Property managers can adopt revenue management with limited up-front investment
(March 1, 2010) — RealPage, Inc., (www.realpage.com), a leading provider of on-demand software and software-enabled services to the rental housing industry, today announced it is offering outsourced revenue management advisory services for property owners and managers who want to utilize revenue management, but do not want to incur the costs and staffing to support it in-house. The service is built around RealPage’s popular YieldStar Price Optimizer solution, and staffed with a team of seasoned, multifamily and revenue management experts.
“At this point, most multifamily owners and operators know they need revenue management to get their pricing right and compete effectively,” said Janine Steiner Jovanovic, president of YieldStar. “But many are hesitant to commit the resources necessary to support the function in-house. Some don’t have enough units to justify the up-front investment and an in-house revenue management specialist. Now, they can outsource the function affordably to experts at YieldStar.”
Revenue management (a more scientific approach to apartment pricing) is being aggressively adopted throughout the multifamily industry. It has proven to deliver a significant competitive advantage to properties that have embraced it, delivering a two percent to five percent revenue performance over market on a sustained basis, in up and down market conditions, on varying asset types throughout the country.
However, resources are necessary to support the shift in pricing and performance management, including training of both on-site and home-office teams, business process change management, and ongoing monitoring and adjusting to achieve maximum results from the system. On average, at least one, dedicated revenue management professional, must be added to support every 10,000 units managed. The YieldStar Revenue Advisory group allows owners and managers to outsource daily pricing and ongoing revenue oversight for any size portfolio, preventing the need to commit internal resources.
“We wanted to change the outdated methodologies that were used in setting rents at our communities. There was a need for our management providers to get on-board with revenue management and we wanted to help guide them in the right direction. Being an institutional investor that outsources management to many different fee managers, this was a complicated process and the team at YieldStar was the perfect partner for us to implement this strategy with,” said Stephen Adams, senior vice president of asset management at LaSalle Investment Management.
“By outsourcing to YieldStar, we’ve got a team of multifamily experts handling revenue management for us, who essentially act like an extension of our team,” continued Adams. “They monitor pricing and revenue performance at our sites daily, collaborate closely with each of our fee managers and provide consolidated reports to us often, so we always know what’s going on across our portfolio. We didn’t have to make the investment to add staff, and we get the benefit of all of YieldStar’s expertise. They have a vested interest in our mutual success and they have done an excellent job serving both our needs as well as the needs of our fee managers. This initiative has lead to more rental revenue and greater confidence in our management providers during such a challenging economic cycle.”
The YieldStar revenue management team’s specialization in multifamily distinguishes it from other providers in the multifamily space. While other providers customize their revenue management software and services for a variety of industries, only YieldStar’s team focuses exclusively on multifamily, using a solution engineered from the ground up for apartments. YieldStar’s team is comprised of seasoned, multifamily veterans with asset management and regional operations expertise, who understand their clients’ needs and objectives and are uniquely qualified to guide them through a successful transition from traditional pricing practices to revenue management.
“Our industry is different from airlines, rental cars, hotels and other businesses that use revenue management,” said Dan Gumbiner, president and CEO for Orion Residential, who owns and manages approximately 6,300 units in seven markets throughout the United States. “It was important to us that we outsource this function to a group that specializes in the multifamily industry and uses technology designed for owners and operators of apartment communities. It makes a big difference working with people who understand our business strategies and can work with us to help achieve our goals.”
For example, pricing strategies sometimes have to be adjusted to conform to business situations that are unique to multifamily, including lease-up, renovation, disposition and refinancing. In these situations, having specialists to leverage within YieldStar, who have a deep understanding of multifamily on-board, has proven to be a significant asset.
While some larger property management companies choose to outsource revenue management, it may be the only solution that makes sense for smaller ones.
“Getting rent pricing right is just as important to us as it is to larger owners, but given our current growth plans, we needed to leverage our small professional team’s time,” said Kirby Sack, CEO for Sack Properties, with 1,200 units in the San Francisco Bay Area. “We were thrilled to learn we could outsource some of the pricing support to experts at YieldStar. Our results have been outstanding.”
Clients of YieldStar Revenue Advisory Services who decide to bring the function in-house at some point are promised a smooth transition. “We’re happy either way: continuing to support our clients as an outside resource, or partnering with them to successfully internalize the function,” said Steiner Jovanovic. “Every client has unique needs, and we’re prepared to service them. Ultimately, our goal is to ensure revenue management is accessible to everyone, and to provide various options to accommodate the needs of all owners and managers within the industry.”
For more information about Revenue Advisory Services, or to schedule an interview with a RealPage executive, please contact Michael Cunningham at firstname.lastname@example.org or 972.820.3409.
Located in Carrollton, Texas, a suburb of Dallas, RealPage provides Software-as-a-Service products and services to tens of thousands of apartment communities and hundreds of thousands of single family rentals across the United States. Its six on-demand product lines include OneSite® property management systems that automate the leasing, renting, management, and accounting of conventional, affordable, tax credit, student housing, and military properties; CrossFire® sales and marketing systems that boost occupancy and build retention; YieldStar® asset optimization systems that maximize asset valuation and investment return; Velocity™ utility management systems that accelerate payments for resident charges; LeasingDesk® risk mitigation systems that reduce a community’s exposure to risk and liability; and OpsTechnology™ spend management systems that help owners manage and reduce operating expenses. Through its Propertyware subsidiary, RealPage also provides software and services to single-family rentals and low density, centrally-managed multifamily housing. Through the Domin-8 acquisition, RealPage is adding additional property management systems to address the small and medium-size business (SMB) segment with Tenant Pro, Spectra, iCAM and other property management systems. Finally, RealPage now offers Infrastructure-as-a-Service to multifamily owners and operators to reduce IT costs and dramatically improve integration performance and reliability. For more information, call 1-87-REALPAGE or visit www.realpage.com.