(July 19, 2002)—RealPage, Inc., a leading provider of property management products and services, today announced that it has completed the acquisition of YieldStar, a revenue management system for the multifamily industry, from Camden. YieldStar is designed to help property owners optimize pricing of apartment inventory using sophisticated yield models that adjust apartment rents in real time to reflect imbalances in supply and demand.
According to Paul Mitnick, chief product officer of RealPage, “YieldStar provides an excellent, field-tested foundation for our OneSite© Revenue Management system, which will be released later this year. Our revenue management design team has been working closely with Camden since early this year and together we have defined enhancements based on feedback from actual usage of the system. With the addition of real-time data from popular property management systems, including OneSite, Rent Roll™ and AMSI, and comparable peer pricing provided by M/PF Research, a wholly owned subsidiary of RealPage, the acquisition of YieldStar provides a platform for a fully functional yield management system for the multifamily industry.”
Laurie Baker, vice president of property services for Camden, added, “Yield management is an accepted method of pricing in other sectors of the economy, such as the airline and the hotel industries. However, the apartment industry still relies on manual methods to set prices that, in many instances, are far from optimal. By applying state-of-the-art yield management techniques to our industry, we hope to improve shareholder value significantly by optimizing the revenue generated from the more than 52,000 apartment homes owned by Camden around the country.”
Steve Winn, chief executive officer of RealPage, went on to say, “In addition to extending the capabilities of YieldStar, we intend to price OneSite Revenue Management so that everyone can afford it. Other revenue management solutions on the market, including YieldStar, were priced so high that it took a leap of faith to license them. Once implemented, annual access fees for OneSite Revenue Management will be priced to achieve a very rapid return on investment for our clients.”
RealPage believes that active client participation is critically important to the development of world-class products, and the company is expanding the group of property owner/managers who preview the initial system by holding executive-level revenue management summits in August and September to demonstrate the inner workings of the system. Input received from these summits will be factored into subsequent releases of the product.
The summits will discuss eight elements of revenue management:
| Competitive Rent Analysis. Methods of establishing and maintaining amenity-based prices for each unit and floor plan, factoring in comparable peer pricing. | |
| Lease Management. Methods for capturing prospect preferences, optimizing the selection of available units and providing coaching tips to help leasing professionals improve closing ratios. | |
| Supply Forecast. Methods for establishing a forecast of weekly supply for each floor plan based on vacant units, unassigned expiring leases, unassigned notice-to-vacates and early lease terminations, adjusting for anticipated make-ready days. | |
| Demand Forecast. Methods for establishing a forecast of weekly demand for each floor plan based on projected close ratios computed using a statistically validated probability inference engine that is applied to the prospect pipeline. | |
| Pricing Engine. Methods to price units in real time based on statistically validated price elasticity models that predict the relationship between price and imbalances in supply and demand for unstable, stable and lease-up communities. | |
| Lease Term Price Adjustments. Methods to adjust pricing to reflect nonoptimal lease terms for both lease commencement dates and lease expiration dates. | |
| Renewal Price Adjustments. Methods to adjust pricing to optimize renewal pricing applying user-defined adjustments to the price to reflect factors such as the cost for a resident to move and the savings on make-ready costs, turn vacancy and other related factors. | |
| Concession Price Adjustments. Methods to manage concessions as a marketing tool that gross up net effective base rents computed by the pricing engine. |
Principals or officers of owner/manager companies interested in attending a summit should contact RealPage at revenuemanagementsummit@realpage.com.
RealPage is headquartered in Carrollton, Texas, a suburb of Dallas, with an office in Burlington, Vermont. It is the combination of five industry leaders: Rent Roll, Inc., the largest developer of multifamily property management software; RealPage Communications, Inc., the premier designer of custom web sites for the apartment industry; M/PF Research, Inc., the leader in apartment market research; ChannelTECH, Inc., a leading developer of facilities management applications for handheld wireless computing devices; and YieldStar, a leading developer of revenue management software for the multifamily industry.
Camden is a real estate company engaged in the ownership, development, acquisition, management and disposition of multifamily apartment communities. Camden owns interests in and operates 146 properties containing 52,175 apartment homes in the Sunbelt and Midwestern markets from Florida to California. Upon completion of three properties under development and the expansion of an existing property, the company’s portfolio will increase to 53,542 apartment homes in 149 properties.