Case 3:22-cv-01611-WQH-MDD Document 1 Filed 10/18/22 PageID.1 Page 1 of 26
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`Sophia M. Rios (SBN 305801)
`BERGER MONTAGUE PC
`401 B Street, Suite 2000
`San Diego, CA 92101
`Tel: (619) 489-0300
`Email: srios@bm.net
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`[additional counsel listed on signature page]
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`Counsel for Plaintiff and the Proposed Class
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF CALIFORNIA
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`Case No.
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`CLASS ACTION COMPLAINT
`
`JURY TRIAL DEMANDED
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`SHERRY BASON; LOIS WINN;
`GEORGES EMMANUEL NJONG
`DIBOKI; JULIA SIMS; and SOPHIA
`WOODLAND, Individually and on
`Behalf of All Others Similarly Situated,
`Plaintiffs,
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`vs.
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`REALPAGE, INC.; GREYSTAR REAL
`ESTATE PARTNERS, LLC; LINCOLN
`PROPERTY CO.; FPI
`MANAGEMENT, INC.; MID-
`AMERICA APARTMENT
`COMMUNITIES, INC.; AVENUE5
`RESIDENTIAL, LLC; EQUITY
`RESIDENTIAL; ESSEX PROPERTY
`TRUST, INC; THRIVE
`COMMUNITIES MANAGEMENT,
`LLC; and SECURITY PROPERTIES
`INC.,
`Defendants.
`
`
`CLASS ACTION COMPLAINT
`
`'22
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`CV1611
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`MDD
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`WQH
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`

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`NATURE OF THE ACTION
`Plaintiffs Sherry Bason, Lois Winn, Georges Emmanuel Njong Diboki,
`1.
`Julia Sims, and Sophia Woodland challenge a cartel among lessors of multifamily
`residential real estate leases (“Lessors”) to artificially inflate the prices of multifamily
`residential real estate in the United States above competitive levels.
`Until approximately 2016, and potentially earlier, many of the nation’s
`2.
`largest Lessors priced their leases based upon their own assessments of how to best
`compete against other Lessors. Lessors generally priced their units competitively to
`maximize occupancy (that is, maximizing output). Lessors had an incentive to lower
`their prices to attract lessees away from their competitors, until all available leases
`were sold. In this way, competition drove rent levels to reflect available supply of
`rental units and lessee demand. Lessors also independently determined when to put
`their leases on the market, resulting in unpredictable supply levels—a natural
`phenomenon in a competitive market. When supply exceeded demand, Lessors cut
`prices.
`As a former industry executive explained, the market structure is “a
`3.
`classic prisoners’ dilemma.” Since residential real estate is a perishable resource (if
`a unit sits vacant for a month, a Lessor can never monetize that lost month of rent),
`Lessors favored a strategy of keeping “heads in the beds,” a term for offering
`sufficiently attractive lease pricing to maximize physical occupancy levels in
`multifamily residential real estate properties. Thus, that industry executive opined,
`while all Lessors “would be better off limiting their rent reductions [discounts],” if
`any Lessor “lower[ed] their rents while the others don’t, then that [Lessor] would
`outperform.”
`However, beginning in approximately 2016, and potentially earlier,
`4.
`Lessors replaced their independent pricing and supply decisions with collusion.
`Lessors agreed to use a common third party that collected real-time pricing and
`supply levels, and then used that data to make unit-specific pricing and supply
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`CLASS ACTION COMPLAINT
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`recommendations. Lessors also agreed to follow these recommendations, on the
`expectation that competing Lessors would do the same.
`That third party is RealPage, Inc. (“RealPage”). RealPage provides
`5.
`software and data analytics to Lessors. RealPage also serves as the mechanism by
`which Lessors collude and avoid competition, increasing lease prices to Plaintiffs and
`other members of the proposed Class. RealPage openly boasts that its services
`“balance supply and demand to maximize [Lessors’] revenue growth.” And that is
`precisely what RealPage has done, facilitating an agreement among participating
`Lessors not to compete on price, and allowing Lessors to coordinate both pricing and
`supply through two mutually reinforcing mechanisms in furtherance of their agreed
`aim of suppressing price competition for multifamily residential real estate leases.
`First, Lessors “outsource daily pricing and ongoing revenue oversight”
`6.
`to RealPage, replacing separate centers of independent decision-making with one.
