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How AvalonBay Dodged The RealPage Antitrust Lawsuit

While rental software company RealPage and dozens of multifamily operators and REITs remain on the hot seat for now in a class-action antitrust suit alleging rent fixing, AvalonBay Communities appears to be in the clear.

The Arlington, Virginia-based REIT noted in a Q2 earnings call and a Securities and Exchange Commission 10-Q that it had been dismissed from more than 30 cases consolidated in a federal court.

Though it has been tight-lipped on why, court filings reveal the company was prescient in structuring its contract with The Rainmaker Group, whose Lease Rent Options software was snapped up by RealPage for $300M in 2017.


The class-action suit alleges software sold by RealPage enabled owners of rental property to collude to inflate rents. Tenants across the nation allege antitrust violations, accusing RealPage's rent-setting software of helping landlords spike apartment rents beyond competitive levels and enabling cartel-like rent inflation.

According to a 167-page consolidated complaint filed against a who’s who of multifamily players last month, AvalonBay “insisted” on ironclad contractual language with Rainmaker — and later RealPage — to sidestep worries its LRO software “could lead to information sharing and price setting that posed grave antitrust concerns.”

LRO references the revenue management software RealPage uses to provide clients with lease and rent pricing with the stated goal of optimizing rates and revenue for units.

AvalonBay first signed a contract with Rainmaker to use the LRO software in March 2017, just after the announcement of the RealPage acquisition, per a court document provided to Bisnow by an attorney with Scott + Scott, which is co-leading the case on behalf of hundreds of renters around the nation. AvalonBay demanded specific language be written into its contract with Rainmaker and RealPage prohibiting the use of any data in its LRO solution other than what it owned itself or data that was publicly available.

The contract language also bars other RealPage clients from using AvalonBay data or sharing any recommendations made to Avalon Bay with other RealPage software users.

“AvalonBay was apparently so concerned by the possibility that Rainmaker and RealPage’s [Revenue Management Solutions software] might use AvalonBay’s data to set competitors’ prices and/or use those competitors’ prices to set AvalonBay’s prices … that AvalonBay insisted on even further protection,” prosecutors wrote in the suit.

AvalonBay signed additional clauses requiring Rainmaker and RealPage to expressly “represent and warrant” they would not violate input representation or data entry representation clauses and would “indemnify, defend and hold harmless [AvalonBay] from and against any and all claims, costs, expenses, losses, damages and liabilities (including legal costs and reasonable attorney’s fees) incurred by [AvalonBay]” if Rainmaker and RealPage breached these terms.

AvalonBay had not responded to Bisnow’s request for comment as of publication time. During an Aug. 2 earnings call, CEO Benjamin Schall declined to discuss why the company had been released from all cases, pointing analysts quizzing him on the matter to the court record.

“We were dismissed from the consolidation of the class-action lawsuits,” he said on the call. “There are no other litigations related to RealPage that we're aware of that we have not been dismissed from.”

More than 30 lawsuits alleging software sold by RealPage enabled owners of rental property to collude to inflate rents have been consolidated in the U.S. District Court for the Middle District of Tennessee in Nashville since April, bringing together cases filed by renters from coast to coast. Defendants include large REITs like Essex Property TrustEquity ResidentialCamden Property Trust and Mid-America Apartment Communities as well as industry heavy hitters such as Greystar Real Estate PartnersLincoln Property Co. and FPI Management.