Yield Optimization Strategies April 24, 2008

CIO – AMLI Residential ( www.amli.com ) RentWizard – Sold to RealPage in 2003 RentCheque – 2 nd generation implementation CEO – Yield Dynamics, Inc. YieldWizard – “ A NEW GENERATION OF SOFTWARE FOR EQUIPMENT RENTAL YIELD MAXIMIZATION” CEO – Yield Technologies, Inc. ( www.yieldco.com ) RevenueRaptor – Revenue optimization framework Steve Small PRESENTER BACKGROUND

CIO – AMLI Residential ( www.amli.com )

RentWizard – Sold to RealPage in 2003

RentCheque – 2 nd generation implementation

CEO – Yield Dynamics, Inc.

YieldWizard – “ A NEW GENERATION OF SOFTWARE FOR EQUIPMENT RENTAL YIELD MAXIMIZATION”

CEO – Yield Technologies, Inc. ( www.yieldco.com )

RevenueRaptor – Revenue optimization framework

Agenda The Business Opportunity Statistical Concepts Yield Optimization at AMLI

The Business Opportunity

Statistical Concepts

Yield Optimization at AMLI

Revenue Management is Real Money AMLI’s property data is computed using the NCREIF formulas, summarized by market and compared against the lowest meaningful index Simple compounded rate of the most recent four quarters is used for comparison Data in the chart to the right is for 2Q06 through 1Q07 AMLI vs. NCREIF – Annual NOI Growth 0.30% 4.80% 5.10% Florida 0.79% 5.21% 6.01% Total Portfolio 1.04% 5.02% 6.06% Seattle 1.05% 5.35% 6.40% New Jersey 0.71% 4.47% 5.17% Southern California 0.38% 6.17% 6.55% Kansas 0.78% 5.03% 5.80% Denver 0.64% 5.20% 5.84% Chicago 0.77% 5.45% 6.21% Atlanta 0.73% 5.51% 6.24% Dallas 0.54% 5.48% 6.02% Austin 0.68% 5.72% 6.40% Houston Rolling 1 Year NOI Return Variance NCREIF Index AMLI Properties Region

Revenue Management is Real Money Wachovia REIT Performance

Global Perspective Revenue Management is more than a pricing system. It’s about finding incremental opportunities. People and process first; Technology second. Key aspects: Install business transparency. Feedback business results and metrics in real-time . Make it easy to for customers to do business with you. Invest in your Internet presence. Take a disciplined statistical approach to capital investment and pricing. KEY ASPECTS

Revenue Management is more than a pricing system.

It’s about finding incremental opportunities.

People and process first; Technology second.

Key aspects:

Install business transparency.

Feedback business results and metrics in real-time .

Make it easy to for customers to do business with you.

Invest in your Internet presence.

Take a disciplined statistical approach to capital investment and pricing.

Transforming the Enterprise Is it Actionable? Is it understandable to the organization? Can everyone participate? Yield Optimization is about actionable ways to improve marketing, product mix, customers, and business processes. YIELD OPTIMIZATION

Is it Actionable?

Is it understandable to the organization?

Can everyone participate?

Yield Optimization is about actionable ways to improve marketing, product mix, customers, and business processes.

Agenda The Business Opportunity Statistical Concepts Yield Optimization at AMLI

The Business Opportunity

Statistical Concepts

Yield Optimization at AMLI

Improved revenue on operations Find the optimal price at which you can maintain target utilization… It is instructive to understand elasticity of the conversion ratio for demand. Elasticity measures the responsiveness of quantity demanded to a change in price, with all other factors held constant. ELASTICITY

Find the optimal price at which you can maintain target utilization…

Computing price elasticity of demand (Sensitivity)

Interpreting the value of elasticity ELASTIC or INELASTIC Response to Price Changes Responsive Unresponsive Proportional Value of Elasticity E d > 1 E d < 1 E d = 1 Demand Elasticity Elastic Inelastic Unitary elastic Magnitudes of Change %  Q D > %  P %  Q D < %  P %  Q D = %  P Type of Elasticity Elastic Inelastic Substitutes Available Many Few The main determinant of demand elasticity is the availability of substitutes

Factors affecting the price elasticity of demand Availability of substitutes : the more possible substitutes, the greater the elasticity. Degree of necessity or luxury : luxury products tend to have greater elasticity. Proportion of the purchaser's budget consumed by the item : products that consume a large portion of the purchaser's budget tend to have greater elasticity. Time period considered : elasticity tends to be greater over the long run because consumers have more time to adjust their behavior. Permanent or temporary price change : a one-day sale will elicit a different response than a permanent price decrease.

Availability of substitutes : the more possible substitutes, the greater the elasticity.

Degree of necessity or luxury : luxury products tend to have greater elasticity.

Proportion of the purchaser's budget consumed by the item : products that consume a large portion of the purchaser's budget tend to have greater elasticity.

Time period considered : elasticity tends to be greater over the long run because consumers have more time to adjust their behavior.

Permanent or temporary price change : a one-day sale will elicit a different response than a permanent price decrease.

Predicting changes in total revenue Along the elastic range of the demand curve, an increase in price leads to a decrease in total revenue. This graph shows the relationship between elasticity along a linear demand curve and total revenue. Note the following: Along the inelastic range, an increase in price leads to an increase in total revenue. Revenue is maximized when Ed=1.

Along the elastic range of the demand curve, an increase in price leads to a decrease in total revenue.

