Real estate sits near the bottom of McKinsey's Industry Digitization Index (McKinsey & Company; JourneyApps).
Below mining. Below transportation. Below education. Only construction, agriculture, and hunting rank lower.
That ranking was first published in McKinsey's "Digital America" report in 2015. A decade later, it's still directionally accurate. And the gap between CRE and the rest of financial services isn't closing — it's widening.
The numbers are brutal
61% of CRE firms still rely on legacy core technology infrastructure (Deloitte 2024 CRE Outlook Survey). Not "could use an upgrade." Legacy. The kind of systems where data lives in silos, integrations don't exist, and every workflow involves manual handoffs between disconnected platforms.
Large CRE organizations use an average of 367 different software tools (CIO Dive), each one creating its own data silo. Each one requiring its own login, its own data format, its own workarounds. Analysts navigate between 5–7 different systems during a single underwriting process, manually transferring data between platforms (Unreal CRM).
Only 14% of CRE companies have well-structured data collection and management processes (Deloitte 2025 CRE Outlook). That means 86% are operating on some version of "we'll figure it out as we go."
And the investment gap tells the story of how we got here: 60% of real estate companies invest just 1–5% of revenue in digitalization, and another 22% invest less than 1% (RealOffice360) — compared to financial services and technology sectors spending 5–10%+ of revenue on technology. CRE isn't just behind. It's spending a fraction of what peer industries invest to stay current.
Why the resistance?
Part of it is structural. CRE has always been a relationship business. Deals get done over dinners, not dashboards. The people who've built successful careers in this industry did it without technology — so the instinct is to view new tools as overhead, not leverage.
Part of it is the workforce. 44% of CRE companies identified keeping up with technology as one of their biggest challenges, according to the National Association of Realtors (NAR 2019 Profile of Real Estate Firms). A KPMG 2018 Global PropTech Survey found that 66% of real estate decision-makers had not implemented a digital innovation strategy at their firms.
And part of it is the vendor landscape. CRE professionals remember legacy analytics platforms that were expensive, clunky, and hard to integrate. The skepticism earned from those experiences is legitimate.
But the market isn't waiting for the industry to get comfortable.
The aspiration-reality gap
Here's what makes 2026 different: the gap between what CRE leaders say they want and what they've actually done is closing — fast.
Deloitte's 2025 CRE Outlook found that 97% of respondents are committed to AI-enabled solutions, with early-stage implementation jumping from 28% to 40% year-over-year (Deloitte 2025 CRE Outlook).
JLL's 2024 Future of Work Survey found that 90.1% of companies expect to carry out CRE activities with AI supporting human experts within five years, and over 60% have begun piloting AI use cases (JLL Future of Work Survey 2024). Among the roughly 7,000 global PropTech companies, about 10% (700) currently provide AI-powered solutions, according to JLL Spark research (JLL Spark).
The Dealpath "State of AI Readiness" survey (October 2025, 100 institutional investors managing >$500M in assets) found 100% have adopted or plan to adopt AI (Commercial Observer), yet 93% cite significant barriers: lack of internal expertise (43%), regulatory/compliance concerns (42%), budget constraints (39%), and decentralized data (36%) (Dealpath).
The intent is universal. The execution is not.
The firms that figure this out first don't just save time. They change their competitive position.
When your competitor can screen 4x more deals, extract data in minutes instead of hours, and produce IC memos in a fraction of the time — they're not just more efficient. They're seeing opportunities you're not. Responding faster than you can. And closing deals while your team is still building the model.
Morgan Stanley identified brokers and services as showing the highest potential for automation gains within real estate, with AI potentially boosting operating cash flow by 15% or more (Morgan Stanley). The technology gap in CRE isn't a fun fact for conference presentations. It's a competitive vulnerability with a ticking clock.
This is Part 3 of a 5-part series on the hidden time tax in commercial real estate. Next: what insurance, private equity, and mortgage lending already figured out about automation — and what CRE can steal from their playbook.
Written by Ian Wright
