Smart Building Adoption Still Limited in Multifamily Sector Despite Industry Momentum

Written by:

Rudi Davis

Date:

29 Oct 2025

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The multifamily industry’s shift toward smart building technology has not matched the widespread marketing narrative. While “smart apartments” are frequently promoted, the actual integration of smart building systems in multifamily properties remains low, according to Lance Platt, President and CEO of Groove Technology Solutions.

“It’s not marketing hype any longer. I think smart building technology and prop tech solutions are here for multifamily, for sure, but it’s still a relatively low penetration,” Platt said. Groove Technology Solutions operates as a systems integrator and managed service provider for enterprise-level properties, including multifamily and student housing, and has observed the gap between industry expectations and on-the-ground realities.

A key reason for this limited adoption is the underperformance of early smart building technologies. Platt explained that the initial wave of solutions did not meet the actual needs of the industry, despite strong marketing efforts.

“The first generation of smart building technology really didn’t deliver on the needs of the industry in the way that maybe they sold themselves to deliver on,” Platt said. “It was a great way to get smart locks into apartment buildings, for example, right? But it really didn’t pack the punch of what smart building technology can really do from an energy management perspective, or really tying into all the features and benefits of what leak detection can actually do.”

This limited integration led to skepticism among property operators who invested in systems that promised advanced building intelligence but only provided basic device connectivity.

The credibility of the smart building sector has been further challenged by market volatility. Platt pointed out that increased merger and acquisition activity has caused confusion over which companies provide real value and which are simply following trends.

“There’s been a lot of M&A activity in smart buildings, so a lot of consolidation and even just selling. And so it’s created a lot of confusion around who are the players, and where do they fit, and who offers the right value proposition,” he said.

This instability has made it harder for property operators to find reliable technology partners, contributing to slow adoption across the industry.

Despite low current penetration, Platt believes the industry is nearing a significant turning point. Larger portfolios are beginning to standardize on smart building technology, focusing on partners who can offer comprehensive solutions rather than isolated products.

“A lot of the big portfolios are really standardizing around smart building tech right now, and they’re trying to find the right partners to help them get there in delivering the right solutions for smart building,” Platt said.

The main challenge is for operators to identify solutions that deliver real operational value instead of relying on marketing claims. As property owners sharpen their evaluation processes, vendors will need to show measurable returns on investment beyond basic device integration.

After previous experiences with overpromised technology, the multifamily sector is moving toward a more deliberate approach to smart building adoption—one that emphasizes proven performance over promotional claims.