Propmodo Daily

By Franco Faraudo · Feb. 8, 2024

Greetings!

The price fixing lawsuit against RealPage and the landlords that use it has taken a back seat to the commission-splitting lawsuits pummeling the NAR and many residential brokerages. But it, too, has already started to create fallout. A few of the defendants have now chosen to settle, leaving us to ask the question, will the rest follow?

Also we’ve pulled some data together to see if the cities that are creating the most housing with office conversions are able to actually slow rent growth.

This week, Propmodo Technology, in collaboration with ROOM, explores the latest advancements that are defining the future of hybrid workspaces. We're looking into everything from the adaptability of modular designs to calculating office space requirements to reevaluating the necessity of desks. Our focus is on how facility managers and workplace specialists are integrating technology into the management of office environments.

Now, let's dig in!

First RealPage Lawsuit Defendants Settle, Will Others Do the Same?

Ever since we published an article about one man’s Quixotic quest to prosecute landlords for their use of pricing software, we have been following the case against RealPage. Eventually, lawsuits were filed across the country accusing landlords of monopolistic behavior, armed with proof that areas with high usage of RealPage’s YieldStar pricing service had seen rents escalate more than the rest of the country.

The main defendant in these cases is RealPage itself, but also listed are a number of large landlords that have admitted to using the software. At the onset of these cases, most in the property industry thought they were little more than frivolous. But they gained momentum. Senators called for investigations and eventually, the DOJ opened an investigation.

Now, the first of the property companies listed in the lawsuits have decided to settle. Both Apartment Income REIT Corp (recently spun out from AIMCO) and Dallas-based Pinnacle Property Management Services have said that they have reached an agreement. Terms were not released, but the tone of the statement given by the Apartment Income REIT shows the contentious nature of the settlement: "Despite the baselessness of the claims, AIR is pleased to exit the litigation early in a favorable manner.”

The settlement comes as regulators are focusing more closely on pricing algorithms. In September of last year a bill titled Algorithmic Accountability Act of 2023 was filed, which would direct the FTC to require impact assessments of automated decision systems for things like pricing. Last October, Amazon was sued by the FTC for using an algorithmic tool designed to raise prices for goods that they thought other retailers would price match.

As we have seen in the commission-splitting lawsuits, once one defendant settles, it becomes a harder decision for the other defendants on whether or not to continue to fight. A settlement would not get these companies out of the hot seat of the DOJ, but it could be an easy way for them to stop paying legal expenses and pick themselves up out of the mud.

Feedback Loop

Yesterday, we asked you whether or not WeWork should consider a funding or buyout offer from Adam Neumann’s Flow. Looks like we have a pretty clear consensus against the offer. Here are the results:

🚩 No, the dude is toxic and just trying to take advantage of a situation he helped create. 82%

💰 Yes, they need that money, and a bit of exposure never hurt. 18%

Office-To-Residential Conversion

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Propmodo Technology: Hybrid Workplace

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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