CRE Industry Baffled By DOJ's Collusion Allegations Against Landlords In RealPage Suit
Cash may be king in commercial real estate, but knowledge is power — and prosecutors at the U.S. Department of Justice believe that power has become too concentrated among multifamily landlords.
Federal attorneys added six landlords or property managers to its antitrust case against RealPage earlier this month. In the amended complaint, the government outlines how competitors were engaging in anticompetitive practices by meeting to trade information about rates, vacancy and other data.
When read on its face, the government’s case declares the decades-old industry practice of sharing comps to be illegal. The DOJ’s position led questions to swirl in CRE circles as baffled brokers, investors and developers scratched their heads and wondered how to keep doing their job without running afoul of the law.
“If you were to make a big purchase or make a big financial decision, wouldn't you call around and ask a bunch of questions?” said Eli Weiss, principal at Joy Construction, a small-scale affordable housing developer. “Of course, if you frame it as some sort of rigging and collusion, it looks that way.”

The amended complaint updates charges that were first filed in August against RealPage that alleged that the property management software company’s technology violated antitrust laws by enabling competing landlords to work together on pricing rental units.
The initial complaint focused on RealPage’s algorithmically controlled tool that helps owners set rents, while the amended complaint is a major escalation ensnaring some of the country’s largest multifamily landlords. The DOJ is also targeting common industry practices, alleging that landlords engaged in collusion by sharing property data in meetings and on calls.
A DOJ spokesperson declined to comment about the agency’s position, but the court filings indicate that it would be a violation of antitrust laws to exchange occupancy and pricing data between landlords, a widespread practice that is key to the operation of most real estate firms.
Developers who spoke to Bisnow were both puzzled and concerned by DOJ’s decision to add property managers and landlords as defendants in its suit.
“As a developer, I spend my weekends going to potential competitors and shopping their properties so I can have the freshest and most accurate data to present to my capital partners,” said Rod Mullice, managing partner of Atlanta-based developer Windsor Stevens Holdings. “If the DOJ wants to stop me from shopping my competitors, it will have a negative impact on housing production.”
Even those who don’t use RealPage are on edge due to the DOJ’s focus on specific companies and common practices.
Jeff Klotz, CEO of the Klotz Group of Cos., which invests primarily in Southeast multifamily assets, has never used RealPage’s software for the firm’s properties. But he nonetheless set up a call with his legal team after the amended suit was announced to assess what it could mean for his firm.
“When the Justice Department started to name owners and operators and management companies then, all of a sudden, it started to get real for us,” he said.
The amended complaint added Greystar Real Estate Partners, Blackstone’s LivCor asset management firm, Camden Property Trust, Cushman & Wakefield, Willow Bridge Property Co. and Cortland Management as defendants.
It outlines interactions between executives at the companies, which together control 1.3 million apartments in 43 states, dating back to 2018 that are in some cases only tangentially related to the rent-setting algorithm that formed the basis of the original suit.
DOJ attorneys allege the landlords strategized together about navigating pandemic-era market challenges. Senior managers at competing firms directly communicated about rents and other proprietary data and joined RealPage user groups to discuss pricing strategies, the suit alleges.