Along the inelastic range, an increase in price leads to an increase in total revenue.

Revenue is maximized when Ed=1.

Agenda The Business Opportunity Statistical Concepts Yield Optimization at AMLI

The Business Opportunity

Statistical Concepts

Yield Optimization at AMLI

Consistent Message and Processes “ HUGO” - OUR HEGDEHOG

Tier Report PORTFOLIO AT A GLANCE

Performance Dashboards If you don’t measure it, You will no be able to effectively manage it Instills competition with peer team members Focuses attention on Key Performance Indicators that you want to affect MONITOR ORGANIZATION IN REAL TIME

If you don’t measure it, You will no be able to effectively manage it

Instills competition with peer team members

Focuses attention on Key Performance Indicators that you want to affect

Key Performance Indicators DASHBOARDS

Measures Individual Performance DASHBOARDS

KPIs Presented “Over Time” STORE DASHBOARD

Market Survey PROPERTY OVERVIEW

Leasing, Marketing & Servicing Real-Time Internet Unit Pricing & Availability On-Line Leasing AMLI Trak PhoneTrak

Real-Time Internet Unit Pricing & Availability

On-Line Leasing

AMLI Trak

PhoneTrak

The New AMLI.com BE MORE CONNECTED

Real Time on AMLI.com UNIT PRICING & AVAILABILITY

Pricing Matrix DELIVERY OF MULTIPLE LEASE TERM PRICING

AMLI is a Leader AMLI IS 3X THE RENT.COM AVERAGE (2006) REIT Performance metrics (YTD 2006) Lead to Lease Conversion – weighted average per property

AMLI Trak CRM LEAD FOLLOW-UP SYSTEM

Prospects RECORDED IN DBMS & EMAILED TO COMMUNITY

Responses COACHED & RECORDED

Follow-up Reminder IS QUEUED

Another Follow-up Reminder BY EMAIL TO COMMUNITY STAFF

Creates an e-mail Response ALSO COACHED

Also Creates a Future Reminder IF PROSPECT LEASES ELSEWHERE

AMLI PhoneTrak CAPTURES CALLER DATA AND PROVIDES UNIT AVAILABILITY

AMLI PhoneTrak CAPTURES CALLER DATA AND PROVIDES UNIT AVAILABILITY

AMLI PhoneTrak Is a Virtual Call Center AMLI Community Sales Staff Knows Product and Customers Better Measures Call Follow-up and Responsiveness Captures Better Customer Traffic and Demographics Data BENEFITS

Is a Virtual Call Center

AMLI Community Sales Staff Knows Product and Customers Better

Measures Call Follow-up and Responsiveness

Captures Better Customer Traffic and Demographics Data

AMLI PhoneTrak TOOL FOR COMMUNITY STAFFING DECISIONS

AMLI PhoneTrak TRACKS CALLS GOING TO ANSWERING SERVICE

Revenue Management Revenue Management Is giving the right customer the right product at the right time for the right price Goal is to maximize rental revenues through the proper balance of occupancy and rental rates AMLI Residential RENT CHEQUE

Revenue Management Is giving the right customer the right product at the right time for the right price

Goal is to maximize rental revenues through the proper balance of occupancy and rental rates

Comparison to Other Industries REVENUE MANAGEMENT

Replaces Traditional “Market Rent and Concessions” Approach Simplifies Pricing for the Customer and the Leasing Staff Easy to Implement, Manage & Measure “ Gross Potential Rent” is a meaningless number Revenue Management NET EFFECTIVE RENT PRICING

Replaces Traditional “Market Rent and Concessions” Approach

Simplifies Pricing for the Customer and the Leasing Staff

Easy to Implement, Manage & Measure

“ Gross Potential Rent” is a meaningless number

Revenue Mgmt Roadmap TRANSITION PLAN Automated auditing and compliance management of all fees and other income No Fee focus, (admin, app.. Etc) No Fee focus, (admin, app.. Etc) Fees & Other Income Sophisticated compliance validation and exception reporting Manual checking, time consuming Manual checking, time consuming Compliance New and Renewal New leases only New leases only Prices Generated Opt Out Opt in No forced ownership Ownership Integrated / Automatic &quot;Push&quot; &quot;Pull&quot; Information Delivery 256 and beyond 64 Information pulled from disparate reports Separate logic cases Daily, or as required (after each new transaction?) 2 or 3 times a week &quot;When we got around to it&quot; Pricing Frequency End State Transition Previously Concept

Revenue Opportunity NET EFFECTIVE VS. CONCESSION BURN-OFF

Revenue Opportunity MAXIMUM CAPTURE VS. FREQUENCY

Actual Pricing EXAMPLE OF “PUSH” REPORTING

Metrics A LITTLE OF THE MATH INVOLVED Occupancy Change Adjusted Availability Traffic Index

Outcomes 64 UNIQUE SOLUTIONS Traffic Index Adjusted Availability Occupancy Change

Anatomy of a Lease OPTIMIZING EACH LEASE FOR MAXIMUM REVENUE Seasonal lease expirations adjustment Front loaded vacancy Turn cost amortization

Pricing Matrix DELIVERY OF MULTIPLE LEASE TERM PRICING

Steve Small – AMLI Residential ( www.amli.com ) [email_address] or [email_address] 312-283-4900 AMLI Residential CONTACT INFORMATION

Steve Small – AMLI Residential ( www.amli.com )

[email_address] or [email_address]

312-283-4900