Introducing Market Analytics: The New Multifamily Market Research Standard

The new wave of multifamily market research has arrived, and it’s more telling than ever.

Market Analytics, the industry’s only transaction-driven analytics platform that assembles full market transparency, launched in July, is a deeper dive of market data that more intensely combines the power of RealPage, Axiometrics, MPF Research and Real Capital Analytics.

Its simple, yet sophisticated, view of property performance and standing at the submarket level is casting a new look on how investors are going about their business of buying, selling and holding properties, industry professionals say.

Paul Vastag, Vice President of Business Intelligence at Continental Properties Co., Inc., said Market Analytics brings together the floor plan-level data with the best-in-class submarket information that hasn’t been available until now.

Continental Properties, which has 15,000 units in 15 states and is an NMHC Top 10 developer, was among seven companies that beta-tested Market Analytics before its debut at RealWorld 2019. He said the solution and its wealth of market data allow Continental Properties to make the best decisions based on the best data available when developing its portfolio.

“It’s about mitigating risk,” Vastag said. “We have properties at $1,200-$1,300 a unit with an 8 percent margin. If we don’t hit that, we have a major problem. We need to be careful about mitigating risk in terms of pursuit risk cost.”

The industry’s most comprehensive look at performance data

After it purchased Axiometrics in 2017, RealPage said it would blend the granular data-harvesting style of that acclaimed company with its own market intelligence and Real Capital Analytics, a leading authority on multifamily sales transaction data to produce the industry’s most comprehensive look at available transaction performance data.

Market Analytics provides monthly submarket transaction performance metrics, artificial intelligence-enabled market, submarket, and configurable asset forecasts through the industry’s most robust data set. Never before has the industry had access to precision lease transaction data at such a granular level.

The solution goes beyond “asking rents” with true lease transaction data providing full visibility into the entirety of rent rolls and financials, plus AI-infused forecasts, rent comps and sales/loan comps that provide full transparency so operators can make decisions for portfolios based on seeing the entire picture on market conditions.

“It’s all about driving your vision,” said Market Analytics Senior Vice President Justin Alanis. “Asking rents and other surface-level information is not the true picture of what’s actually happening in the market, and it proves to be a fairly lagging indicator of true market activity.”

Additionally, RealPage is bringing together the vast pool of data sources to provide instant valuation estimates on properties all across the country – with intuitive configurations to greatly expedite potential deal analysis and asset screening.

A leading indicator based on lease transaction data

The integration of lease transaction data provides accuracy of real-time information on every single piece of revenue that operators and investors could possibly want, Alanis added.

“It acts as a leading indicator rather than a lagging indicator, things like renewal rates, effective rents, trade-out value of rents,” he said. “It’s much more accurate information that gives you a sense of what’s truly happening in the market that allows you to make better individual asset decisions.”

In addition to the exclusive lease transactional data, Market Analytics provides individual asset information – including current and historical floorplan level rents and “behind the veil” details on owners and managers – using RealPage’s traditional market research method pioneered by Axiometrics, as well as sales comps through Real Capital Analytics.

“We’re really marrying up this granular level asset information with really detailed and more accurate in real-time and granular submarket information,” Alanis said. “Which markets they want to get into, which markets they want to exit. We’re talking big investment dollar decisions that are being relied upon based off of this data.”

Clearer visibility to get a better market picture

Until now operators, developers, and investors have been making bets on tens of millions of dollars with limited transparency. RealPage Vice President of Asset Optimization and Deputy Chief Economist Jay Parsons told RealWorld attendees that Market Analytics and its wealth of data provides a clear view of performance.

“You’ve had data, but it’s really only covering a small piece of the pie, including asking rents, roughly 5 percent of the picture around you,” he said. “It’s important, but not enough. Our desire is to give you full transparency. To bring better visibility into the marketplace, with a new solution that helps us get the transparency we really need to better inform investment decisions.”

The other 95 percent of the picture arrives based on executed leases (new lease trade-out, average vacant days, lease terms) and executed renewals (retention rates, renewal trade-out, lease terms) sourced from millions of units derived directly from actual rent rolls.

Getting to the crucial data quicker, faster

Vastag said the solution’s benefits were quickly realized when Continental Properties began beta testing earlier this year. Prior to Market Analytics, Continental’s business intelligence staff had to work from two different playbooks to get the data it needed to make investment decisions.

“Prior to Market Analytics, the standard was to have two screens at workstations with Axiometrics on one side and MPF Research on the other.”

Getting detailed, accurate property data quickly is crucial to mapping the future of Continental Properties.

“Finding those data opportunities for deals, that’s what we use the data for,” Vastag said. “Helping the team finance development, investor relations and present to the investment community in a way that makes sense. We’re doing 12 new deals per year. For every one of those, we don’t have time for data schlepping.”