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The FBI recently conducted a surprise raid on the Atlanta office of Cortland, a national developer and property manager, related to its use of RealPage’s rent optimization software. As we speculate in today's email, this raid suggests potential criminal implications in the ongoing legal troubles for RealPage, which is already facing multiple class action lawsuits.

Faced with increasing carbon emissions regulations, building owners worldwide are intensifying efforts to reduce energy use at their properties. As reviewed in a new article, major owners like industrial giant Prologis and global development firm Hines have committed to achieving net zero emissions across their portfolios in the next few decades.

This week in Propmodo Technology, we explore multifamily management, discussing how apartments are using rewards programs to retain tenants as the rental market softens. We also examine whether smart home technology is making apartment living easier or more complicated, and how multifamily properties can be future-proofed with smart access control.

Now, let's dig in!

What the Cortland FBI Raid Means for RealPage

The news is out that the FBI has conducted a surprise search of the Atlanta office of the national developer and property manager Cortland. The raid was related to the company’s use of RealPage’s rent optimization software and follows years of legal troubles for the software company and its biggest clients. RealPage is currently involved in multiple class action lawsuits brought by civil plaintiffs and the attorneys general of Arizona and Washington D.C. However, this raid signifies something much bigger than the previous suits.

It's important to note that an FBI search is associated with a criminal case, not the civil ones that RealPage is already facing. These raids typically only occur after an extensive investigation. Such raids are akin to a search warrant, meaning a magistrate judge found probable cause that a crime had been committed. Since judges prefer not to authorize searches that yield no evidence, the probable cause was likely substantial.

A peculiarity of this search is that it was conducted only on one of the property companies named in the RealPage lawsuits. While this is speculative, there could be several reasons the FBI chose Cortland. One reason is that Cortland owns a large portfolio of properties in Arizona, the state with the strongest case against RealPage. Another possible reason is that the DOJ targeted Cortland because they have been particularly vocal about their use of RealPage (a video testimonial can be seen here). There might also have been a whistleblower at Cortland who tipped off the FBI about which files would provide the necessary evidence.

It is difficult to know the exact reason Cortland was raided and not any of the other large landlords involved in the RealPage legal drama. What we do know is that this represents a major escalation of the DOJ’s involvement in the case. Rather than being a civil issue, which can often be resolved by settling with the plaintiffs, RealPage and its clients might now be facing much more serious charges and a more formidable adversary.

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Insider Insights

🌼 Doom or bloom? New data is showing that, despite the continued concern about the health of the commercial real estate market, delinquency rates are only sightly elevated and nowhere near where they were during the great financial crisis.

🚪 Artificial doorman Door.com has announced that it is rolling out an AI powered application that is designed specifically for apartment buildings.

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Propmodo Technology: Multifamily Management

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