Cushman & Wakefield, Greystar Added to DOJ Rental Collusion Case

The Justice Department is thrusting the largest rental property managers into the spotlight as it expands a price-fixing lawsuit alleging widespread collusion in the housing rental market.

In an amended lawsuit against RealPage Inc., a top software provider to the multifamily rental industry, the Justice Department on Tuesday accused seven major landlords including Cushman & Wakefield Plc and Greystar Real Estate Partners LLC of illegally colluding to drive up rent prices. In a separate filing, the Justice Department said it was settling with one of the landlords Cortland Management LLC.

Landlords understand that RealPage’s products “use their data to recommend prices not just for their own units, but also for competitors,” the Justice Department said. “Landlords agree to provide this information for use by their competitors because they understand they will be able to leverage the sensitive information of their rivals in turn.”

Last year, the DOJ sued Thoma Bravo LLC’s RealPage Inc. for allegedly violating antitrust law by helping property owners and managers collude on millions of units across the country.

The DOJ was until recently conducting a parallel criminal probe of the companies. RealPage said last month the agency informed it that part of the investigation had closed.

The Biden Administration has made antitrust enforcement and competition policy a central piece of its economic agenda, particularly in key industries that impact people’s daily lives like housing.

Managing the lawsuit will fall to the incoming Trump Administration and Gail Slater, President-elect Donald Trump’s pick to run the DOJ’s antitrust division.

In the original complaint filed in August by the DOJ and a group of state attorneys general in North Carolina federal court, antitrust enforcers said RealPage’s software, which helps landlords set rental unit pricing, has effectively raised prices on renters illegally.

The lawsuit represents the Justice Department’s first big algorithmic collusion case as alleged schemes become more sophisticated through the use of technology.

In addition to Cushman & Wakefield and GreyStar, the new defendants include Camden Property Trust, Livcor LLC, Pinnacle Property Management Services LLC and Willow Bridge Property Company LLC.

Representatives for the firms didn’t immediately respond to requests for comment.

The private data that landlords share with RealPage include a unit’s effective rent, rent discounts, rent terms, lease status and unit characteristics such as layout and amenities, according to the complaint. The landlords also share “the number of potential future renters who have visited a property or submitted a rental application.”

Housing affordability was a key issue in the presidential election. President Joe Biden specifically criticized collusion in the rental market in his most recent State of the Union address. The average US rent has skyrocketed by 33% since the beginning of the pandemic, according to a Zillow index.

The case is US v. RealPage Inc. et al, 24-cv-00710, US District Court, Middle District of North Carolina.

Top photo: The U.S. Department of Justice building in Washington, DC, on Saturday, June 8, 2024. Photographer: Graeme Sloan/Bloomberg