The DOJ’s Deal with Greystar Could Reshape Multifamily Pricing Strategy

• The end of optimization: The DOJ has given its proposed settlement to Greystar for its use of rent optimization software.

• Germany’s losses: Lenders in Germany are starting to feel the losses from its prolonged real estate downturn.

• Savior by the Bay: The growth of AI has helped San Francisco’s struggling office market to its best leasing since pre-COVID.

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The DOJ’s Deal with Greystar Could Reshape Multifamily Pricing Strategy

The Justice Department has reached a proposed settlement with Greystar, the country’s largest apartment operator, to end allegations it participated in algorithm-driven rent price collusion. Federal regulators claim Greystar used third-party pricing software to coordinate rental rates with competitors, resulting in inflated prices across multiple markets. The deal, which still needs court approval, would force Greystar to halt these practices, submit to ongoing monitoring, and provide monetary relief to impacted renters. If approved, it could be one of the most significant antitrust actions the multifamily sector has seen in decades.

The case is part of a broader crackdown on the use of RealPage’s rent-setting software, which has been accused of aggregating sensitive market data from landlords and recommending coordinated pricing. While RealPage has argued its tools are designed for efficiency and market insight, critics say they effectively allow landlords to sidestep natural competition. The DOJ’s case against RealPage is still active, but the Greystar settlement shows the government’s willingness to pick off major industry players one by one in order to dismantle the alleged system.

Greystar, which manages more than 900,000 units worldwide, wields enormous influence in U.S. rental markets. Its pricing decisions ripple through entire cities, making the government’s scrutiny a clear warning shot to any operator relying heavily on shared data and predictive pricing. The settlement would not only require Greystar to cut ties with anticompetitive algorithms, but also to cooperate in the RealPage litigation—turning a former participant into a potential witness against the software provider.

For commercial real estate stakeholders, the implications are far-reaching. The enforcement action could push the industry away from centralized, data-fed rent-setting tools and toward more localized, property-specific pricing models. Attorney General Pam Bondi emphasized the stakes: “American greatness has always depended on free-market competition, and nowhere is competition more important than in making housing affordable again.” The emphasis on "free-market competition" in rental housing means that multifamily investors and REITs may need to factor in tighter pricing independence as part of their underwriting, particularly in markets where margins are already thin.

If approved, this settlement will likely serve as a blueprint for future enforcement, blending antitrust principles with housing policy concerns. While the industry has long embraced technology to maximize yield, this case shows that not all efficiencies survive legal scrutiny.

Overheard

Private Lenders Should See Germany's Real Estate Struggles as a Warning Sign

Germany’s worst property downturn since 2008 has claimed a symbolic casualty: the “Canyon” office development near Frankfurt. The groundbreaking project hit economic headwinds and is now reduced to a pop-up beach club and piles of unused sand. Two small pension funds, serving dentists and pharmacists in rural northern Germany, poured millions into the project through private credit structures during the negative-rate era. Instead of the stable returns they hoped for, the funds are now taking heavy writedowns and tapping reserves to cover the shortfall.

The collapse underscores how private credit became a lifeline for real estate developers when banks tightened lending, especially in Europe’s zero-yield years. Smaller institutional investors, hungry for returns, stepped into mezzanine and other riskier debt positions, often in highly complex capital stacks. When property values fell and financing costs spiked, these positions proved some of the most vulnerable, leaving investors with little recourse beyond absorbing the losses.

Germany was once a highly regarded real estate market but the recent economic struggles have left the country's real estate slumping. This is another lesson in how over-leveraged projects with thin equity cushions can quickly unwind when sentiment turns. As traditional lenders remain cautious, developers will continue to look for deals with alternative lenders and debt funds. But if more of these lenders start to take heavy losses, it might scare off the non-bank lenders who have stepped up in the absence of the large banks.

AI Surge Drives Bay Area Office Market to Strongest Leasing Since 2019

Hudson Pacific is capitalizing on an AI-driven upswing in Bay Area office demand. In 2025 so far, the company has signed 1.2 million square feet in leases, its strongest performance since 2019, with 558,000 square feet secured in the second quarter. About 60 percent of that was in the Bay Area. Vacancy rates in parts of its Silicon Valley holdings remain at 30 to 40 percent, but the surge of AI companies leasing both small (sub-10,000 square foot) and large (100,000 square foot or more) spaces is helping to offset market weakness. Recent high-profile tenants include Databricks, Snowflake, and Skild AI, reinforcing the region’s position as a global AI epicenter. Standout assets such as San Francisco’s Ferry Building and a long-term lease at 1455 Market Street show that location and tenant quality remain key differentiators.

For the tech real estate sector, this momentum points to a strategic counterbalance to a cooling data center market. While demand for AI-focused office space is accelerating, the data center sector is facing headwinds. Industry leaders like Microsoft and Amazon have slowed or paused some leasing and development activity as they address oversupply concerns, rising operational costs, and infrastructure challenges. Global demand for computing power remains strong, but power bottlenecks, tariff uncertainty, and environmental scrutiny are delaying new projects and pushing delivery timelines further out.

The shift highlights an important divergence. Office properties in innovation hubs can adapt and capture AI-related demand more quickly than data centers, which often require years of planning and massive capital investments. For landlords, the opportunity lies in creating flexible, amenity-rich work environments that attract fast-scaling tech tenants. As AI companies seek spaces that foster collaboration, talent recruitment, and brand visibility, urban office assets with strong connectivity and vibrant surroundings could see a lasting advantage over slower-moving segments of the tech infrastructure market.

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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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