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Follow on Google News | Abacus Capital Group Standardizes Pricing With YieldStar™ Price OptimizerMultiple fee managers now have a single, consistent and methodical approach to pricing
By: RealPage Abacus outsources property management to several leading firms, based on their local market knowledge and capabilities. While this strategy has produced good results, Abacus encountered challenges due to variations of approach. “When you have different fee managers, you get different methods for pricing rents, as well as disparities in reporting” said Kyle Ellis, a managing partner at Abacus. “What you want is a single, consistent and methodical approach to pricing and an accurate and timely reporting solution that’s used by all managers.” Having decided to pursue a standard pricing strategy, Abacus originally tested another revenue management system, but found its basis for pricing recommendations deficient: too dependent on inconsistent traffic and competitor data, which was collected on site. “The property can’t accurately keep up with traffic on a regular basis. Relying too much on competitive data can be harmful too,” said Ellis. “There’s a tendency to just follow what the local market is doing, including its mistakes. And some managers can be tempted to play with the numbers to influence their pricing.” “We found that YieldStar’s Price Optimizer weighs a much more robust set of data,” said Ellis. “It uses MPF™ market data to track the submarket’s conditions more accurately, and it places greater emphasis on the property’s internal fundamentals, like leasing velocity, current and future availability, and the rents we’re actually achieving on new leases and renewals.” According to Ellis, what Abacus likes most about Price Optimizer is its statistical framework for pricing. “Price Optimizer does the sort of calculations you would do if you had unlimited time,” he remarked. “It looks at the same criteria a good manager would look at to come up with pricing, but does intense analysis on a daily basis that no manager has the time to do.” After weighing the results of its initial rollout, Abacus decided to standardize on Price Optimizer. And results have been impressive. “Every property on Price Optimizer is collecting more per square foot now and at higher occupancies than at the same time last year, despite the recession. Our average revenue per square foot is up 4.6 percent,” remarked Ellis. “We are also experiencing a higher level of sustained occupancy and longer lease terms. We have fewer turns, lower carry costs and a reduced need to spend money on marketing.” “Our clients have experienced extraordinary results during this recession,” said Janine Steiner Jovanovic, president of YieldStar. “Properties using Price Optimizer are outperforming their markets on both rent and occupancy, and achieving revenue premiums at an average of 5%. We’re excited that some markets are stabilizing. Price Optimizer is highly sensitive to market conditions and will deliver rent growth for its properties the moment opportunity exists.” For more information about YieldStar, please visit http://www.realpage.com/ To schedule an interview with a RealPage executive, please contact Michael Cunningham at Michael.cunningham@ # # # RealPage provides Software-as- End
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