Revenue Maximization Officer

Post Brothers is a nationally recognized leader in multifamily development, innovation, and sustainability, creating world-class mixed-use developments in top MSAs in the U.S., driven by class-A multifamily rental housing. As one of the largest vertically integrated developer-builder-owner-operators in the U.S., Post is a leader in both ground-up and adaptive reuse projects and has developed over $5bn of projects over the last 15 years and has an owned $2b pre-construction development pipeline of ~2,500 units in Philadelphia and Washington, DC.

We have a unique opportunity – the position of Revenue Maximization Officer (RMO) – which can offer a financial analyst or other intelligent person with excellent Excel skills the opportunity to cross over to the development side of the business at a high level.

The job duty is simply updating rents, and in lockstep directing updates to marketing campaign spending, across our ~5,000 best-in-class apartments in ~15 properties (with more deliveries every year). It may sound simple, but its not. Pricing strategy evolves constantly and there are a lot of factors that must be considered. Off the shelf Revenue Management software cannot come close to optimizing rents and maximizing revenue the way an intelligent person can.

With portfolio rents in excess of $200m per year, just a 3% optimization is worth $6m per year, or ~$100m of value creation. (Although we expect this position to lead to at least an 8% improvement ex inflation in revenue within two years). This is why we need an excellent person – this work is really impactful, and the amount of optimization that can be done is never ending.

We are recruiting from financial / capital markets / asset management parts of the CRE business for this unique role because we believe the skill sets required for the success of this position are more likely to be found in those with a background in these areas – i.e. the job will involve a lot of open full-screen spreadsheets at the same time. While the job title Revenue Manager exists in the property management / marketing departments of many large property management firms, this role will require constant intensive analysis, as opposed to pressing ‘Approve’ within Yieldstar, which is the main task of traditional Revenue Manager positions.

The position will not use Yieldstar or other common revenue management software. We have experienced off the shelf revenue management software yielding subpar results as the algorithms do not account for our diversity of unit types within projects and therefore finite demographic group demand patterns, or the unique quality of our product, or appropriate concession strategies for different markets, or the way apartment marketing lead generation works today; and we have found that Yieldstar’s off putting-to-the-customer extreme and rapid swings in advertised price yield lower conversion rates than more thoughtful pricing strategies in the markets in which we operate.

To further our mission to create best-in-class marketing & leasing performance, Post is hiring a Revenue Maximization Officer to maximize rents and return on marketing investment. This position reports directly to the VP of Marketing.

The position will report to the VP of Marketing and interact regularly with the COO and CEO.

Critical skill sets for this role include:

• Highly analytical mind
• Expert at identifying trends
• Extremely excel astute; unafraid of larger sets of data
• High level of comfort communicating across departments and at executive level
• Detailed and thoughtful approach (at all times)

Critical performance traits for this role include:

• Ambitious, driven to succeed and passionate about their craft
• Entrepreneurial self-starter; ability to thoughtfully self-direct
• Strong ability to listen, metabolize feedback
• Make good judgements
• Unafraid to have a perspective

Essential Duties and Responsibilities

Pricing and Renewal

• The position will update rents and spending at every property every two weeks at a minimum based on the data points listed below.
• The position will have a support person in data collection and basic analysis.
• Spotlight performance trends by unit type; maximize revenue opportunities.
• The position will also manage renewal rent recommendations, based on similar but different considerations to new lease rental rates.
• The position responsibilities will also include optimizing ancillary revenue – including parking and storage rents, etc.
• Monitor and flag turnover / renewal trends (good and bad) in real-time.
• Maintain Master Pricing historical rent data.

Data to take into account

• Current Availability by unit subtype – vacancy and notice
• Current Leased, Occupancy, and Trend percents
• Upcoming expirations
• Current retention rates
• Current traffic and lead-to-lease conversion
• Historical rents, by time of year
• Historical seasonal traffic trends, by demographic group / unit type target renter
• Budgeted Gross Market Rent (GMR) growth
• Competition today
• Competitive outlook
• Trends in Reasons for notices – price, life circumstance, service
• Relevant macroeconomic trends

