Source the Right Deals with Asset Intelligence

by Analytics Contributor

RealPage powers multifamily valuation models with machine learning algorithms and industry-leading data.

Valuing real estate is a complex yet critical task. An abundance of capital and vibrant marketplaces (over $300 billion was transacted in the last year) mean high precision and rapid evaluations are necessary to compete in the marketplace. While understanding the fundamentals that fuel cap rates and future yield have always been important, today’s tight cap rates in the lower 4% range mean that precision is more critical than ever before.

Asset Intelligence: Background

Crucial factors such as rent and occupancy growth, embedded rent rolls, expense structure and cap rates all impact the price of an asset. As such, it’s important to have the ability to pull this data from comparable assets. Equally important is the ability to model these metrics in a way that is historically proven to accurately reflect a community’s value.

RealPage is fortunate to have deep, accurate information about all facets of property operations which we’ve been collecting and reporting for decades. Our broad national footprint encompasses every market, asset type and class and through our partnership with Real Capital Analytics (RCA) we have the most accurate and complete data on community sales and cap rates.

This data is used to power machine learning models that examine rent and expense structures as well as physical and qualitative attributes of the property itself in the context of the local market to derive the building blocks for underwriting. The final step is to create a valuation. These models are vigorously back-tested on historical sales and operational data and can continually learn as they are introduced to more data.

Asset Intelligence: What it Means for Your Business

RealPage’s extensive data coupled with expert knowledge on the marketplace lends itself to first-in-class market intelligence. Included below is a slate of variables at your fingertips to help empower you and future strategic decisions.

More capital than ever is funneling into multifamily, guided by excellent tailwinds and the relative resilience of the sector during the most recent economic downturn. As multifamily becomes an increasingly popular investment vehicle, acquisitions will face rising levels of competition. As a result, gaining any and all competitive edges in the marketplace will come to the forefront of investment strategy going forward.

Asset Intelligence Data Summary: Key Stats and What They Mean



A one-size-fits-all approach to underwriting is an approach that simply falls short in today’s marketplace. Market-level nuance and subsequent risk adjustment differs substantially between markets. Meanwhile, the specific strategy tied to property characteristics such as asset class, building type, and even unit count will also differ based on geography and – perhaps more importantly – business objectives.



As such, RealPage’s extensive data set covering some 48,000+ multifamily properties (totaling more than 10.3 million units across 500+ individual markets) provides unrivaled coverage to help you source the right deals with appropriately tailored assumptions that align with your strategic objectives.



Property-specific performance is yet another critical component of sourcing deals. Further, this ability to view data on occupancy, rents, and rent change (with data dating back as early as 2016) helps empower you with the kind of insights necessary to accurately assess property-level potential.



Surveyed performance data (rent growth, occupancy, etc.) is useful in its own right but RealPage’s wealth of data extends beyond market surveys and into deeper, more granular transactional information. In other words, key metrics such as property expense and income allow you to gain insight into the ever-important NOI datapoint. This provides even further confidence to accurately underwrite and assess property level expectations.




Performance data for individual properties is important, but supplemental data on property valuation is equally important for sourcing deals. RealPage’s partnership with RCA gives you the ability to see the ever-important capital influence behind individual properties. This data from RCA includes over 100,000 sales and refinance records across 48,000+ properties with history dating back to the early 2000s. Given the cyclical nature of real estate (including real estate investment flows), such an extensive set of historical data gives you additional ability to assess and adjust for risk/reward.



For more information about Asset Intelligence, learn more here.