When it comes to understanding your apartment community’s performance, it certainly doesn’t hurt to look at as much market data as possible.
Monthly and quarterly market reports compiled by research and brokerage firms about your metro area are worth reviewing, but they also have limitations. By the time they arrive on your desk or in your inbox, the data is at least 30 days old. Sometimes the data contradict each other and its projections.
Also, these surveys are usually conducted at the market level and then a regression analysis is performed to determine submarket data. This means the survey reports don’t offer true insight into your surrounding submarket, let alone your property’s comps.
In the end, the information you really want to dig into and spend the most time with comes from your comps. It doesn’t matter if Manhattan rents were rising a month ago if your community is in Chelsea and rents there are flat today.
Getting Vital Data the Right Way:
The problem facing a lot of operators is they don’t have an efficient process for obtaining the kind of data that will benefit them the most.
Too many property managers rely on the traditional market survey approach. Busy onsite associates spend hours calling comps to collect data about asking rents, occupancy rate, concessions, etc. When, and if they’re finally able to collect this information, they enter it into Excel spreadsheets. And we all know this presents a whole host of problems and hampers meaningful data analysis.
The Value of Submarket and Competitive Data
Put simply, real-time submarket data eats monthly market data for breakfast. It optimizes leasing and revenue performance when used in conjunction with revenue management. If your community is located in the booming LoHi area of Denver, you can’t evaluate your property’s pricing based on month-old information about the average rent in metro Denver.
Only when operators are up to date about what exactly is happening among their competitive set and in the surrounding submarket can they make the proactive pricing decisions that best position their communities to maintain occupancy rates and drive revenues.
To be sure, I’m not discouraging operators from taking note of monthly and quarterly metro reports produced by third-party organizations. It is important to be cognizant of the broader market and to take in the insight and analysis regarding trends in your metro area.
But when all is said and done, the most valuable data is the real-time information that you gather from your competitors in your immediate area. It is worth remembering the story of the statistician who drowned crossing a river that was, on average, 3 feet deep.