`RealPage collects up-to-the-minute data on the historical and contemporaneous
`pricing from participating Lessors, data that, according to RealPage, is updated
`“every time [Lessors] make or change a [lease] renewal offer,” spanning over “16
`million units,” which is a “very large chunk of the total inventory in the country.” It
`standardizes this data to account for differences in the characteristics or “class” of the
`property in question, and then sets prices for participating Lessors using a common
`formula. RealPage touts that it sets pricing for Lessors’ “properties as though we
`own them ourselves”—i.e., the participating Lessors’ cartel replicates the market
`outcomes one would observe if they were a monopolist of residential leases, which
`is the goal of any cartel.
`7. While Lessors are able reject the RealPage pricing through an onerous
`process, RealPage emphasizes the need for “discipline” among participating Lessors.
`To encourage adherence to its common scheme, RealPage explains that for its
`services to be most effective in increasing rents, Lessors must accept the pricing at
`least eighty percent of the time. These efforts are successful, with a RealPage
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`employee explaining that as many as 90 percent (and at least 80 percent) of prices are
`adopted by participating Lessors without any deviation. As one Lessor explains,
`while “we are all technically competitors,” RealPage “helps us work together,” “to
`work with a community in pricing strategies, not to work separately.”
`Second, RealPage allows participating Lessors to coordinate supply
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`levels to avoid price competition. In a competitive market, there are periods where
`supply exceeds demand, and that in turn puts downward pressure on market prices as
`firms compete to attract lessees. To avoid the consequences of lawful competition,
`RealPage provides Lessors with information sufficient to “stagger” lease renewals to
`avoid oversupply. Lessors thus held vacant rental units unoccupied for periods of
`time (rejecting the historical adage to keep the “heads in the beds”) to ensure that,
`collectively, there is not one period in which the market faces an oversupply of
`residential real estate properties for lease, keeping prices higher.
`By staggering lease renewals to artificially smooth out natural
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`imbalances of supply and demand, RealPage and participating Lessors also eliminate
`any incentive to undercut or cheat on the cartel (avoiding a race to the bottom, or
`“prisoner’s dilemma”). This is a central mantra of RealPage, to sacrifice “physical”
`occupancy (i.e., to decrease output) in exchange for “economic” occupancy, a
`manufactured term RealPage uses to refer to increasing prices and decreasing
`occupancy (output) in the market.
`10. RealPage’s and participating Lessors’ coordinated efforts have been
`effective at driving anticompetitive outcomes: higher prices and lower occupancy
`(output). RealPage brags that participating Lessors experience “[r]ental rate
`improvements, year over year, between 5% and 12% in every market.” One Lessor
`said that the net effect of raising rents and “pushing people out” of the residential real
`estate leases they could no longer afford, was “10 million in income.” As discussed
`below, RealPage and participating Lessors have accomplished this task even under
`market downturns such as the Covid-19 pandemic.
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`CLASS ACTION COMPLAINT
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`11. This misconduct has hit the military community particularly hard. With
`respect to men and women on active duty, military bases often do not provide “on-
`post” housing, or have no available housing, requiring personnel to rent apartments.
`For instance, the Associated Press recently explained how the waitlist for “on-post”
`housing at Naval Base San Diego exceeds a year. Indeed, an estimated 63% of
`service members live in “off-post” private housing. While the Department of Defense
`provides a monthly basic allowance for housing, it is often insufficient to cover the
`costs of “off-post” housing. Kate Needham, a veteran who co-founded the nonprofit
`Armed Forces Housing Advocates in May 2021, explained: “We have families
`coming to us that are on exorbitantly lengthy waiting lists and sitting in homes that
`they can’t afford.” Many veterans depend upon residential leases for their housing,
`often spending over half of household income on rent. Rising rents increase levels
`of homelessness. Approximately a quarter of the nation’s homeless veterans live in
`California, and many of them reside in San Diego. Nearly one in ten homeless
`individuals in San Diego served in the military.
`12. RealPage is proud of its role in the exploding increase in the prices of
`residential leases. In a marketing video used to attract additional Lessors to the
`conspiracy, a RealPage Vice President discussed the recent and never-before seen
`price increases for residential real estate leases, as high as 14.5% in some markets.
`When another RealPage executive asks: “What role has the [RealPage] software
`played” in those increases, the RealPage Vice President responded: “I think it’s
`driving it, quite honestly.”
`13. The conspiracy Plaintiffs challenge is unlawful under Section 1 of the
`Sherman Act. Plaintiffs bring this action to recover their damages, trebled, as well as
`injunctive and other appropriate relief, detailed infra, on behalf of all others similarly
`situated.
