Realeum To Save Avalon Bay, United
Dominion and Post Millions

Management Tools Making Sense... A group of mega-apartment owners are quietly building a powerful web-based transaction management system designed to optimize the operations and leasing of multi-family properties.   I had the opportunity to visit Realeum, headquartered in Alexandria, VA, not long ago and was pleasantly surprised to learn about another promising real estate ASP model.  Three of the industry's largest owner/operators, Avalon Bay, United Dominion Realty and Post Properties, have joined hands to build a web-based platform for remedying the fragmentation and high-operating costs for multi-family real estate.

Realeum evolved out of Avalon Bay's in-house technology endeavor formerly called "Project Javalon."  Realeum aims to reduce the churn costs and releasing cycle time that has always been a big factor in profitability due to the apartment industry's average turnover rate of 45%.  Realeum also addresses points of inefficiency associated with screening resident applicants, rent collection, lease administration and the management of tenant amenities.  George Fandos, Realeum's Chief Customer Officer, offered this tangible cost savings nugget:  "One of Realeum's members figured out that on average their portfolio typically had 18 days of downtime between tenants.  Each day they could cut in reducing this roll-over time (for screening prospects, marketing, retrofit) they could save $1,000,000 per year."   Due to the large number of units under their control, big savings could be obtained by streamlining the transaction and management process with a unified web-based portfolio system.  Capturing accurate rental increases upon term renewals with existing tenants was also cited as another area of "low hanging fruit."

Contrary to other high-flying dot-com strategies, Realeum has been focusing on getting the system fully operational across the 150,000 units controlled by the three founding companies prior to launching a widespread marketing campaign.  If you're involved in the residential side of the business, keep Realeum on the radar screen.

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