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RealPage

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RealPage
Company typePrivate
Nasdaq: RP (before acquisition)
IndustrySoftware
Founded1998; 26 years ago (1998)
HeadquartersRichardson, Texas
Key people
Dana Jones (CEO)
OwnerThoma Bravo
Websitewww.realpage.com

RealPage, Inc. is an American property management software company, owned by the private equity firm Thoma Bravo, and known for its algorithmic rent setting, which has been accused of antitrust violations and price fixing. Its services are used to manage more than 24 million housing units worldwide in multifamily, commercial, single-family, and vacation rentals.[1]

In 2024, the United States Department of Justice sued RealPage, alleging that its software represented a price fixing scheme to raise rents.[2] San Francisco banned algorithmic rent pricing in August 2024.[3] Dana Jones is the chairman and chief executive officer.[4]

History

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RealPage was founded in 1998 with the acquisition of Rent Roll, Inc.,[5] a provider of on-premises property management systems for the conventional and affordable multifamily rental housing markets. RealPage moved its corporate headquarters to Richardson, Texas in 2016, and in 2017 acquired four companies: apartment market data provider Axiometrics; utility and energy management company American Utility Management; revenue management and pricing provider Lease Rent Options; and On-Site, a leasing and marketing platform company.[6]

In 2018, RealPage announced an agreement to purchase electronic payment platform company ClickPay, located in Hackensack, New Jersey.[7] In July 2019, RealPage acquired utility management company SimpleBills.[8] In December 2019, RealPage acquired Buildium.[9] In January 2020, RealPage has agreed to acquire Modern Message, Inc.[10] In September 2020, RealPage acquired real estate IoT startup Stratis.[11]

In December 2020, private-equity firm Thoma Bravo announced it would acquire RealPage for $9.6 billion, paying $88.75 per share for the company, a premium of 31% for their closing prices at the time. Its shares were reported up 26% that year.[12] The acquisition completed in April 2021.[13] In January 2021, RealPage acquired bulk Internet provider WhiteSky.[14] Later, in May of that same year, RealPage acquired Boingo Wireless's Multifamily Business.[15]

Reactions and lawsuits

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RealPage has been accused of antitrust violations and price fixing in the rental market.[16] Lawsuits against RealPage make the claim that if it is illegal for an individual to engage in price fixing, then it should be illegal when it is done by software or algorithm.[17] The lawsuits also accuse RealPage of pressuring its customers to comply with their pricing suggestions.[17]

Lawsuits

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In October 2022, ProPublica reported that landlords use RealPage's asset optimization algorithm called YieldStar (later rebranded as AI Revenue Management) to increase rents throughout the United States, naming its users an illegal cartel that encouraged participants to withhold rental units from the market. Approximately 90% of property managers/landlords approve price changes suggested by the software. RealPage's software strongly discourages landlord users from negotiating rent prices with tenants.[18] In November 2022, the United States Department of Justice's Antitrust Division opened an investigation into RealPage, which is accused of contributing to higher rent prices throughout the United States. The company's YieldStar software is alleged to use an algorithm to "help landlords push the highest possible rents on tenants."[19] In November 2023, Attorney General of the District of Columbia Brian Schwalb filed an antitrust price-fixing lawsuit against RealPage and more than a dozen of the largest apartment building landlords in Washington, D.C., accusing them of illegally conspiring to set rental prices artificially high by sharing competitively sensitive data using RealPage's revenue management platform.[20]

In April 2023, more than 20 private civil antitrust lawsuits against RealPage, which had been filed primarily on behalf of renters of multifamily apartments and which alleged that the company illegally conspired to keep prices above market rates, were consolidated in federal court in Nashville, Tennessee.[21] In November 2023, the US Justice Department filed a "statement of interest" in support of the lawsuits, arguing that the use of shared data and algorithms must "be subject to the same condemnation" as other price-fixing schemes.[22][23] In December 2023, Chief US District Judge Waverly Crenshaw denied RealPage's bid to dismiss the consolidated lawsuits.[24] In August 2024, the Department of Justice along with the Attorneys General of eight states filed a civil antitrust lawsuit against RealPage, alleging that the company engaged in an "unlawful scheme to decrease competition among landlords" and sought "to monopolize the market for commercial revenue management software that landlords use to price apartments," thereby harming millions of renters by depriving them of the benefits of competition.[2][25]

Bans

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In January 2024, U.S. Senators Ron Wyden and Peter Welch introduced federal legislation, titled the Preventing the Algorithmic Facilitation of Rental Housing Cartels Act of 2024, that would ban the coordination of rental housing price information, as well as prohibiting the use of services of companies such as RealPage and Yardi that allow landlords to coordinate rental housing prices.[26][27] In August 2024, the San Francisco Board of Supervisors unanimously approved an ordinance banning landlords from using software or algorithms, such as those offered by RealPage and Yardi, to set rents or manage occupancy within the city.[3]

