Carrolton, Texas–Property owners and managers often want to utilize revenue management without having to incur the costs and staffing to support it within their company. RealPage Inc. now has a solution for those firms. It is offering outsourced revenue management advisory services built around the YieldStar Price Optimizer solution, and staffed with a team of 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,” says 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) has proven to deliver a significant advantage to properties that have used it, delivering a two to five percent revenue performance over market on a sustained basis, in up and down market conditions, on varying asset types throughout the country, according to RealPage.
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“We wanted to change the outdated methodologies that were used in setting rents at our communities,” says Stephen Adams, senior vice president of asset management at LaSalle Investment Management. “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. 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,” adds Adams.
YieldStar monitors pricing and revenue performance LaSalle’s sites daily, collaborates closely with each of their fee managers and provides consolidated reports. This way LaSalle knows what’s going on across its portfolio.
“Our industry is different from airlines, rental cars, hotels and other businesses that use revenue management,” says 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.”
“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.”