The real estate industry is a target for security threats and cyber attacks. While the widespread adoption of proptech during the pandemic helped minimize workflow disruptions and created more accessibility, it also brought an increase in security risks. As commercial real estate firms incorporate more digital solutions into operations, data protection becomes increasingly critical. 

The biggest challenge? The CRE sector at large lacks clear protocols for effectively addressing these risks, especially around cybersecurity. It’s high stakes as real estate companies look to protect company data, financial records, tenant information, and property details. 

To stay ahead of bad actors, it’s important to first understand the biggest threats to the industry. Firms can then pursue technologies that are built with cybersecurity top of mind. 

The impact of cyber threats on real estate 

For 2024, the global average cost of a data breach is USD $4.88M. That is up 10% from 2023 and is expected to rise in 2025. In the U.S. the average is even higher, at $9.36M this year, according to data from Statista. After an initial incident, real estate firms often feel the reputational and financial damage for months or even years due to legal issues, fines, and lost clients. 

Cyberattacks are not only more common, they’re becoming more calculated and sophisticated. For real estate, protecting against these attacks means embracing AI-powered defenses and putting more focus on supply chain security. 

What are the biggest security risks the real estate industry faces today? 

CRE firms have a range of threats affecting both clients and business operations. Some are more visible, like ransomware attacks or breaches that target confidential information. Others may be less obvious. Here are five critical risks CRE firms face: 

• Ransomware attacks: A dominant risk, these attacks halt operations and hold critical data hostage until a ransom is paid. Downtime and data loss often lead to long-term consequences. 
• Supply chain risks: Even if a firm's systems are secure, the interconnectedness with vendors and third-parties creates risk along the real estate supply chain if these partners and stakeholders have weak security practices.   
• Business email compromise (BEC): Social engineering and fraud account for major financial losses. Phishing especially is on the rise, with real estate employees falling into more sophisticated and well-conceived traps. 
• Data breaches: Probably the most well-known security risk among consumers, data breaches expose personal data and financial information, which can lead to catastrophic reputational damage and large fines. 
• IoT vulnerabilities: The growing use of Internet of Things (IoT) devices in commercial buildings has expanded the attack surface. Devices can be exploited to gain unauthorized access to physical buildings and stored historical data.

3 steps to address security threats in the industry 

Digital transformation in any industry will drive innovation and efficiency, but it also increases the need for strong security measures and cybersecurity practices. Here are three critical and proactive steps firms can take to be more secure and protect confidential information. 

Implement robust cybersecurity practices

Many digital systems have built-in cybersecurity features, but depending on a firm's investment in that technology, those features may not be rigorous enough. Tech investment should always include strong cybersecurity capabilities, and organizations should keep their systems updated to ensure they are protected against the latest threats. Additionally, training sessions for employees helps to create a culture of vigilance and ensure cyber threats like phishing can be easily recognized and responded to. 

Enhance access controls

Access control plays a large part in maintaining security. Whether it’s entry to a property or to servers and computer systems, advanced controls can safely restrict access to only those stakeholders that need it. High-quality surveillance and monitoring solutions add an additional layer to make sure unauthorized personnel are not where they shouldn’t be – whether it is in specific buildings or in digital resources like client records.

Develop risk management plans 

Create a timeline for conducting risk assessments — perhaps quarterly or even twice a quarter to uncover new threats or vulnerabilities. In the event of a crisis, such as a data breach, it’s important to have a developed crisis management plan for a swift and effective response. This will help firms get ahead of crises and protect the organization. Adequate insurance coverage as part of a risk management plan can help mitigate financial losses. 

Prepare for the future of security

The security landscape is constantly and rapidly evolving. To guarantee protection for both business and client data, real estate companies need airtight data security solutions. These systems and protocols have a real impact on preventing attacks and breaches. ShareFile helps real estate firms protect data while streamlining workflows, maintaining end-to-end productivity, and delivering an exceptional client experience.

Learn how ShareFile can help commercial real estate firms protect sensitive data and keep client information secure.