Strategy to take into account

• Property development phase strategy – lease-up, positioning for capital event, or maximum cash flow.
  1. E.G. on a lease up, we are sensitive to proforma rents, and are fine giving away concessions as underwritten and inline with the other market offerings. We want to demonstrate big rents and good leasing pace. Often need to balance between maximizing rents, which means a ~two-year lease-up, and getting out of development financing.
• Appropriate use of concessions vs rent adjustments. Concessions are a tool when you need to move leased percent significantly in a short time.
  1. E.G. for stable properties with fixed rate loans we just want to eat the most dollars of cashflow, and concessions should be used very sparingly and only if there is a glut of notices for a particular sub type of units, or some other external factor like major new supply or property management disaster.
• Context of pricing recommendation with other unit types.
• Not pushing too aggressively.
  1. Pushing rents too aggressively can quickly kill off the prospect pipeline, and having to dial rents back has a negative perceptional impact on prospects such that they are thereafter very unlikely to lease. (one of the shortcomings of popular revenue management software).
• The performance status of all prerequisite leasing cylinders – marketing, agents, showability, backdoor (renewals), etc.

Decision Marking

• The algorithm is your brain. Many pricing decisions are complex and outcomes unknowable without testing. Pricing decisions often require artful thought and collaboration.
• For example, what to do when traffic is low:
  1. If it has high traffic but low conversion, its probably overpriced. If it has high traffic and high conversion it is probably underpriced.
  2. But if a unit has good conversion ratios but low traffic, do we lower rent or not? Spend up on marketing or not. Concess? Must consider unit type, time of year, quantity of availability vs percent availability, etc.
  3. Low traffic unit pricing decisions always need to be made in context with marketing.
• For example, relative pricing when there is a mini glut:
  1. 1BR type D –there are 12 of this unit type, 1 vacant unrented, none on notice. $3,000 rent.
  2. 1BR type E – slightly larger, got a flurry of move outs, 48 of this type, 6 vacant unrented + 6 on notice, ie 75% trend. $3,200 face rent.
  3. Simple answer is put a concession on it until leased % gets closer to 90. But if we concess that unit, we can be very sure the type D will sit without renting. What to do on both? Concess D? but its 92% trend?
• For some unit types, achievable rents can vary very widely. IE several penthouses that can be full at over $30k each at times, and many sitting empty at $20k at times. Requires collaborative qualitative discussion with executives and leasing before one can make an informed recommendation. E.G when is the draft? When is NBA free agency? What’s the new shadow inventory? Are there macro trends with this clientele?

Marketing Campaign Spending

• As the analog to and in context with rental rate decisions, this position will also direct updates to spending on demographic and unit type focused marketing campaigns.
• Over the last decade, the majority sources of leasing traffic have shifted from ILS sites, where its very easy to target relevant determined renters, to online marketing – mostly the Google ad network, where it's more difficult to target relevant determined renters. This presents both a challenge and opportunity to outperform.
• We maintain multiple online marketing campaigns which target different likely demographic groups for unit type users, working within the constraints of Fair Housing policies (ie we can’t just target by age, income and location). This position will direct spending by campaign in lockstep with rental pricing decisions, I.E when availability of a certain type increases, spend more, when there is no availability, spend less or stop.
• The position will need to work within Google marketing tools, and while preexisting knowledge of Google marketing tools is not required, the candidate therefore must be comfortable with technical software.
• The position will also recommend campaign strategy updates that maximize marketing ROI, and work with the marketing team to ensure we have as optimal campaigns by unit type as possible.

Additional Responsibilities and Information

• The role will also conduct A/B testing on pricing strategies such as:
  1. A 1-month concession is worth ~8% on face rent. We have found a 1-month concession is more likely to make people rent than an 8% face rent drop, but that unit is more likely to turnover, and we are able to get less increase on renewal on average. But different customer groups and seasons can yield different results, and having a deeper dataset of A/B pricing testing will enable better decision making to maximize cash flow.
  2. Our pricing formulas for hold period premiums and lease term premiums are based on development phase strategy and industry best practices. More A/B testing on hold premiums, expiration season premiums, and term premiums will enable better decision making to maximize cash flow.

Other Requirements

• Bachelor’s degree with 7+ years of data intensive work

Post Brothers provides equal employment opportunities (EEO) to all employees and applicants for employment without regard to race, color, religion, sex, national origin, age, disability or genetics. In addition to federal law requirements, Post Brothers complies with applicable state and local laws governing nondiscrimination in employment in every location in which the company has facilities. This policy applies to all terms and conditions of employment, including recruiting, hiring, placement, promotion, termination, layoff, recall, transfer, leaves of absence, compensation and training.