The increase in revenues on the test properties was the primary benefit but we also noted a spillover effect with the non-LRO communities as the residential services team began to adopt the LRO pricing mindset. This really proves to us how important a disciplined pricing process is to our organization. LRO provides the tool that is required for this process.
Atlanta, GA (PRWEB) September 29, 2008
The Rainmaker Group, the world leader in automated revenue management software and services to the multifamily housing and gaming hospitality industries for total property profitability, announced that Carmel Partners with over 19,000 units will implement the revolution LRO multifamily housing revenue optimization solution after a successful 12-month pilot test in eight communities.
The communities that used LRO in the pilot realized a 3.55% increase in revenue billed per unit (RBPU) over non-LRO Carmel Partners communities in the same markets with similar occupancy and exposure.
"LRO creates a centralized pricing discipline that improves revenue," said Don Campbell, Carmel's Managing Partner and Chief Operating Officer. "It is consistent with our philosophy to standardize and centralize as many processes as possible. This allows our community teams to focus on what they do best which means providing top customer service and maximizing the operating potential of our apartment communities."
Carmel Partners conducted the pilot from June 2007 to July 2008 at:
- Six communities in the Denver region with a total of 2,166 units
- Two California communities with a total of 414 units
Carmel will roll out LRO across 57 communities totaling nearly 14,500 units in late 2008.
Spillover benefits to non-LRO communities
"Maximizing revenue per unit is essential to operating success and it was the most objective measurement of LRO's benefits during the pilot program," said Campbell. "The increase in revenues on the test properties was the primary benefit but we also noted a spillover effect with the non-LRO communities as the residential services team began to adopt the LRO pricing mindset. This really proves to us how important a disciplined pricing process is to our organization. LRO provides the tool that is required for this process."
LRO's pricing methodology enables rapid development of rate optimized pricing models, taking into account such factors as:
- Renewal rents
- Renewal pace
Objective, conclusive data
While some software providers measure pilot test results against their own data, Rainmaker and Carmel Partners agreed to compare only data from Carmel Partners during the pilot test. "We decided that comparing the revenue changes at the LRO properties against the non-LRO control properties was the most objective way to measure the effectiveness of the LRO program. The data we used came from our own system. There were no third parties involved and our results were objective and conclusive," said Campbell.
According to Campbell, Carmel Partners selected LRO because it was a more fully evolved product used by many respected multifamily operators, and also because it provided a two-way interface with Carmel Partners' MRI property management and accounting systems.
The pilot verified the effectiveness of LRO and also helped Carmel Partners establish how to get the best results from the system. "LRO is not a black box that extracts information from your database and automatically comes up with pricing," said Campbell. "It is a tool that requires regional and community managers to establish a revenue-focused dialogue about their markets and goals. Throughout the pilot we established ways to improve the quality of information entering the system which enabled LRO to produce the most profitable results for us."
About Carmel Partners:
Based in San Francisco, Carmel Partners is a private real estate investment firm, specializing in multifamily investments across the United States. Carmel Partners owns and operates about 19,000 units and also maintains offices in Irvine, Denver, Seattle, Washington, D.C., and Honolulu.
About Rainmaker Group:
The Rainmaker Group is a software and services company that provides the revolution LRO profit optimization solution that enables multifamily housing operators to maximize revenue from apartment leases. revolution LRO is used by more than 60 percent of the companies deploying revenue management systems in the industry and, uniquely, LRO's lease/rent revenue optimization success has been verified by independent third party consulting firms. For more than six years revolution LRO has delivered optimized leasing rates to the largest operators in the industry including Archstone, Equity Residential, Post Properties, Laramar Group, Home Properties, Simpson Housing, Mid-America Apartment Communities, Carmel Partners and other leading multifamily housing companies.
The Rainmaker Group also provides revenue management for more than half a million units in the gaming hospitality industry. Rainmaker implements and supports the revolution product suite, which maximizes total property profitability for operators of casino hotels and other hospitality enterprises. The company enables clients to identify and maintain availability for their most profitable revenue sources through revenue management implementations. The Rainmaker Group helps casino hotels increase profitability through the accurate, instantaneous ability to determine the minimum acceptable value of each guest. This increases client profitability by securing the most profitable customers and developing more effective business processes. Hospitality clients include Boyd Gaming, Harrah's Entertainment, Omni Hotels, MGM MIRAGE, Trump Entertainment Resorts and other leading hotel companies.
The Rainmaker Group
5755 North Point Parkway
Alpharetta, GA 30022
Email: sales @ letitrain.com
1000 Sansome Street, Suite 108
San Francisco, CA 94111
Phone: (415) 273-2900
Julie Keyser-Squires, APR
180 River Springs Drive
Atlanta, Georgia 30328
Phone: (404) 256-5512
Email: Julie @ softscribeinc.com