But brokers, landlords and developers argue that there was nothing untoward in the meetings. Commercial real estate firms have spent decades monitoring their competition to help inform their own pricing, property managers still call each other to trade data, and online apartment listings make a lot of pricing data publicly available.
“What RealPage did was just automate an effort that had been used for 100 years in the industry,” Klotz said.
Matt Sharp, co-founder of multifamily landlord Hamilton Point Investments, used to use RealPage at his firm’s properties before switching to a competitor at roughly half the cost last year.
He disputed the DOJ’s characterizations of RealPage’s operations, calling them distorted and disingenuous. His firm used the rent-setting tool previously known as YieldStar but now dubbed AI Revenue Management, but he said he didn’t like the volatility in suggested rates that the system recommended and instead opted to use internal pricing metrics.
Sharp also scoffed at the idea that senior managers at some of the country’s largest landlords would be so intimately involved in the day-to-day operations of each building in their portfolio.
“The lawsuit makes it sound like these guys are smoking cigars and drinking scotch,” Sharp said. "They've never even been to most of their properties, they have no idea what rents are being charged. They're just trying to run their business.”
RealPage’s software adds a layer of formalization to industry practices that are widespread but had previously been attacked with different strategies and tactics. RealPage argues its software is simply a tool, and landlords are allowed to override the program’s rent recommendations, a step they frequently take.
“Properties calling properties and asking what they’re charging for rent, that’s happened since the dawn of time,” said David Lynd, whose eponymous investment firm has 30,000 apartments in 17 states. “Now that it's been reduced to an algorithm, it’s taken the human out of it and made it very scientific.”
Lynd uses RealPage’s property management tools but, like Sharp, opts to use its own internal tool and metrics to set rents. Multiple landlords who spoke to Bisnow complained that the software is too aggressive in its price shifts and frequently recommends downward adjustments, a point highlighted by RealPage as evidence that the software isn’t harming tenants.
“In Houston, where we own maybe a dozen properties, it's been adjusting downward almost every day. That's not a very nefarious trust violation, conspiring to decrease our revenue,” Sharp said.

Several real estate investors have approached appraiser Phil Crawford with data provided by algorithms. He said that most are value-add investors, and in the majority of cases, the data does not align with the current market nor what he expects it to be a year later when the asset is improved.
The occurrence was most common two years ago when interest rates were low and rents surged at an astronomical pace, he noticed.
“If the algorithm juiced the rent estimates at that time, then immediately that investor is at a disadvantage by whatever percentage the algorithm was over,” Crawford said. “When you deal with operating expense inflation on top of an overstating of rents, that's a recipe for foreclosure.”
The Biden administration waded further into the debate last month when the White House Council of Economic Advisers released a report where they found that rent-setting algorithms added a combined $3.8B in rent costs to tenants nationwide in 2023.
The report was highly critical of RealPage’s software, which the CEA said has helped contribute to a roughly 4% increase in rents for algorithmically priced units, a finding that RealPage disputes.
There’s bipartisan agreement across all levels of government that the U.S. is facing a housing affordability crisis, but there's little common ground on the causes or solutions.
RealPage and its allies argue that high materials prices, limited inventory, high insurance and operating costs, and explosive demand during the coronavirus pandemic are responsible for the country’s growing housing costs, not an algorithm.
“It’s past time to stop scapegoating RealPage for housing affordability problems when, as the report admits, the ‘root cause of high housing costs is the under-supply of housing,’” RealPage Senior Vice President Jennifer Bowcock said in an email after the CEA study was released.
The software company has been aggressively defending itself against the government’s claims, including by filing a motion last month seeking dismissal. Expanding the suit to include landlords could be a tactic to ensure a win, not just in court but politically, multiple real estate professionals told Bisnow.
“If I were to be cynical, I would say that those are the ones that can very easily roll over, settle and write them a check for $5B, and that's a good headline,” Sharp said.
Cortland reached a deal with the DOJ to cooperate with the investigation in exchange for having all of its claims resolved.
Greystar and Cushman & Wakefield have denied the allegations, but other defendants have remained silent or declined to comment.
It’s unclear what happens in less than two weeks when real estate magnate and President-elect Donald Trump once again ascends to the highest office in the land. Pam Bondi, the former Florida attorney general nominated by Trump to succeed Merrick Garland in the top U.S. law enforcement position, hasn’t publicly signaled her position on the case.
But, Trump is viewed as generally being friendly to business and real estate interests.
“Part of the reason I'm not concerned about having this conversation right now is because I'd be shocked if this doesn't go away,” Sharp said.
Jarred Schenke and Sasha Jones contributed reporting.
CORRECTION, JAN. 13, 2025, 2:45 P.M. ET: Lynd uses RealPage's property management tools, not its AI Revenue Management software.