In January 2002, Apartments.com announced a record 2001 in a climate when other dot-coms were shedding dead weight. The site expanded its customer base by 32 percent and increased leads to advertisers by 27 percent, and plans to put up bigger numbers in 2002.

That's a tall boast considering the flat performance expected of the economy in 2002. And, multifamily housing is going through a challenging leasing environment. The economy, new construction, and renters buying homes with low interest rates are causing a glut of apartments in many areas throughout the country.

But, it ain't bragging if you can do it, and so far, the company says it is on track.

Tim Fagan, vice president and general manager says simply, "We outperform the competition."

A subsidiary of Classified Ventures LLC, an online conglomerate of seven of the largest newspaper organizations in the country, Apartments.com supplies value to renters by aggregating a large number of apartment management's rental units to peruse through its affiliations with over 150 newspaper organizations throughout the country.

"We have 9,000 customers (single property or multifamily managers)," explains Fagan. "The average is 200 units per property for the plus properties, and they bring us between 50 and 500 individual properties."

Returning the favor, large numbers of renters visit the units online. According to Fagan, one-third of households are rented, over 33 million. "The name of the game is leads which lead to leases," says Fagan. "In 2001, we sent 35 leads per property per month."

Why do apartment leads do so well online? "The Internet has applied science to media," suggests Fagan. "If you think about traditional media, it is tough to gage the impact of advertising beyond the Nielson numbers and metrics. The Internet can demonstrate scientifically what people's actions are. We cannot convert those people into leases, but we can send our customers a healthy number of qualified leads so that they can convert them."

"Our site is highly visual," continues Fagan. "We have digital photos with a myriad of community and property information, and contact information so by the time the consumer contacts the leasing agent, they know what the rent is and they are ready to transact. That group of leads is going to be big and qualified - we have the recipe for lease conversion, but ultimately it is the leasing agent's responsibility. The cutting edge firms are embracing the Internet and putting the resources against it to maximize the opportunity."

"If we can put the most qualified audience in front of our customers, we have done our job."

Immediate need is also a factor. Unlike single family housing, where home buyers take months to act before buying a home, apartment renters tend to act quickly. "About 58 percent of people searching Apartments.com are looking for jobs in the next 30 days," says Fagan.

So is aggressive sales. Says Fagan, "We ask customers to take a hard look at their media portfolio, and spend their money in print or allocate more money to online media. Are you spending enough online? What is your cost per lease given what you spend online? Do you have a higher lease conversion? If the answer is yes, then the customer understands the value of the media. It comes down to lease conversion."

"Until they understand that, you can't sell the merits of your company over the competition."

Fagan also anticipates that some markets will be more active than others, and that Apartments.com will benefit from the recent market downturn in some areas. "The industry has rationalized that the impact of this recession is less than other recessions, but there are markets like Phoenix, San Francisco and Austin that are overbuilt, so it varies market by market," he says. "There are three million rental units coming on the market spread across the nation in 2002. Nationally speaking, the industry is facing some challenges in terms of occupancy rates and rent levels getting back to standards the owners want them to be."

Published: March 18, 2002

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