Laramar Group Gains 3% Lease-Rent Lift
with LRO Revenue Management
LRO helps multi-family owners optimize rent pricing, raise revenue
June 25, 2008 - Rainmaker Group and Laramar Group, a fully-integrated real estate investment and management company, announced the results of a pilot program testing the revolution LROsm System, an automated rent optimization system that resulted in an increase in Laramar’s lease rental rates by three percent over standard leasing practices.
In an effort to optimize asset performance of its 20,000 multi-family units comprised of investment and fee-based management properties, Laramar tested the LRO system at several select communities for six months. Rainmaker’s pilot program measured revenue-billed-per-unit at two similar Laramar communities, one using LRO and one without, in each of six markets. After testing the system and verifying the performance, the communities using the revolution LRO System had a lease rental lift of three percent over same-market communities using Laramar’s customary rate setting procedures.
“Our success depends on how profitably we manage the properties we own, as well as those of our fee-management clients,” said Laramar CEO Dave Woodward. “To maintain our leadership position, we constantly look at advanced management technologies to increase revenue while improving our operating efficiency. Thus in the fourth quarter of 2007, we partnered with The Rainmaker Group to design a pilot program to test its revolution LROsm automated lease rent optimization system.”
The revolution LRO system analyzes hundreds of factors that influence rate setting, including historical demand and current market dynamics, and mathematically developed [change to ‘develops’] pricing recommendations. In Laramar’s Phoenix test community, LRO forecasted a soft period in lease pricing in future months, which helped Laramar successfully maintain leasing velocity. At the end of the test period, Laramar’s Phoenix LRO community was operating at nearly 96 percent occupancy in a market hard hit by the mortgage crunch that averaged only 90 percent occupancy.
“In early ’08 we were able to maintain a steady revenue stream without the concessions we had to give at our control property, “ said Justin Sato, Laramar’s assistant VP of portfolio analysis. “LRO took the volatility out of vacancy loss by keeping us in a better occupancy position.”
Laramar also hired an in-house Pricing Revenue Manager, Patty Garver, to maintain its optimized lease rent program.
“As Laramar prepares to implement the application across its nationwide portfolio, we have applied a number of new processes to ensure a smooth transition for all our properties,” said Woodward. “Having a pricing manager is a critical component. Patty helps onsite community managers play an active role in evaluating comp set rates, floor plans and other factors that go into the LRO pricing algorithm,” he said.
With the pilot test completed and its new lease rent optimization processes and system proven, Laramar plans to begin full deployment of revolution LRO among the assets it currently manages, and to share the results with clients it works with as part of the third party fee-based, ownership agreements it has with other investors.
About Rainmaker Group
The Rainmaker Group, a Microsoft Partner, also provides revenue management for more than one-half 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.
|Also See:||The Rainmaker Group Announces revolutionsm Product Suite on Microsoft Software Platform; Microsoft relationship enables flexible hosting options for Rainmaker’s profit optimization clients / June 2008|
|Wynn Las Vegas Implements Rainmaker revolution Revenue Management; Rainmaker tapped by Wynn to optimize total customer value for 5-Star, 5-Diamond resort - / June 2008|
|Follow the Money: 10 Years of Profit Optimization Progress Pays Off for Operators; Customer service, revenue management focus in two markets a winning strategy for The Rainmaker Group and its clients / April 2008|
|The Rainmaker Group Welcomes Rod Collier and John W. Wallace to its Management Team; New top-level talent adds to Rainmaker's 250 years of combined profit optimization expertise in the revenue management community / March 2008|
|Rainmaker Transitions Post Properties' LRO Lease Optimization System to SunGard Hosting; SunGard frees Post team from system responsibilities, hosts application and database / January 2008|
|Rainmaker Group Leads Revenue Management Panel at GA Tech Conference; Rainmaker hosts Harrah's, MGM MIRAGE, Archstone-Smith execs for Revenue Management thought leadership event / October 2007|
|'Increasing Revenue' is Focus of Rainmaker Group Client Steering Committee Meeting; Multi-family executives assemble to shape future revenue optimization innovations / September 2007|
|Four Major Multi-Family Housing Operators Select The Rainmaker Group for Revenue Management Pilot Launch; Revenue Management specialist, Rainmaker, tapped for lease/rent rate lift programs by REITs and independents / August 2007|
|Mid-America Apartment Communities Installs Rainmaker revolution LRO SM Revenue Management Throughout 140 Properties; revolution LRO delivers a 3% rate increase to Mid-America in pilot test / August 2007|
|The Rainmaker Group and Realty DataTrust Partner to Introduce Optimized Multi-Dimensional Online Pricing for the Apartment Industry; Revolution LRO clients now able to market optimized rental rates on the Internet through VaultWare™ online leasing solution / June 2007|
|Trump Entertainment Resorts Installs Rainmaker Group revolutionsm Revenue Management Suite in All Atlantic City Properties; Trump uses revolution RM to optimize rates, manage increased demand for three properties and 2,900 rooms / June 2007|
|The Rainmaker Group Launches New Version of Multi-Family Housing Revenue Management System, revolution LRO; Revenue Management leader taps two math Ph.D.s, leverages data for more profitable business decisions by MFH operators / May 2007|
|The Rainmaker Group's 2007 Client Steering Committee Conference Expands 'Product Roadmap'; Revenue Management leader listens to users for product development guidance / April 2007|
|Casino Hotels Boost Profits with Rainmaker Group, Agilysys Tech Collaboration; Revenue Management and Property Management Systems identify profitable gamers / March 2007|
|The Rainmaker Group Hosts 3rd Annual Client Steering Committee Meeting; User Input to Guide Development; Revenue Management leader taps users for 'Project Roadmap,' assesses client priorities / March 2007|
|The Rainmaker Group Increases Staff 30%, Relocates to Larger Offices; Revenue Management leader adds business unit, expands to service growing client demand / March 2007|
|The Rainmaker Group Launches Revenue Management Pilots with Four Major Multi-Family Housing Operators; Rainmaker revolution LROsm system demonstrates immediate lease/rent revenue lift / January 2007|
|Boyd Gaming Hits 'Jackpot' With Revenue Management Strategy; Focus on guest value gives the advantage to the house / September 2006|
|The Rainmaker Group to Share Expertise at Revenue Management and Pricing Conference; Rainmaker Executive VP, Tom Walker, will speak at EyeforTravel Revenue Management and Pricing in Travel 2006 Conference / August 2006|