Proptech in 2023

Proptech is in for a year of mergers and acquisitions — and closures — according to venture capitalists and principals in the field. Plus, Los Angeles’ office market better hope for a strong 2023 given what it was facing at the end of 2022. Happy new year.

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— Tom Acitelli, Co-Deputy Editor

Will Proptech Continue to Consolidate in 2023?

Coming out of a massively disrupted macroeconomic landscape in 2022, major questions abound about the value potential of proptech startups. That includes whether tech newbies will continue to be targets for consolidation through mergers and acquisitions or takeover by traditional real estate firms — or just fold under the pressure. In general, proptech experts are quick to say that all of the above will happen in 2023, but although the consolidation trend has already started, it may not accelerate right away in the new year.

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Los Angeles Ends 2022 With a Vacancy Problem

Big office tenants are cutting excess space and reevaluating overall workspace needs, but a report from NAI Capital still maintains the sector is on a “slow path to recovery.” Landlords have posted declining occupancy rates due a larger flight to quality and to major cutbacks in the tech and media industries, which have for years been major drivers in L.A. Demand for office space continued to decline as the vacancy rate climbed 110 basis points from last year to 15.2 percent in the final quarter of 2022, according to NAI. The average asking rent was down 2 cents from the start of the year at $3.48 per square foot.

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