Multifamily and the Proptech landscape

Published on
March 2, 2023
March 2, 2023

One tech won't deliver everything, for neither real estate business, often the careful meshing of multiple solutions will equal more than the sum of parts. There is 16,000+ Proptechs in the ecosystem (increasing every day as Proptech + Cleantech lines blur) so there are many solutions to pick from.

What's trending in the multifamily markets globally and how does that tie into tech adoption? We are providing research to many of our clients on best fitting partners. Here's a high level overview of market.

The market

The multifamily market refers to properties that have multiple units within a single building or complex. These properties can range from small apartment buildings to large-scale complexes with hundreds or thousands of units. The market is driven by various factors such as population growth, urbanization, changing demographics, and lifestyle preferences and increasing demand of affordable housing. In 2020 the global multifamily real estate market size was valued at USD 1.14 trillion and is expected to grow at a compounded annual growth rate (CAGR) of 5.1% from 2021 to 2028.

North America is the largest market for multifamily real estate, accounting for over 60% of global market share. In the U.S., apartment buildings, condominiums, townhouses, and mixed-use developments, are one of the largest asset classes in the world. Approximately 44 million residences are considered multifamily and they account for 31% of all U.S. housing.

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Overall U.S. Commercial Median Sold Price Per Building Area

Europe is the second-largest market for multifamily, accounting for approximately 20% of the global market share. The Asia-Pacific region is the fastest-growing market for multifamily, with a CAGR of 7.3% from 2021 to 2028. China is the largest market in this region, followed by Japan and India.

Population growth is the biggest driver for fast growth. Also, rapid urbanization, in conjunction with rising middle class and foreign investment is accelerating the market. Additionally, the region can count on a lot of governmental support: Governments in the APAC region are investing in affordable housing initiatives and infrastructure development to support urbanization and economic growth.


Unlike single-family homes, multifamily homes are primarily owned by institutional owners and investors (and it has been in the news some of the largest institutional players buying at scale to find a yield), who mostly rely on a property management systems (PMS). Especially with continuous grow in the market, property managers are faced with increasingly complex operations. To manage their properties efficiently, a good PMS, that can automate tasks, streamline workflows, and improve communication with tenants, is a necessity.

PMS automate many tasks that would otherwise require manual labor, such as rent collection, lease management, and maintenance scheduling. This will save property managers significant amounts of time and reduce the risk of error. A good system can also improve communication between property managers and tenants. Tenants can use the system to report maintenance issues, pay rent, and request assistance, while property managers can use it to send announcements and important updates.

A PMS will also provide intelligence (data analytics) that can help property managers make (better) informed decisions about their operations. This allows property managers to gain insights into guest behavior, occupancy rates, and revenue management.

Additionally, a decent PMS system can help ensure the security of sensitive data, such as tenant information and financial records. In recent years, there have been several high-profile data breaches in the hospitality industry. As a result, PMS providers are investing more in cybersecurity to protect sensitive guest information.

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The PTC: The Bridge Between Technology + Real Estate

Also, the integration of smart technology, such as IoT devices and artificial intelligence, is something we see more often.

Unfortunately, even with new enhancements, the currently existing operating systems often don’t meet the needs of modern owners and operators. The PMS often create extra hours of extraction work, lack interoperability, and often require customers to build custom software.

The opportunities

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North America Property Management Software Market

There is obviously a need for improvement in this sector and thus an opportunity for startups. If startups can create new products that can provide crucial improvements to the PMS platforms, they will organically become consequential. We believe that institutional investment into the multifamily industry will continue to grow significantly over the next several years. The hybrid-working model causes a shift from investing in office real estate to multifamily and we also see a shift from single-family rentals to multifamily. With growing investments in the multifamily sector, also the number of potential software buyers emerges. Additionally, the tightness in the U.S. labor market is an opportunity for software companies to come with solutions that can replace task-based work.

These are not the only reasons for the increasing need for more tech-solutions. The pressure to efficiently manage properties is growing. Also, more and more small and medium size business operators are being consolidated into larger companies and are required to operate like franchises where decisions are made regionally.

A great opportunity for startups lies in the acquisition and development category. They can generate significant value if they can provide an operating system that manages how firms can make investing decisions (what types of properties to buy, how much to pay, what zoning precedents allow them to build on site, and more).

In conclusion, we can say that PMS there's a lot of opportunity in this space and we are seeing a number of very interesting techs coming in and solving a number of (major) pain points for our relationships.

Exciting times ahead.

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