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Greystar, the largest landlord in the U.S. with multiple major properties in Mountain View, has reached a $7 million settlement in an antitrust lawsuit that alleges the property management company colluded with competitors to drive up rent prices, according to a recent press release from California Attorney General Rob Bonta.
The settlement is part of an ongoing lawsuit filed last year by the U.S. Department of Justice and a coalition of nine state attorneys general against RealPage, a software company that uses algorithmic models to recommend price increases to subscribers.
“We are pleased this matter is resolved and remain focused on serving our residents and clients,” Greystar spokesperson Garrett Derderian said in a statement to this publication.
According to Bonta’s press release, Greystar artificially raised rents by gathering and sharing competitively sensitive data using RealPage’s algorithms.
“Whether it’s through smoke-filled backroom deals or through an algorithm on your computer screen, colluding to drive up prices is illegal,” Bonta said.
Greystar and other property management companies discussed “competitively sensitive topics,” including pricing strategies and rents, directly with each other, according to the press release, which described the practices as anticompetitive and illegal.
“RealPage knew what competing landlords were charging and could increase profits for landlords by using that information to recommend landlords set or raise their prices uniformly, thereby eliminating competition, and leaving renters no choice but to pay artificially high prices,” the press release said.
In the settlement, Greystar agreed to pay $7 million in penalties and fees to the state and said it would cooperate with the state’s prosecution against RealPage. Greystar also agreed to stop using software by any company that uses competitively sensitive information to align rent prices, according to the press release.
Greystar is the property manager of several apartment buildings and townhomes in Mountain View, including the Landsby, Revela, Rowe at Pear Village, Sevens Luxury Apartment, mResidences Mountain View, 599 Castro and Central Park at Whisman Station.
Greystar also manages other properties along the Peninsula, including Woodland Park in East Palo Alto and Terman in Palo Alto.
The “price alignment scheme” with RealPage particularly impacted multifamily apartment buildings in Southern California, Bonta said in a January press release. The attorney general’s office told this publication that it could not comment on whether rental properties in Santa Clara and San Mateo counties were among those affected because of the ongoing lawsuit against RealPage and the property management companies.
In addition to managing properties, Greystar is also a prominent real estate developer. The company is behind recent plans to redevelop the Chase Bank at the corner of Castro Street and El Camino Real in Mountain View into a mixed-use six-story residential complex.
