going to go well,” Lais said. “They’re going to end up backing out of it. I think there are some bad actors out there in the space, but, overall, AI is here. There’s no doubt about it.”

David Fuller-Watts, CEO of Kinexio, a commercial property management company based in Bury St. Edmunds, U.K., said the sector has no room for bad — or ineffective — actors. 

“The second half of 2025 will be defined by pragmatism in proptech,” Fuller-Watts said via email. “Demand for services isn’t slowing, it’s sharpening. Owners and operators are slimming costs, elevating tenant and visitor experiences, and meeting sustainability goals, all of which require smarter tools, not fewer of them. Investment will follow the same logic, as venture and private equity are moving away from ‘growth at all costs’ toward solutions that prove real ROI and scale across portfolios. The next wave of proptech won’t be about adding more tools; it will be about fewer, smarter, integrated platforms.

“Looking ahead, data-based predictive analytics will be the real game-changers, because in today’s property management sector, real-time data is no longer a luxury — it’s the difference between simply operating and truly thriving.”

Back on this side of the Atlantic, William Sankey, co-founder and CEO of Northspyre, also said that a more pragmatic phase will define the rest of 2025, one driven by AI. Northspyre is a Brooklyn-based automated platform designed to streamline commercial real estate project delivery of administrative tasks.

“If there is a game-changer, it’s the maturation of AI into something more predictive,” Sankey said in a statement. “Developers are starting to use platforms that don’t just track what’s happening — they help anticipate challenges before they become problems. Whether that’s flagging budget overruns, analyzing vendor performance, or assessing risks across a capital stack, AI is being used more as a planning tool than a passive data layer.

“This is a more sober, thoughtful moment for the industry. The last few years were marked by a surge of innovation and investment, but also a lot of fragmentation. What’s happening now is a bit of a reset. Developers, lenders and equity partners are aligning around the kinds of technology that bring transparency, accountability and executional clarity, things that are increasingly non-negotiable.”

Yuval Golan, founder and CEO of Miami-based Waltz, a fintech real estate platform for foreign investors, took a more international view of the state of the sector.

“So what I see right now is that interest rates are lower, the market is stabilizing, and as you’ve seen in the last National Association of Realtors report, foreign nationals are back to invest in the U.S.,” said Golan. “When people are worried about tariffs and global instability, foreigners are showing strong demand for U.S. real estate. Even if the tariffs are enforced, people still believe in America.”

Golan predicted increased VC investment in AI-enhanced industries, particularly in banking, lending and private wealth management, while also highlighting the impact of emerging technologies on new construction data analytics, particularly in Florida, where private equity institutions are early adopters of these technologies.

John Ensign, president of Solon, Ohio-based real estate technology giant MRI Software, said in a statement to CO that he expects demand for proptech services to continue to increase during the rest of 2025. “My prediction is based on historical precedent: In recent decades, we’ve seen higher demand for proptech during periods of economic uncertainty.

“I expect the commercial sector to see the highest demand for proptech, because this sector is maximizing capabilities in office and industrial real estate. But market-rate multifamily is a close second, given the significant impact of AI adoption on leasing, operations and investment.”

The multifamily sector was of great interest to a number of proptech experts, too.

“Multifamily will lead the charge, and the fundamentals make sense,” Michael DeGiorgio, CEO and founder of Los Angeles-based Crexi, a CRE platform for brokers, investors and tenants, said in an email. “Leases roll quickly, apartment entry is driving volume, and it’s more scalable than other sectors.”

Roddick Jones, founder of Apart FI product Scout, a one-person startup that just launched what it claims is the first AI acquisitions analyst for multifamily real estate sponsors, also saw growth potential in multifamily. 

“AI will shift from hype to utility in proptech,” Jones said in a statement. “Tools like Scout are already cutting underwriting time by 90 percent for multifamily sponsors. The biggest growth sector will be multifamily value-add and mid-market deals ($1 million to $7 million). These are too small for institutional tech but too complex for spreadsheets — a perfect gap AI is filling.”

The game-changer going into 2026 is democratization, where non-technical founders like Jones are building lean AI tools that compete with institutional workflows, he said. “This means the next wave of proptech disruption won’t come from incumbents, but from ultra-lean startups.”

Another of the many votes for AI, but with a bit of a twist, came from Julie Blanc, CEO and co-founder of Rentana, an AI-powered platform for multifamily revenue management. 

“The agentic AI era is on the horizon, where tools won’t just analyze data, but will autonomously recommend and execute actions,” Blanc said. “Operators who embed the right AI platforms now will be positioned to capture these advancements — and dramatically scale revenue — as agentic AI transforms how portfolios are managed.”

Agentic AI, or autonomous AI, is a type of artificial intelligence that runs independently in order to design, execute and optimize workflows. AI agents make decisions, plan and adapt to achieve defined goals with little human intervention — or completely autonomously.

Also looking ahead to the end of 2025 and beyond, Bert Van Hoof, CEO at Willow, an AI-driven digital twin platform company, wrote that his game-changer is AI moving from pilots to production at scale.

“Generative AI has been hyped, but what’s really transformative is operational AI that blends numerical models with natural language interfaces on top of a building’s knowledge graph,” said Van Hoof. “This enables facilities teams, CFOs and sustainability officers to make faster, data-driven decisions.”

Van Hoof also pointed to the convergence of IT, operational technology and AI as another big trend for the rest of 2025. “The winners will be those who can bridge facilities management, enterprise IT and AI services into a single operational layer,” he said.

Philip Russo can be reached at prusso@commercialobserver.com.