Optimize rents, maximize profits
What are Apartment Analytics?
Simply put, we help apartment companies maximize profits. Using data and analytics, we empower our clients to make more informed decisions about pricing, development, and management. Competitive Analytics collaborates with owners, managers, and investors of multifamily apartment portfolios – empowering them to make more profitable decisions using our business intelligence platform, DECIPHER™ Apartments. We have been successfully delivering a healthy ROI (400% – 1200%) to our clients for over fourteen years.
Typical assignments include:
Demand & supply forecasting
Competitive rankings of submarkets
Development and acquisition feasibility analysis
Rehab ROI decision modeling
Demographic and psychometric forecasting
Competitive Analytics collaborates with forward thinking apartment owners that place a high priority on business intelligence and predictive analytics.
Our methodologies include conducting comprehensive primary and secondary market research as well as econometric modeling, distribution analysis, statistical modeling, scenario analysis, and the incorporation of several proprietary valuation models.
Using our rent optimization platform, our clients have increased profit margins by 10% to 25%. Our proprietary DECIPHER™ RVO model (i.e. Rent-Value-Optimizer) is an innovative profit maximizing tool for setting rents based on value as perceived by the renter. Our value-based approach is unlike any other method for evaluating the economics of multifamily apartment development, operations, and management. For example, software programs such as YieldStar, Rainmaker, and Yardi, as inventory pricing and property operations software, do not provide feature-specific valuation estimates nor provide external micro and macro “market driver correlation” to apartment market performance. Further, unlike DECIPHER™, they require significant upfront fees, extensive training, and high per unit costs. Additionally, our RVO model allows for countless assumptions to be adjusted by the client for an infinite number of scenarios to be evaluated.
The RVO model optimizes rent based on six vital factors:
Renter’s perception of the “value” assigned to all tangible and intangible features and amenities for a specific neighborhood, apartment community, floor plan, and unit;
Identifying target and market equilibrium occupancy levels;
Competitive and analogue price/value relationships;
Unit by unit value/premium adjustments;
Micro-economic trends; and
Determining the value a renter will assign to the unique features of an apartment unit is central to optimizing rents and maximizing profits. Competitive Analytics has been helping apartment clients increase profit margins by 10% to 25% using our proprietary premium optimization tool, which is based on the same methodology as our rent optimization platform. Our custom premium analyses provides unit-by-unit pricing based on countless drivers. Each unit within an apartment community is assigned a unique premium or discount based on the location of the unit within the complex, the characteristics of the unit, and the externalities which positively and negatively affect the unit. A dynamic heat map is also employed to visually display the premiums and discounts for all units, buildings, and floor levels.
Demand and Supply Forecasting
Competitive Analytics helps apartment companies plan, budget, and set rents by forecasting future demand and supply of apartments for relevant markets and sub-markets. We give our clients the confidence to make the best decisions by providing forecasts that are unparalleled in terms of accuracy and robustness. Our demand and supply models evaluate historical, current, and forecasted apartment demand for countless consumer segments cross tabulated by numerous product types. To ensure the reliability of our forecasts, Competitive Analytics employs over 30 unique apartment demand models to calculate “net demand” and “relative net demand.” And, since the past is the best predictor of the future, our forecasts incorporate our extensive time series database of well over 100,000 economic and market indicators. For more information on our forecasting capabilities click here.
Competitive Analytics has been successfully helping apartment companies increase profits through product segmentation using data and analytics for over fourteen years. Our track record is due to our analytically rigorous approach to determining which products and services to offer different groups of customers. Competitive Analytics analyzes apartment product trends based on nine primary “segmentation categories,” encapsulating over 800 specific product segment features. Our proprietary product segmentation models are designed with interactive data visualization dashboards in order to quickly determine which product segments are in high or low demand and/or which product segments are trending positively or negatively over historical and forecasted time periods.
Competitive Analytics helps clients make better decisions about where to invest or divest by providing sub-market rankings via custom and interactive ranking models and heat maps. Sub-market rankings are also used to make decisions about where to push rents or give concessions. We also conduct rankings of apartment companies enabling our clients to make more profitable decisions based on their performance in relation to their competitors. Further, we help clients make the best decisions about managing their portfolio by providing them with rankings of their apartment communities. Competitive rankings are typically based on market rent growth, effective or net rent growth, occupancy, and availability.
Development and Acquisition Feasibility Analysis
Competitive Analytics collaborates with apartment companies to determine the feasibility of potential apartment development projects and acquisitions. By leveraging our extremely accurate and robust demand forecasts and pricing models, we help our clients make the best decisions about whether or not to move forward with a project by determining its potential ROI. We conduct extensive revenue scenarios that are overlaid with comprehensive risk assessment modeling (i.e. project, competitive, geo-submarket, market, and political risks), allowing us to provide our clients with an interactive multi-scenario ROI forecast.
Rehab ROI Decision Modeling
Competitive Analytics assists apartment clients in making the most profitable rehabilitation decisions by conducting comprehensive rehab feasibility and ROI analyses. We evaluate the cost and rent relationship of all potential upgrade (or downgrade) scenarios using our innovative value-based rent optimization methodology. We model and analyze the effect of marginal rent increases or decreases when amenities are upgraded or downgraded, as well as conduct a break even analysis. Our mandates can either involve assessing proposed rehab upgrades or downgrades or can require us to make specific recommendations as to the key amenity components driving market rental rates within a designated competitive market area.
Demographic and Psychometric Forecasting
Competitive Analytics helps clients maximize profits by conducting consumer profiling to obtain quantifiable insight from current and prospective residents. We conduct a combination of in-depth group interviews and individual one-on-one interviews to acquire valuable feedback about apartment amenities and features. This consumer profiling can be conducted on a regular basis to accurately track perceptible changes in resident value, which provide valuable consumer intelligence in order to maximize revenue opportunities and enhance operational efficiencies. Field surveys can be the most effective and cost efficient method of receiving insightful market intelligence from current and prospective residents at the grass roots level. Comprehensive tenant surveys help keep pulse on tenant satisfaction of community management, amenities, and suggestions for improvement.
To learn more about how you can optimize rents and maximize profits, contact us to schedule an exploratory call.