FBI raids Atlanta business owner with ties to RealPage

“We are cooperating fully with this investigation and understand that neither Cortland nor any of our employees are ‘targets’ of this investigation. Due to ongoing litigation, we cannot provide additional comment at this time,” the company said in the emailed statement.

MLex from LexisNexis, an industry publication covering regulatory and antitrust issues, first reported news of the research last week.

Founded in 2005 in Atlanta, Cortland owns tens of thousands of units and manages apartment complexes across the United States, with offices in Charlotte, Dallas, Denver, Greenwich, Houston, Orlando and Phoenix, according to reports published on its website. It also operates a management and development platform in the United Kingdom.

Cortland is one of several corporate landlords facing civil lawsuits for their alleged role in an alleged nationwide conspiracy to fix and inflate the price of multifamily rental housing.

A 2022 ProPublica investigation into how RealPage’s technology could artificially inflate rents sparked dozens of class-action lawsuits across the country. The government opened an antitrust investigation into RealPage in November 2022. In March, Politico reported that the DOJ had opened a criminal investigation. The media relied on four anonymous sources with knowledge of the subject.

RealPage spokeswoman Jennifer Bowcock declined to comment on the research. She said the company is cooperating with government authorities, but that the civil lawsuits against the company are without merit and that the company’s technology “is deliberately designed to comply with the law.”

“Our revenue management solutions use proven, accurate data to find fair prices for residents and property managers,” Bowcock wrote in an email.

The civil dispute centers on how RealPage’s technology mines a database of rental prices and makes recommendations to landlords about what they should charge their tenants.

By focusing on hiking the price of rent and outsourcing pricing decisions to RealPage’s algorithm, the consequences for U.S. consumers are higher rents, according to a federal class action lawsuit in Nashville, Tennessee, which consolidated the complaints.

In court papers filed last September, tenants said there were about 484,000 multifamily rental units in the Atlanta, Sandy Springs and Alpharetta markets. More than 53% of owners, managers and owner-operators used RealPage software in these markets, including Cortland and property management company Pinnacle, according to the complaint.

“Widespread adoption of Defendant’s RealPage revenue management software has led to an explosive increase in rents in recent years, with Atlanta tenants paying approximately 56% more in rent today than in 2016,” the document states of 302 pages.

The complaint accuses trade associations Atlanta Apartment Association, Georgia Apartment Association and Southeast Regional Advisory Council for Apartment Life of “acting as conduits for the cartel.”

Bowcock said claims regarding “the number of rental units associated with properties that use RealPage’s revenue management software are false.”

In November, the Justice Department’s Antitrust Division filed a statement of interest in the case.

As housing prices and rents weigh on American households, housing policy has become one of President Joseph Biden’s priorities as he seeks re-election. In his State of the Union address in March, he dedicated part of his speech to corporate landlords.

“For millions of renters, we are cracking down on big landlords who are using antitrust laws – who are breaking antitrust laws by fixing prices and raising rents,” he said.