Why the Real Estate Industry Is Now a Prime Target for Cybercriminals

You’d never leave your office door unlocked. But many firms leave their data wide open and call it ‘low risk.’

In an industry where capital, reputation and relationships define success, a silent threat is gaining ground: cybercrime. While property professionals focus on physical assets, cybercriminals have turned their attention to digital ones. The assumption that cybersecurity is just an IT concern is outdated. In today’s connected market, data is the new property. Those who fail to treat it as such expose themselves to losses that extend far beyond technology.

Cybercrime Has Found a New Target

Real estate was once too analog to interest cybercriminals. That era is over. As global transactions shift online and capital flows through cloud-based platforms, the property sector now offers a lucrative attack surface. In 2023 alone, Business Email Compromise (BEC) scams caused over $446 million in losses to U.S. real estate firms, according to the FBI’s Internet Crime Report.

What makes real estate cybersecurity so fragile is the disconnect between high-value transactions and weak digital infrastructure. Deals involving millions are often conducted through unsecured emails, shared drives and outdated software. These conditions make the sector one of the most exposed industries, yet one of the least prepared.

Data: The Asset Everyone Overlooks

Today’s cybercriminals aren’t just after money, they’re after access. In real estate, that means sensitive data: identification documents, bank details, contracts, proof of funds and investor records. On the commercial side, leasing data, tenant portfolios and financial models are also vulnerable.

This shift makes data protection in real estate a core part of asset management. Yet many firms lack consistent policies for access, encryption or retention. Treating digital assets casually is the equivalent of leaving your development blueprints or title deeds on a park bench.

In a digital-first market, access, control and encryption are the new pillars of value preservation. That’s why data is the new property and mishandling it puts the entire transaction lifecycle at risk.

Vulnerabilities Across the Property Lifecycle

Cyber threats don’t just strike once, they surface at every phase of the property lifecycle. Each stage presents distinct vulnerabilities that are often underestimated:

• Due diligence: Confidential files are shared through unsecured platforms with multiple unknown stakeholders.
• Deal execution: Attackers impersonate lawyers or brokers to intercept wire instructions.
• Asset and tenant operations: Smart buildings and digital property apps create new points of entry.
• Post-close: Forgotten accounts, legacy data and inactive cloud folders become long-term liabilities.

Each phase introduces a different type of digital risk. Managing these exposures requires real estate digital risk management practices that are proactive, structured and continuous.

Tactics of the Digital Intruder

Cyber threats in the property industry have grown in precision. Attackers exploit both digital systems and human behavior to bypass defenses.

The most frequent method is Business Email Compromise (BEC). Hackers pose as trusted contacts to reroute funds or access documents. Phishing attacks mimic deal updates or cloud links to capture credentials. Ransomware locks down systems and demands payment for access to critical data. Increasingly, social engineering and even deepfake audio are being used to manipulate decision-makers – as in the 2024 London case where a spoofed voice memo from a “CEO” authorized a $2.4 million transfer (Forbes, “The Rise of Deepfake Fraud in Real Estate”).

These evolving tactics show that cyber threats in the property industry are no longer about brute force. They’re about exploiting trust – the very currency that fuels real estate.

Why the Industry Still Isn’t Ready

Many firms still treat cybersecurity as an IT issue, not a business risk. The property sector’s culture – decentralized, relationship-driven and operationally lean – doesn’t lend itself to structured digital protection.

Smaller operators often lack internal IT resources. Larger players might rely on outdated systems or fragmented vendor stacks. In many cases:

• Deal files are shared via email chains.
• Personal devices are used for negotiations.
• Passwords are reused across critical platforms.

This mindset creates systemic exposure. Without embedding cybersecurity into leadership and strategy, even the best projects remain vulnerable. Real estate cybersecurity must become part of every firm’s executive-level conversation.

The Price of Exposure: Real-World Consequences

A cyber breach doesn’t just disrupt IT systems, it undermines deals, damages reputations and erodes investor trust. In real estate, trust is the intangible asset that underpins every transaction.

The consequences include:

• Terminated transactions: Deals fall through due to compromised data or disrupted communications.
• Regulatory investigations: Breaches often trigger audits, penalties or litigation.
• Investor exits: Capital partners may pull out when risk exposure isn’t managed.
• Brand damage: Firms lose long-earned reputational capital.

One example: In 2022, a U.S. title company lost $1.5 million in a BEC scam and faced litigation from both the buyer and the seller (ALTA – American Land Title Association). These outcomes are not edge cases, they’re the new normal.

Data Defense as Strategic Imperative

Protecting digital assets is now central to sustaining performance in real estate. As deals become more global and platforms more interconnected, digital security becomes a core part of value creation.

Real estate digital risk management should follow the same rigor as legal, tax or title review. Firms that integrate cybersecurity early – in acquisition planning, vendor onboarding and capital communication – build resilience into every deal.

When investors see that a firm treats digital security with discipline, their confidence grows. In this way, data protection becomes a trust multiplier and a strategic advantage.

Objection: “It’s Just a Cost Center”

Many firms see cybersecurity as a sunk cost – infrastructure that adds no value. That’s a flawed assumption.

Cybersecurity is like insurance and structural due diligence: you don’t need it until you do and then it’s too late. Beyond crisis prevention, good cyber hygiene protects deal flow, reputation and investor alignment. These are revenue-preserving outcomes.

Today’s capital partners – especially family offices and institutional investors – are increasingly alert to cyber threats in the property industry. Firms that signal discipline and resilience stand out in a risk-conscious market.

Five Strategic Moves to Protect Data Like Property

If data is the new property, it deserves operational discipline and strategic visibility. Here are five ways to start protecting your digital assets today:

1. Audit Your Data Asset Map – Identify every type of data your firm handles. Map where it resides, who has access and how it’s protected. Treat this as a portfolio review.
2. Include Cyber Risk in Investment Memos – Add a short cyber risk disclosure to deal documents. Normalizing this shows investors you’re forward-thinking and transparent.
3. Create a Deal-Specific Cyber Protocol – For each high-value transaction, define digital ground rules: approved platforms, multi-factor authentication and secure fund transfer verification.
4. Designate a ‘Data Steward’ Role – Assign a senior leader to oversee digital hygiene across deals. This creates accountability and elevates security to a strategic level.
5. Use Cybersecurity as a Differentiator in Client Pitches – Highlight your data protection protocols to build trust. Security can be a signal of reliability – especially with risk-sensitive investors.

Trust Is the Real Asset

You’d never leave your office door unlocked but many still leave their data exposed. In an industry built on confidence and continuity, digital vulnerabilities are more than a technical flaw, they’re a business risk.

Cyber threats in the property industry are real, growing and increasingly sophisticated. But this isn’t about reacting to disaster, it’s about leading with foresight. The firms that treat data as a core asset and secure it accordingly will preserve their deal flow, protect capital and earn lasting trust.

If you advise, manage, or invest in real estate, the next move is clear: review your data exposure and act decisively. Because in a market where every deal flows through a digital network, securing your data is securing your future.