The Atlanta headquarters of Cortland Partners, a major property management company, was recently subjected to an FBI raid as part of a US Department of Justice (DOJ) antitrust investigation. This investigation centers on allegations of a conspiracy to artificially inflate apartment rental prices.
The raid, which took place on May 22nd, 2024, signals a deepening probe into the rental housing market and the potential role of pricing software provided by RealPage, a company whose clients include many of the largest property management firms in the US. The DOJ is investigating potential collusion among these firms to manipulate rental rates, a practice that could violate antitrust laws.
Cortland Partners, founded in 2005 and headquartered in Atlanta, owns and manages apartment communities across the nation. With regional offices in numerous cities including Charlotte, Dallas, and Denver, the company’s extensive reach makes it a significant player in the national rental market. This raid places Cortland Partners Atlanta operations directly under scrutiny in the DOJ’s investigation.
Alt text: A modern apartment complex with a pool and outdoor amenities, potentially managed by Cortland Partners.
The DOJ’s investigation is exploring the use of RealPage’s pricing software, specifically its “AI Revenue Management” platform (formerly known as YieldStar). This software utilizes algorithms to analyze market data and recommend rental rates, raising concerns that it could be used to facilitate coordinated price increases across competing properties.
Cortland Partners, along with dozens of other property management companies, is also facing a class-action lawsuit in Tennessee alleging the use of RealPage’s software to manipulate rental prices. The lawsuit claims that Cortland uses the software to manage its vast portfolio of over 58,000 apartments nationwide, contributing to artificially inflated rents.
Alt text: A screenshot of RealPage’s AI Revenue Management software interface, used for setting rental prices.
RealPage, acquired by private equity firm Thoma Bravo in 2020, serves over 31,700 clients, including the top ten largest property management companies in the US. This widespread use of its software underscores the potential impact of the DOJ’s investigation on the rental housing market.
The investigation into potential antitrust violations in the rental housing market extends beyond the DOJ. Several US Senators, including Sherrod Brown, Elizabeth Warren, and Bernie Sanders, have expressed concerns about the use of pricing algorithms and their potential to inflate rents and suppress competition. In late 2023, the DC attorney general filed a lawsuit against RealPage and 14 major landlords alleging collusion to artificially inflate rents.
The FBI raid on Cortland Partners Atlanta headquarters highlights the seriousness of the DOJ’s investigation and the potential consequences for companies found to be engaging in anti-competitive practices. The outcome of this investigation could significantly impact the rental housing market and the affordability of housing for millions of Americans.
