How KPIs help property managers strategize daily and cope with major disrupters.
You visit a doctor to check your vitals and compare them with what’s normal for your age, lifestyle and hereditary factors. If an illness or accident occurs, you make adjustments.
The holdings in your multifamily housing portfolio are similar. Yardi’s property management software lets owners and managers check how well revenue, leases, occupancy, delinquencies and collections fare over time, against future predictions and against competitors.
If a major disruption occurs, whether a natural disaster or pandemic, you look to see if numbers fluctuate and what changes you might make in response.
Industry leaders, Shawn Cardner, Executive Vice President, Grubb Properties in Charlotte, N.C. and Joseph Anfuso, CFO of MG Properties Group in San Diego, recently shared how Yardi Asset IQ helps their companies operate under everyday and extraordinary circumstances. Following are their condensed, edited responses from NAA’s APTVirtual session, “Big Data, Benchmarking and Forecasting: A Tale of Two Studies,” with moderator Paul Yount, Yardi industry principal.
What advice would you give to someone considering a big data initiative?
SC: It’s important for senior executives and boots-on-the-ground folks to see early wins. That keeps momentum up, which helps those involved stay excited.
JA: For us, it’s about the planning and to start with the end in mind. Decide what you want to accomplish. Don’t be penny wise, pound foolish. That might mean hiring a data analyst as a dedicated expert rather than palming it off onto someone who has a full-time job.
With so much data, how do you separate all the signals from the noise to find what’s meaningful?
SC: We listen to our internal folks. Are they doing something the old-fashioned way or how can we develop new initiatives around the KPIs they’re using? We want those who use the data to tell us how they can benefit from it.
JA: We try not to spend too much time with too much data to get away from analysis paralysis. We want everyone reading off the same information—whatever level they’re at—to get the biggest bang for our buck.
Us versus us or us versus them?
SC: It’s easy to get caught up in internal data and think you have a problem, but when you step out and look at the comps and dig into the weeds, you may be underperforming in your portfolio according to the information but maybe you’re outperforming peers in a given market.
JA: Are you executing on that property and will it be different when you compare data to your portfolio and the market? What you’ve done should create value on a comparison basis. Sometimes, we find our expectation may be out of whack with what’s happening in the marketplace.
How do you leverage predictive and prescriptive analysis?
SC: Using algorithms and data points, we’ve been able to pick out patterns and trends and make predictions. If I’m at 92% and want to get to 96%, how much money do I actually have to spend in marketing? Seeing the data helps reinforce an argument—maybe, spend a bit more.
How have KPIs changed pre-COVID versus now?
SC: Our budget numbers are different from what we projected a year ago since nobody could have predicted COVID-19. What’s more useful is to have data on our competitors and peers. We want to know if we’re keeping up with the Joneses—concessions, rates or lease terms if this drags on.
JA: Delinquencies and collections have become of paramount importance. We compare from yesterday to last month and last year and everything in between. Using that data, we can know we might start out at a high delinquency rate at the beginning but over 30 days we know we can get it whittled down to a percentage and know what kind of cash we have to distribute to our investors.