References

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  1. ^ Rodriguez, James (April 10, 2024). "Landlords are using a popular software tool to jack up your rent". Business Insider. Archived from the original on June 8, 2024. Retrieved August 3, 2024.
  2. ^ a b "Justice Department Sues RealPage for Algorithmic Pricing Scheme that Harms Millions of American Renters". United States Department of Justice. August 23, 2024. Archived from the original on August 23, 2024. Retrieved August 23, 2024.
  3. ^ a b News • •, Ruth Dusseault | Bay City (September 4, 2024). "New San Francisco ordinance bans algorithmic rent pricing tools". NBC Bay Area. Retrieved September 5, 2024.
  4. ^ "Management Team". RealPage.com. Retrieved February 1, 2024.
  5. ^ "Rent Roll, Inc. and RealPage Communications, Inc. Merge". Business Wire (Press release). December 11, 1998. Archived from the original on March 3, 2016. Retrieved February 24, 2016 – via Thefreelibrary.com. Three years later, they released their first on-demand property management product and since then, expanded the on-demand software solutions to include a number of value-added services from property management to renter's insurance and more.
  6. ^ Lane, Ben (August 2, 2017). "RealPage continues expanding, agrees to buy On-Site for $250 million - Acquiring leasing and marketing platform for rental properties". housingwire.com. Archived from the original on June 28, 2018. Retrieved June 28, 2018.
  7. ^ "BRIEF-Realpage To Acquire Clickpay For $218.5 Mln". Reuters. April 20, 2018. Archived from the original on June 28, 2018. Retrieved June 28, 2018.
  8. ^ Womack, Brian. "RealPage makes another purchase – and this time it's a Texas technology firm". Dallas Business Journal. Archived from the original on February 1, 2024. Retrieved July 29, 2019.
  9. ^ "RealPage to Acquire Buildium". realpage.com. Archived from the original on July 10, 2020. Retrieved July 7, 2020.
  10. ^ "RealPage to Acquire Modern Message". Business Wire (Press release). Archived from the original on February 6, 2020. Retrieved February 6, 2020 – via finance.yahoo.com.
  11. ^ Lardinois, Frederic (August 31, 2020). "RealPage acquires real estate IoT startup Stratis". techcrunch.com. Archived from the original on September 4, 2020. Retrieved September 3, 2020.
  12. ^ Gottfried, Miriam; Lombardo, Cara (December 21, 2020). "Thoma Bravo Agrees to Buy RealPage for $9.6 Billion". Wall Street Journal. ISSN 0099-9660. Archived from the original on December 21, 2020. Retrieved December 22, 2020.
  13. ^ "Thoma Bravo Completes Acquisition of RealPage" (Press release). Business Wire. Archived from the original on April 23, 2021. Retrieved April 22, 2021.
  14. ^ "RealPage® Acquires WhiteSky Communications" (Press release). Business Wire. January 4, 2021. Archived from the original on January 4, 2021. Retrieved January 4, 2021.
  15. ^ "M&A Advisory: RealPage Has Acquired Boingo's Multifamily Business From Boingo". Stephens. May 27, 2021. Retrieved August 29, 2024.
  16. ^ Hoover, Amanda (July 17, 2024). "RealPage Has Been Accused of Price-Fixing Rents. Now It's on the Offensive". Wired. Retrieved August 11, 2024.
  17. ^ a b Karma, Rogé (August 10, 2024). "We're Entering an AI Price-Fixing Dystopia". The Atlantic. Retrieved August 11, 2024.
  18. ^ Vogell, Heather; Coryne, Haru; Little, Ryan (October 15, 2022). "Rent Going Up? One Company's Algorithm Could Be Why". ProPublica. Archived from the original on October 15, 2022. Retrieved October 15, 2022.
  19. ^ Roth, Emma (November 26, 2022). "The DOJ is reportedly investigating rent-setting software company RealPage". The Verge. Archived from the original on November 26, 2022. Retrieved November 26, 2022.
  20. ^ Scarcella, Mike (November 2, 2023). "DC sues tech company RealPage, landlords over rental prices". Reuters. Archived from the original on November 3, 2023. Retrieved May 23, 2024.
  21. ^ Scarcella, Mike (April 10, 2023). "RealPage antitrust lawsuits over rent prices consolidated in Tennessee". Reuters. Retrieved May 23, 2024.
  22. ^ Scarcella, Mike (November 16, 2023). "Renters suing RealPage get US backing in pricing lawsuits". Reuters. Archived from the original on November 18, 2023. Retrieved May 22, 2024.
  23. ^ Vogell, Heather (November 16, 2023). "DOJ Backs Tenants in Case Alleging Price-Fixing by Big Landlords and a Real Estate Tech Company". ProPublica. Archived from the original on November 16, 2023. Retrieved May 23, 2024.
  24. ^ Scarcella, Mike (December 29, 2023). "RealPage must face renters' price-fixing lawsuit over multifamily housing". Reuters. Retrieved May 23, 2024.
  25. ^ Roth, Emma (August 23, 2024). "US sues RealPage over rent-setting software that allegedly drove up prices". The Verge. Archived from the original on August 23, 2024. Retrieved August 24, 2024.
  26. ^ "Wyden and Welch Introduce Legislation to Crack down on Companies that Inflate Rents with Price-Fixing Algorithms". www.wyden.senate.gov. January 30, 2024. Archived from the original on August 16, 2024. Retrieved August 24, 2024.
  27. ^ Vogell, Heather (January 30, 2024). "We Found That Landlords Could Be Using Algorithms to Fix Rent Prices. Now Lawmakers Want to Make the Practice Illegal". ProPublica. Archived from the original on August 22, 2024. Retrieved August 24, 2024.
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