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RealPage's antitrust lawsuit over rent optimization software has drawn attention, but as we discuss in today's email, hotel data provider STR and its parent company CoStar also face a lawsuit in Washington state for their price benchmarking product. Accused of improper data sharing among hotel competitors, CoStar says its benchmarking software is a standard market tool, warning that this case could set a troubling precedent.

New York Community Bancorp, a major NYC commercial real estate lender, faced a fourth-quarter 2023 loss and a stock drop early this year. Bolstered by a $1 billion investment and a new CEO, NYCB is now restructuring its leadership and strategy. But, as detailed in a new article, the bank's involvement in rent-stabilized multifamily properties, struggling with defaults due to restrictive laws and high-interest rates, adds to its precarious situation.

Join us on May 30, 2024, at 1:00 PM ET for a Propmodo Live webinar discussion on adapting office leasing strategies. Industry experts from CoStar, JLL, Cohesion, and Propmodo will share insights on hybrid work, high interest rates, shrinking workspaces, innovative office design, and effective lease negotiations. Don't miss out—register now!

This week in Propmodo Technology, we delve into access control for multifamily and commercial buildings. We'll examine the new standards that are mitigating cybersecurity threats in modern high-tech access control systems and discuss the role of access control within a building's broader security ecosystem. We'll also explore the growing trend of replacing traditional keys with mobile devices like smartphones and smartwatches.

Now, let's dig in!

CoStar Claps Back at Plaintiff Over Hotel Data Antitrust Case

RealPage has garnered most of the attention for its antitrust lawsuit over its rent optimization software, but it is not the only tech company being drawn into the conspiratorial fray. In February, the hotel data provider STR and its parent company CoStar were also hit with a lawsuit in Washington state over their price benchmarking product. The lawsuit is similar to the ones that RealPage is currently litigating.

The suit claims that STR is violating the Sherman Antitrust Act because of the way it allows hotel operators to share pricing data: “Competitors in the luxury hotel industry have agreed to continuously share their detailed, audited, competitively-sensitive information about their prices, supply, and future plans through an intermediary, Smith Travel Research (“STR”), which is owned by Defendant CoStar Group. The purpose of this exchange is for competitors to share ‘super-timely revenue and occupancy data’ so that competitors can ensure they are each getting their ‘fair share’ of revenues.”

This week, the defendants’ legal team took aim at this accusation in a motion to dismiss. According to the motion, the difference is that STR did not use an algorithm or provide pricing suggestions. Instead, they provide a benchmark of what is being charged in each market.

“To Defendants’ knowledge, no court has ever found benchmarking activities like those at issue here (which are analyzed under the ‘rule of reason’) to constitute an improper information exchange that violates Section 1 of the Sherman Act. Such a finding would set a new precedent that could upend numerous industries where benchmarking is a common and important market-intelligence tool.”

The motion also argues that the plaintiffs didn’t provide enough information to prove their claims of collusion: “The Complaint fails to identify ‘who’ entered into the alleged conspiracy, ‘when’ the alleged conspiracy purportedly began, or ‘what’ the Hotel Defendants allegedly agreed to do.”

It is clear that this case isn’t the same as the one brought against RealPage. But, it remains unclear if these differences are enough to keep STR out of legal trouble. Many companies offer benchmarking, and making that illegal would put a lot of them at risk. Judges, however, are often more concerned with the specific interpretation of laws than the second-order effects of any new precedent. CoStar has been on a steady growth streak, partly due to the acquisition of STR. But now it is seen that being the dominant data provider in an industry exposes them to risks in today’s legal environment and that the winner-take-all nature of data also makes them a target for litigation and regulation.

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🙋‍♂️ Second for second mortgages: Freddie Mac’s Head of Single-Family Acquisitions spoke up about his agency’s decision to start purchasing second mortgages.

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Overheard

Propmodo Technology: Access Control

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