`
`4
`CLASS ACTION COMPLAINT
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`PARTIES AND UNNAMED CO-CONSPIRATORS
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`14. Plaintiff Sherry Bason is a citizen and resident of the State of California.
`Ms. Bason rented a multifamily residential unit in a property managed by Lessor
`Defendant Greystar in San Diego, California beginning in 2018 through the present.
`Ms. Bason has paid higher rental prices by reason of the violation alleged herein.
`15. Plaintiff Lois Winn is a citizen and resident of the State of California.
`Ms. Winn rented a multifamily residential unit in a property managed by Lessor
`Defendant Greystar Real Estate Partners, LLC (“Greystar”) in San Francisco,
`California beginning in approximately May 2021 until April 2022. Ms. Winn has
`paid higher rental prices of the violation alleged herein.
`16. Plaintiff Georges Emmanuel Njong Diboki is a citizen and resident of
`the State of California. Mr. Diboki rented a multifamily residential unit in a property
`managed by Lessor Defendant Greystar in San Francisco, California beginning in
`approximately May 2021 until April 2022. Mr. Diboki has paid higher rental prices
`by reason of the violation alleged herein.
`17. Plaintiff Julia Sims is a citizen and resident of the State of Washington.
`Ms. Sims rented a multifamily residential unit in a property managed by Lessor
`Defendant Greystar in Redmond, Washington beginning in 2017 through the present.
`Ms. Sims has paid higher rental prices by reason of the violation alleged herein.
`18. Plaintiff Sophia Woodland is a citizen and resident of the State of
`Washington. Ms. Woodland rented a multifamily residential unit in a property
`managed by Lessor Defendant Security Properties Residential
`in Everett,
`Washington beginning in approximately September 2022 through the present. Ms.
`Woodland has paid higher rental prices by reason of the violation alleged herein.
`19. Defendant RealPage, Inc. is a Delaware corporation headquartered in
`Richardson, Texas. RealPage was a public company from 2010 until December
`2020, when it was purchased by private equity firm Thoma Bravo in a transaction
`that valued RealPage at approximately $10.2 billion. RealPage provides software
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`and services to the residential real estate industry, including the RMS described
`herein. RealPage has thousands of employees and earns over a billion dollars per
`year in revenue. As of December 31, 2019, RealPage had over 29,800 clients,
`including each of the ten largest multifamily property management companies in the
`U.S.
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`20. Lessor Defendant Greystar Real Estate Partners, LLC (“Greystar”) is a
`Delaware limited liability corporation headquartered in Charleston, South Carolina.
`It is the largest manager of multifamily rental real estate in the United States, with
`more than 782,900 multifamily units and student beds under management nationally.
`On information and belief, Greystar earns billions of dollars per year in revenue,
`controls $35.5 billion dollars in assets, and employs over 20,000 people.
`21. Lessor Defendant Lincoln Property Co. (“Lincoln”) is a Texas
`corporation headquartered in Dallas, Texas. Lincoln is the second largest manager
`of multifamily rental real estate in the United States, with over 210,000 multifamily
`units under management nationally. On information and belief, Lincoln earns
`billions of dollars per year in revenue and employs thousands of people.
`22. Lessor Defendant FPI Management, Inc. (“FPI”) is a California
`corporation headquartered in Folsom, California. FPI is the fifth largest manager of
`multifamily rental real estate in the United States, with over 150,000 multifamily
`units under management in 17 states. On information and belief, FPI earns billions
`of dollars per year in revenue and employs thousands of people.
`Inc.
`23. Lessor Defendant Mid-America Apartment Communities,
`(“MAA”) is a Tennessee corporation headquartered in Germantown, Tennessee.
`MAA is the tenth largest manager of multifamily rental real estate in the United
`States, with over 100,000 multifamily units under management in 16 states. On
`information and belief, MAA earns over one billion dollars per year in revenue and
`employs over 2,400 people.
`
`6
`CLASS ACTION COMPLAINT
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`24. Lessor Defendant Avenue5 Residential, LLC (“Avenue5”) is a
`Delaware limited liability company headquartered in Seattle, Washington. Avenue5
`is the twelfth largest manager of multifamily rental real estate in the United States,
`with over 96,900 multifamily units under management in 12 states. On information
`and belief, Avenue5 earns over $500 million dollars per year in revenue and employs
`over one thousand people.
