ATLANTA, GA - What do you want and when do you want it? For Waterton Residential, how prospective residents answer these questions on guest cards is essential to price setting for the over 15,000 apartment units in 34 communities the firm manages. That is one reason Waterton implemented the LRO multifamily revenue management and forecasting system from The Rainmaker Group.
Another reason was Rainmaker's ability to interface with Yardi Systems, Waterton's property management system provider. Rainmaker specializes in automated revenue management software and services to the multifamily housing industry and worked closely with Yardi to develop a jointly supported data interface that automatically exports historical, current, and future data which the LRO system uses to base forecasts and pricing.
"LRO gives Waterton an accurate demand forecast by putting guest traffic information and community performance data to work," said Greg Lozinak, executive vice president and COO for Waterton Residential. "We know how many shoppers are looking for 1-, 2-, or 3-bedroom units, when they intend to move-in, and how long they plan to stay. Other revenue management (RM) systems we evaluated just do not address this, but it is essential information to have for an accurate depiction of future demand. Additionally, by focusing attention on the collection of traffic from the ILS's, Call Center and onsite, we have seen a dramatic increase in our traffic accuracy which enhances LRO's ability to provide an accurate demand forecast for each unit type at each property."
With LRO used at 28 communities since January, occupancies have improved two to three points and have stabilized across Waterton's portfolio during the current soft market."This gives us greater pricing power," Lozinak said. He cited LRO's success at Waterton's Presidential Towers in Chicago, where 2,346 units gained more than six occupancy points in three months. "We have had such success with LRO in our portfolio of communities owned by Waterton Associates that the owners of our managed properties have asked us to roll it out to them."
Rainmaker worked with Yardi to develop a standard interface with Yardi Voyager that enables the two systems to share key data elements. Yardi extracts supply and demand data such as occupancy and unit availability, lease data, and renewal data for use in LRO. "Rainmaker and Yardi have a strong relationship that delivers real value to us," said Lozinak. Another key player in Waterton's success is their call center that qualifies prospects, categorizes them by expected length of stay, and routes them to the appropriate Waterton communities.
Lozinak was a skeptic when multifamily revenue management was introduced in the 1990s; not now. "I thought it would create managers who would not know how to price because a computer was doing it," he said. Later, as revenue management gained momentum in multifamily, he changed his view. "I realized there were sharp managers using LRO to add discipline around the pricing process."
Before LRO, Waterton often took the approach that if occupancy and exposures were okay, pricing was okay. "But one day you find your occupancy and exposures are not okay, and you are forced to react to pricing based on what the market is doing rather than the supply and demand across your portfolio," Lozinak said. Today, that has changed. "We update pricing in every Waterton community on the LRO system Wednesdays; on Thursdays we have our pricing calls. Our managers do not have to accept the system's recommendation. We discuss the pricing numbers to ensure there are no questions about the data the system uses for its recommendations. It is a valuable process that works for us."
Waterton Residential, the management group of Waterton Associates, is located in Chicago with regional offices in Dallas, Atlanta and D.C. area. We manage over 15,000 apartments that are located in 15 markets and in 12 states. No matter what region or area that you are looking to relocate, you will find responsive personalized service.
Source: The Rainmaker Group