MultifamilyRevenue.com

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Lefkovits is a principal at Joshua Tree Consulting, anEmeryville, CA firm that provides advice and analysis tomultifamily housing operators. He's also a former vice president ofthe National Multi Housing Council, where he created its technologyforum conferences, and former senior vice president for BREProperties, a San Francisco-based REIT.

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Lefkovits says he created MultifamilyRevenue.com to fill a need."We're in a recession. Owners need to know that revenue managementsystems drive incremental revenue and also take the emotionalbiases out of pricing rents."

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"But until now," he continues, "it's been hard to find credible,objective evidence that's more persuasive than our industry's rumormill." The site features case studies, video presentations andthird-party commentary on multifamily revenue managementimplementations.

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The site also documents the revenue increases from 2.5% to 4.5%by revenue management software users and lists 30 apartmentcompanies that use revenue management systems, including three ofthe top ten largest multifamily owner and management companies.GlobeSt.com asked Lefkovits to explain his objectives andthe ways he expects them to benefit multifamily housingoperators.

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GlobeSt.com: Why did you createMulifamilyRevenue.com?

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Lefkovits: We launched it to help our clientsand friends in tough times. Revenue management is a technology thatboth improves operating workflow, and clearly delivers extra moneyin the cash drawer. It pays for itself 10 times over. Companiesthat have adopted it would be hard-pressed to find a reason to goback to doing things the old way. Our hope is to broaden thosebenefits across the industry and help speed the adoption oftechnology. And unlike consulting, we can make this offering freeto our users.

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The other reason we created the site is that most firms don'thave any internal champions for revenue management because it's notcurrently part of anyone's job description. Asset managers,marketing executives and operations managers can all take the leadon enhancing their careers by learning about and testing revenuemanagement and yield optimization techniques. The availability ofinformation makes it easy.

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GlobeSt.com: Can you define revenue management andexplain the ways it specifically affects apartment owners andmanagers?

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Lefkovits: Revenue management is the scienceand art of delivering the right product at the right price to theright person in a way that maximizes revenue under a given set ofconstraints. For apartment owners and managers, revenue managementmeans systematically evaluating demand, unit type availability, netrental price, lease term, days vacant, seasonal trends and otherfactors to generate pricing options that maximize revenue, giventhe things that you can't change--like the number of units in aproperty or the local job market.

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Revenue management provides an entire organization withtransparent rents and a universal method for replicating thestrengths of the best pricing talent in the company. Pilot testsshow that revenue management systems outperform human-poweredpricing about 70% of the time.

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GlobeSt.com: Why should multifamily housing operatorsuse revenue management software?

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Lefkovits: The bottom line is simple: money.Revenue management software users increase their revenue and NOI asa result. There's more money in it than operating without it. Putmore delicately, revenue management software maximizes yield for anentire property, it doesn't just set price per unit. Astatistically driven system can automate the calculations ofsupply, demand and total rent over the rental period for maximumyield. In other words, a revenue management system can help userstrade occupancy for yield--to the point of highest NOI.

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GlobeSt.com: You say, until now, that there's been alack of information in the multifamily industry about how revenuemanagement software is used, how it benefits operators and thescope of its adoption. Can you explain how your site addresses thatissue?

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Lefkovits: We put everything in one place thata typical executive needs to know in order to justify the timerequired to contact The Rainmaker Group or MPF|Yieldstar to set upa pilot. Our new site provides case studies and video interviewswith industry professionals to de-mystify how revenue managementsystems are successfully working in the industry. It also lists thenames of companies using revenue management systems and provideslease/rent lift results based on actual pilot studies from a widevariety of multifamily markets. A few minutes spent on the site cansave a year of dithering and asking friends who don't know theanswer either.

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GlobeSt.com: Anything else?

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Lefkovits: Ten years ago, a loud argumenterupted at the NMHC Tech Conference with one respected executivewanting to know an "ROI number before he gave his onsite peopleemail." As an industry, we're not so good at embracing technologywith open hearts. The fact is, revenue management makes money. As aconsultant and educator, I hope leaders looking to get ahead willstop "beating their people until morale improves", and look atrevenue management as a better way of creating incrementalyield.

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