`25. Lessor Defendant Equity Residential (“Equity”) is a Maryland real
`estate investment trust headquartered in Chicago, Illinois. Equity is the sixteenth
`largest manager of multifamily rental real estate in the United States, with over
`80,000 units under management in eight states. On information and belief, Equity
`earns over 2 billion dollars per year in revenue and employs over 2,000 people.
`26. Lessor Defendant Essex Property Trust, Inc (“Essex”) is a Maryland
`corporation headquartered in San Mateo, California. Equity is the twenty-fourth
`largest manager of multifamily rental real estate in the United States, with over
`61,000 units under management in California and Washington. On information and
`belief, Essex earns over 1.4 billion dollars per year in revenue and employs over
`1,700 people.
`27. Lessor Defendant Thrive Communities Management, LLC (“Thrive”) is
`a Washington Limited Liability Company headquartered in Seattle, Washington.
`Thrive has over 18,000 units under management in the greater Pacific Northwest. On
`information and belief, Thrive earns millions of dollars per year in revenue and
`employs over 500 people.
`28. Lessor Defendant Security Properties Inc. (“Security Properties”) is a
`Washington corporation headquartered in Seattle, Washington. Security Properties
`has over 22,000 units under management in eighteen states. On information and
`belief, Security Properties earns millions of dollars per year in revenue.
`29. The Lessor Co-Conspirators are various persons and entities, including
`Lessors, known and unknown to Plaintiffs and not named as defendants in this action,
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`who have participated as co-conspirators with RealPage and the Lessor Defendants
`in the offenses alleged and have performed acts and made statements in furtherance
`of the conspiracy
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`JURISDICTION AND VENUE
`30. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331
`and 1337, as this action arises out of Section 1 of the Sherman Antitrust Act (15
`U.S.C. § 1) and Sections 4 and 16 of the Clayton Antitrust Act (15 U.S.C. §§ 15 and
`26).
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`31. This Court has personal jurisdiction over Defendants under Section 12
`of the Clayton Act (15 U.S.C. § 22), Federal Rule of Civil Procedure 4(h)(1)(A), and
`Washington’s long-arm statute, the Revised Code of Washington § 4.28.185.
`through
`their divisions, subsidiaries,
`32. Defendants, directly or
`predecessors, agents, or affiliates, may be found in and transact business in the forum
`state, including the sale of multifamily residential real estate leases.
`through
`their divisions, subsidiaries,
`33. Defendants, directly or
`predecessors, agents, or affiliates, engage in interstate commerce in the sale of
`multifamily residential real estate leases.
`34. Venue is proper in this District pursuant to Section 12 of the Clayton
`Act (15 U.S.C. § 22) and the federal venue statute (28 U.S.C. § 1391), because one
`or more Defendants maintain business facilities, have agents, transact business, and
`are otherwise found within this District and certain unlawful acts alleged herein were
`performed and had effects within this District.
`FACTUAL BACKGROUND
`The Market for Multifamily Residential Real Estate Leases
`35. The relevant product market is the market for the lease of multifamily
`residential real estate and the relevant geographic market is the United States.
`36. From the perspective of the consumer, multifamily rental apartment
`units are not an economic substitute for with apartments, condominiums, or homes
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`for purchase because, among other reasons, purchase of real estate requires the ability
`to make a substantial down payment and to obtain financing.
`37. Additionally, from the perspective of the consumer, single-family real
`estate is not an economic substitute for multifamily residential real estate. For
`example, single-family properties typically do not offer amenities and security.
`Indeed, industry participants in the multifamily residential real estate market typically
`distinguish between multifamily and single-family real estate when discussing
`customer preferences and market trends, including concerning their disparate
`respective pricing.
`38. The multifamily residential real estate lease market satisfies the test for
`market definition used by federal antitrust enforcement agencies, widely known as
`the “SSNIP test.” The test asks whether a hypothetical monopolist in a proffered
`market could profitably impose a small but significant (typically 5%), non-transitory
`increase in price (a “SSNIP”), without causing a sufficient number of customers to
`switch to other products or services such that the SSNIP would be unprofitable to the
`monopolist. If the SSNIP is profitable, the market is properly defined. If the SSNIP
`is not profitable, the market is too narrowly defined, and does not encompass
`sufficient economic substitutes.
`39. Here, the SSNIP test is satisfied, and the market is properly defined. As
`described above and below, pursuant to the Lessors’ agreement not to compete on
`price, Lessors are able to increase “year over year, between 5% and 12% in every
`market,” yet those increases have not driven enough renters out of the market such
`that the SSNIP has become unprofitable to Lessors.
