Camden Property Trust is the latest landlord to cut a deal with tenants to settle a sprawling class action that ensnared most of the country’s largest multifamily operators.
The publicly traded REIT reached a deal this week that would see it pay a combined $53M to resolve all the claims against it in a civil case that accuses dozens of landlords of working with RealPage, and using its software, to coordinate rents.
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Camden’s deal is similar to those struck by other landlords, and it comes roughly six months after RealPage made an agreement with federal prosecutors in a separate civil case to resolve antitrust claims related to the same software. RealPage is still being sued in the class action in the Middle District of Tennessee that had at one point included roughly four dozen multifamily firms.
Camden disclosed its settlement in a filing with the Securities and Exchange Commission dated April 9. The REIT says it will pay the fine in two, $26.5M installments, the first of which will be made within 45 days of the deal's approval and the second coming within four months. The fine includes the recovery amount for the tenants, their attorneys fees and administrative costs.
The REIT says it will ask the court for preliminary approval of the settlement by May 15. The deal also includes “commitments regarding the Company’s business practices, including provisions relating to the disclosure and use of nonpublic data and the Company’s use of revenue management software, all of which the Company believes will not require material changes to current operations.”
Camden denies any fault or liability and is settling to “avoid the significant costs and distraction of protracted litigation” and “reduce meaningful legal uncertainty and risk associated with complex antitrust litigation.”
The REIT declined a request for comment Friday morning. Its stock was trading in positive territory early Friday and is down roughly 7% since the start of the year. The multifamily operator owned 172 properties with a combined 58,759 apartments as of Feb. 5.
A group of 27 landlords that were also being sued in the class action struck a deal in October that included a combined $141M in fines to resolve their antitrust allegations. Greystar Management Services, AIR Communities, Bell Partners, Brookfield Properties and a host of others were among the firms to settle, while some including Camden Property Trust, Cortland, Mid-America Apartment Communities, Lincoln Property Co. and RealPage itself fought on.
Mid-America Apartment Communities agreed in January to pay $53M to settle while denying wrongdoing, like all the other landlords.
The lawsuits were spurred by a 2022 ProPublica investigation alleging that RealPage’s software was being used to create “a new kind of cartel” that could indirectly coordinate rents.
RealPage’s AI Revenue Management software, previously known as YieldStar, is at the center of the fight. The tool lets property managers and owners monitor building metrics such as occupancy, while the software uses an algorithm stocked with both public and private data to suggest rental rates.
RealPage and the landlords in the antitrust cases have consistently denied wrongdoing. The federal antitrust case surprised many in the commercial real estate sector with pronouncements that widely used practices, like calling around for rents at neighboring buildings, were anticompetitive.
The Thoma Bravo-backed software firm didn’t admit to breaking any laws in its settlement with the Department of Justice, but it did agree to commit to some changes in its business practices. RealPage said at the time that the changes wouldn’t materially impact its business and that most had already largely been implemented.
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