By Joe Bousquin, Multifamily Editor and Writer

When RealPage President Steve Winn unveiled Peer Watch, a new market analysis tool that lets multifamily professionals see how their properties stack up against the competition at the 2009 RealPage User Conference, he told attendees it was "the eighth wonder of the multifamily world," a measuring stick that would finally deliver the "definitive picture of the U.S. apartment market."

While those are strong words to live up to, Winn’s confidence in Peer Watch, which is scheduled for general release this fall, hardly oversteps its promise. The culmination of nearly 15 years of technology development within the company, Peer Watch mines real-time operating data from RealPage’s suite of multifamily software applications to analyze market conditions on a national and market-by-market basis. Because it pulls that data from the on-site systems that RealPage customers use at their properties every day, it heralds a degree of accuracy never before seen in U.S. apartment analytics.

"Of all the things that we sell, the implications of this particular product, in my opinion, are extremely broad," Winn said.

To understand why, it’s helpful to look at how traditional analysis has tackled the apartment market to date. Until now, most information services and analytical tools have relied on apartment listing and availability information. Those services track how many units are being advertised in a given market, and the rents apartment operators are asking for them. Yet, because concessions or discounts may emerge to get a resident to sign a lease, calculating effective rents in a given submarket has always been an inexact science. Add to that the fact that listings don’t always match actual availability, and you’ve got a fuzzy number for occupancy rates, as well. A two-bedroom apartment advertised for $1,200 in Nashville, for example, may only actually rent for $1,150, a difference of more than 4 percent, while the ad itself might be used for three available units, instead of just one.

In contrast, Peer Watch looks at actual operating data for 13,000 properties nationwide. By pulling hard, aggregate data from various RealPage applications at its customers’ apartment sites, Peer Watch can display actual, relative performance numbers for individual properties, or even entire portfolios. Want to see how your Class A, renovated midrise in Portland’s Pearl District compares to the competition? Simply run a property analysis to see what you’re getting for your two bedrooms against the actual, effective market rent for all relative two bedrooms in your area. With the push of a button, you can see how your occupancy rates measure up as well.

"To this point, all of the research services have only used market facing data—they only look at what people are asking for," said Jeffrey Roper, principal scientist at RealPage’s YieldStar unit, which developed Peer Watch. "Peer Watch is looking at what they actually do. It asks, ‘What closed the deal on this thing?’ That’s the difference: we have visibility all the way down to the actual lease transaction."

And because it tracks all active leases at a site—not just new move-ins—it also has visibility into a broad swath of the rental market that’s largely overlooked in traditional analytic tools: renewals. Because renewals can’t be tracked through listings alone, they’re often omitted entirely. "You don’t get any information on renewals by looking at published asking prices," Winn said. "At a typical property right now, renewals are 45 percent of your leases. If you’re ignoring them, you cannot possibly get to the right answer."

Peer Watch sees actual prices for both renewals and new leases, so it can accurately arrive at an effective market value for any apartment. It also has a real-time bead on occupied and available apartments, so occupancy is accurate down to the unit level. As a whole, that means Peer Watch can show you how your portfolio, single property, or even individual two-bedroom apartment is doing compared to the actual performance metrics of the entire market. Operators say it’s this degree of granularity and accuracy that sets Peer Watch apart.

"I’ve been waiting for a product like this for a long time," said Chris Long, director of pricing and revenue management at Denver-based UDR. "This is going to change the industry quite a bit, especially in this market. When you can see that the rest of the market is off 7 percent, and you’re only down 5 percent, it gives you the ability to say being down 5 percent is a good thing. It brings a whole new element to the equation, and has the potential to be very powerful."

And that may only be the beginning. While the application’s initial focus will be on rents, occupancy rates, and price per square foot on a market-by-market basis, Winn envisions Peer Watch as a powerful analytics tool that can see past price to gauge everything from operational inefficiencies to a given fee manager’s performance capabilities. In its farthest-reaching application, it even has the potential to place relative values on assets themselves, or give an accurate, comprehensive view into the health of the U.S. apartment market.

"Over time, we want to see those benchmarks expand," Winn said. "For example, we'd like to see the credit worthiness of an apartment asset relative to its peers, and how that has changed over time. You could look at the delinquency rates, too. What are your make-ready days? How fast do you process work orders? How efficiently do you buy? What percent of your spend is in-network, versus on the spot market? By looking at that number, I can tell really quickly how well you manage that apartment asset."

For UDR’s Long, the implication of that kind of analytical firepower goes far beyond rents and pricing. "It’s got the potential to reach out to the investment community and change that landscape, too," Long said. "It will be a lot easier to analyze potential deals and find potential opportunities. Even for the analyst community, it has potential to give visibility into what’s going on out there."

With Peer Watch, that visibility should be clearer than ever before.