`Historical Pricing in the Market for Multifamily Residential Real Estate Leases
`40. Before RealPage facilitated collusion among Lessors, Lessors acting
`independently followed a policy to keep “heads in the beds.” In simplest terms, this
`meant the market was functioning competitively. Lessors, concerned that every day
`a property remained unrented was a lost opportunity to earn revenue for that day,
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`offered sufficiently attractive pricing to maintain maximum “physical occupancy”
`across their units. This could come in the form of reduced prices—often termed
`concessions—such as “first month free.”
`41. The “heads in the beds” strategy also minimized turnover expenses, as
`there were hard costs associated with finding and evaluating a replacement tenant as
`well as lost revenue opportunities if the unit sat vacant between tenants.
`42. One industry participant described the market before RealPage’s
`arrival, stating that a “generation” of Lessors “grew up worshipping the occupancy
`gods. We learned that if you were not 95 percent-plus occupied, the asset was
`failing.”
`43. Lessors accomplished their goals of “worshipping the occupancy gods”
`and “keeping heads in the beds” through “manual pricing,” that is, uncoordinated,
`independent pricing. This led Lessors to maximize occupancy (output) by offering
`sufficiently low pricing to attract tenants to sign or renew existing leases. This is
`referred to as a market share over price strategy, and it is a common defining
`characteristic of a market that is functioning competitively.
`The Lessor Defendants’ Outsource Price and Supply Decisions to a Common
`Decision Maker—RealPage—Which Eliminated Competition
`
`44. Following RealPage’s entry, RealPage’s participating Lessors swiftly,
`and concertedly, shifted from the previous competitive market share over price
`strategy to a new collusive price over volume strategy. Price over volume is a
`hallmark of pricing in a cartelized market.
`45. RealPage and participating Lessors have adopted a philosophy of
`economic occupancy, which is a term RealPage uses to refer to the practice of
`increasing prices notwithstanding market conditions and tolerating any reduced
`physical occupancy that might engender. Since Lessors of residential multifamily
`real estate properties (a finite resource) face a natural prisoner’s dilemma,
`maximizing economic occupancy is only in a firm’s economic self-interest if many
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`Lessors collectively follow suit. As one industry executive explained, while all
`Lessors “would be better off limiting their rent reductions [discounts],” if any Lessor
`“lower[ed] their rents while the others don’t, than that [Lessor] would outperform.”
`The easiest way to solve the prisoner’s dilemma, such that it would be profit
`maximizing to maintain high prices, would be if Lessors had mutual assurances that
`other Lessors would not compete with them on price.
`46. RealPage and participating Lessors have provided one another with
`such mutual assurances, agreeing among themselves not to compete on price for the
`sale of multifamily residential real estate leases. They have effectuated their
`agreement through two mutually reinforcing mechanisms. First, participating
`Lessors have agreed to set prices using RealPage’s coordinated algorithmic pricing.
`Second, participating Lessors have agreed to stagger their lease renewal dates
`through RealPage, to avoid (otherwise natural) oversupplies in rental properties.
`47. RealPage’s coordinated algorithmic pricing allows participating
`Lessors, in RealPage’s words, to “outsource [their] daily pricing and ongoing
`revenue oversight” to RealPage, with RealPage pricing participating Lessors’
`“properties as if we [RealPage] own them ourselves”—that is, as if RealPage and its
`participating Lessors were operating as a monopolist.
`48. Participating Lessors agree to adhere to RealPage’s coordinated
`algorithmic pricing, often referring to such adherence as pricing “courage” or more
`frequently, pricing “discipline.”
`49. Participating Lessors also agree to provide RealPage with real-time
`access to their competitively sensitive and nonpublic data on their multifamily
`residential real estate leases.
`50. This data, according to RealPage, spans over “16 million units,” which
`is a “very large chunk of the total inventory in the country.” RealPage standardizes
`this data to account for differences in the characteristics or “class” of the property in
`question. RealPage then runs this massive dataset through its pricing algorithm,
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`whereby RealPage sets prices for participating Lessors through application of a
`common formula to a common dataset.
`51. Specifically, every morning, RealPage provides participating Lessors
`with recommended price levels. Lessors typically must communicate to a RealPage
`“Pricing Advisor” that they have “accept[ed]” or “confirm[ed] the “approved
`pricing” within a specified time frame. If Lessors wish to diverge from the “approved
`pricing” they must submit reasoning for doing so and await approval. RealPage
`encourages participating Lessors to have daily calls between the Lessors’ employees
`with pricing responsibility and the RealPage Pricing Advisor.
