Laziness in the Age of the LRO

Laziness in the Age of the LRO

By: Nicholas A. Dunlap

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Recently, I spoke at the Multifamily Brainstorming conference on what came to be quite the controversial topic.  That is, I voiced my concern that our industry is being overrun by lazy people who do not understand some of the most simple marketing and leasing processes and as a result, are hurting NOI for property owners across the country.

You see, the LRO or lease rent optimizer as it Is known, is a program where properties share details with a central database and in turn, compete against each other based on the subject property’s statistics and supposedly ensure that a property owner will be receiving peak rents.  Not always the case, but that’s how its supposed to work.  In turn, leasing agents no longer know the market or shop their competition.  Nope.  Now, they sit back, relax and rely on the computer screen.

Now, I am all for computers and or robots helping to make our lives easier.  And if they can help to make a business more profitable, well then that’s great too.  But now, traditional multifamily operators are struggling to find talent.  That is, no one knows how to do it the good old-fashioned way.

Ahh, the old fashioned way.  You know, knowing your sub-market and market like the back of your hand.  Getting out and actually walking your rent comps on a quarterly basis.  Calling your competitors on monthly if not weekly basis both as a prospect and as yourself to uncover the actual data.  Putting it all together and developing a personalized sales pitch with the high market rent and most reasonable concession package to boost profitability and increase occupancy.  Those were the days.  And in some cases, they still are.

Now, I should also point out that this LRO program comes from the airline industry.  Talk about a failing model.  So many major airlines have gone bankrupt and closed shop.  The overall quality of fight experiences on most airlines has deteriorated to a point somewhere above taking the bus or riding a train.  And yet, this is what our industry is embracing? This is what multifamily owners are readily banking on?

So when it comes time to choose between the real and the robot, just remember the 1970’s song, “Ain’t nothing like the real thing, baby.  Ain’t nothing like the real thing.”

Leave the LRO for the lazy people, be hands-on and drive value yourself!

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