`If there is a disagreement between the participating Lessor and the
`52.
`RealPage Pricing Advisor, the dispute is often elevated to the Lessor’s management
`for resolution, and specific reasons justifying a departure from RealPage’s pricing
`level are usually required. But RealPage emphasizes the need for discipline among
`participating Lessors and urges them that for its coordinated algorithmic pricing to
`be the most successful in increasing rents, participating Lessors must adopt
`RealPage’s pricing at least 80% of the time. As one example of such encouragement,
`Jeffrey Roper, RealPage’s main architect, publicly described the problem as: “If you
`have idiots undervaluing [setting prices independently], it costs the whole system.”
`53. A RealPage employee reported that these instructions are successful,
`with as many as 90% (and at least 80%) of RealPage pricing being adopted. As one
`Lessor explained, RealPage’s coordinated algorithmic pricing
`required
`counterintuitive changes in their business practices “because[, upon adopting
`RealPage’s coordination of pricing,] we weren’t offering concessions nor were we
`able to negotiate pricing” like they previously had. That Lessor went on to explain
`that RealPage “maximize[s] rents but you have to be willing to strictly follow it,”
`and, as a result, “we rarely make any overrides to the recommendations” provided
`by RealPage. Another Lessor described RealPage as bringing “discipline” and
`“courage to pricing.”
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`54. Using software it designed, applied to the dataset participating Lessors
`agreed to provide it, RealPage also allows participating Lessors to stagger their lease
`renewals to avoid natural periods of oversupply that would persist absent concerted
`action by would-be rival Lessors.
` One Lessor explained that, using RealPage, Lessors are “now able to
`55.
`stagger lease expirations throughout the month, effectively cutting down on
`frictional vacancy loss as well as concessions” on price. That Lessor continued that
`by staggering lease renewals, Lessors have “leveled the lease expirations throughout
`the year to better match the historical demand for each community, thus positioning
`us [Lessors] for even higher rent growth.”
`56. Lessors have publicly admitted that RealPage has allowed them to
`maintain higher prices in concert, with confidence that they can avoid price cutting
`and the prisoner’s dilemma.
`57. This same Lessor commented that while “we [Lessors] are all
`technically competitors,” that Lessors’ common adoption of and adherence to
`RealPage’s software “helps us [Lessors] work together,” “to work with a community
`in pricing strategies, not to work separately.”
`58. Other Lessors’ comments echo the potency and efficacy of their
`concerted action.
`59. Another Lessor reported that RealPage “has given a substantial boost
`to economic occupancy” (the proportion of gross potential rent actually realized vs.
`physical occupancy, the proportion of units occupied by tenants), which is to say it
`caused higher prices and less output.
`60. Another Lessor explained that by “outsourcing” pricing functions to
`RealPage, prices are set by RealPage’s “multifamily experts,” “who essentially act
`like an extension of our team.”
`61. And another explained that in following the price over volume, or
`economic capacity, strategy, they found “that driving our turnover rate up actually
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`captured additional revenue.” The Lessor continued: “The net effect of driving
`revenue and pushing people out was $10 million in income.” And the Lessor
`concluded, “I think that shows that keeping the heads in the beds above all else is
`not always the best strategy.” But given the prisoner’s dilemma faced by Lessors,
`rejecting that competitive strategy is only in a Lessor’s economic self-interest if they
`have assurances that they will not be significantly undercut by a rival. RealPage
`provides a mechanism through which Lessors reach a common understanding,
`coordinate their prices, and effectuate that understanding.
`The Lessor Defendants and RealPage Have Inflated the Prices and Reduced
`the Occupancy (i.e., Output) of Residential Real Estate Leases
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`62. As industry participants including RealPage’s own executives admit,
`RealPage’s coordinated algorithmic pricing has caused anticompetitive effects in the
`form of higher prices and reduced output, with a RealPage executive conceding: “I
`think it’s [RealPage’s coordinated algorithmic pricing is] driving it [higher prices for
`residential real estate leases], quite honestly.”
`63. RealPage advertises that the Lessors that participate in this cartel
`experience “[r]ental rate improvements, year over year, between 5% to 12% in every
`market,” the ability to “outperform the market by up to 5%,” and “drive up to an
`additional 150-200 basis points of hidden yield” that