UNITED STATES DISTRICT COURT
`MIDDLE DISTRICT OF TENNESSEE
`NASHVILLE DIVISION
`
`Case No. 3:23-md-03071
`MDL No. 3071
`
`Chief Judge Waverly D. Crenshaw, Jr.
`
`JURY TRIAL DEMANDED
`
`JASON GOLDMAN; JEFFREY WEAVER;
`BILLIE JO WHITE; NANCY ALEXANDER;
`BRANDON WATTERS; PRISCILLA
`PARKER and PATRICK PARKER; BARRY
`AMAR-HOOVER; JOSHUA KABISCH;
`MEGHAN CHERRY; SELENA VINCIN; and
`MAYA HAYNES, Individually and on Behalf
`of All Others Similarly Situated,
`
`Plaintiffs,
`
`v .
`
`REALPAGE, INC.; THOMA BRAVO FUND
`XIII, L.P.; THOMA BRAVO FUND XIV, L.P.;
`THOMA BRAVO L.P.; APARTMENT
`INCOME REIT CORP., d/b/a AIR
`COMMUNITIES; ALLIED ORION GROUP,
`LLC; APARTMENT MANAGEMENT
`CONSULTANTS, LLC; AVENUE5
`RESIDENTIAL, LLC; BELL PARTNERS,
`INC.; BH MANAGEMENT SERVICES, LLC;
`BOZZUTO MANAGEMENT COMPANY;
`BROOKFIELD PROPERTIES
`MULTIFAMILY LLC; CAMDEN PROPERTY
`TRUST; CH REAL ESTATE SERVICES, LLC;
`CONAM MANAGEMENT CORPORATION;
`CONTI TEXAS ORGANIZATION, INC.
`D/B/A CONTI CAPITAL; CORTLAND
`MANAGEMENT, LLC; CWS APARTMENT
`HOMES LLC; DAYRISE RESIDENTIAL,
`LLC; ECI GROUP, INC.; EQUITY
`RESIDENTIAL; ESSEX PROPERTY TRUST,
`INC.; FIRST COMMUNITIES
`MANAGEMENT, INC.; FPI MANAGEMENT,
`INC.; GREYSTAR MANAGEMENT
`SERVICES, LLC; HIGHMARK
`RESIDENTIAL, LLC; INDEPENDENCE
`REALTY TRUST, INC.; KAIROI
`MANAGEMENT, LLC; KNIGHTVEST
`RESIDENTIAL; LANTOWER LUXURY
`LIVING, LLC; LINCOLN PROPERTY
`
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`
`

`

`COMPANY; MID-AMERICA
`COMMUNITIES, INC.; MID-AMERICA
`APARTMENTS, L.P.; MISSION ROCK
`RESIDENTIAL, LLC; MORGAN
`PROPERTIES MANAGEMENT COMPANY,
`LLC; PINNACLE PROPERTY
`MANAGEMENT SERVICES, LLC;
`PROMETHEUS REAL ESTATE GROUP,
`INC.; THE RELATED COMPANIES, L.P.;
`RELATED MANAGEMENT COMPANY L.P.;
`ROSE ASSOCIATES, INC.; RPM LIVING,
`LLC; SARES REGIS GROUP COMMERCIAL,
`INC.; SECURITY PROPERTIES
`RESIDENTIAL, LLC; SHERMAN
`ASSOCIATES, INC.; SIMPSON PROPERTY
`GROUP, LLC; THRIVE COMMUNITIES
`MANAGEMENT, LLC; CROW HOLDINGS,
`LP; TRAMMELL CROW RESIDENTIAL
`COMPANY; UDR, INC.; WINDSOR
`PROPERTY MANAGEMENT COMPANY;
`WINNCOMPANIES LLC;
`WINNRESIDENTIAL MANAGER CORP.;
`AND ZRS MANAGEMENT, LLC.
`
`Defendants.
`
`SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT
`
`Plaintiffs Jason Goldman, Jeffrey Weaver, Billie Jo White, Nancy Alexander, Brandon
`
`Watters, Priscilla Parker and Patrick Parker, Barry Amar-Hoover, Joshua Kabisch, Meghan
`
`Cherry, Selena Vincin, and Maya Haynes, individually and on behalf of all others similarly situated
`
`(the “Class,” as defined below), upon personal knowledge as to the facts pertaining to themselves
`
`and upon information and belief as to all other matters, and upon the investigation of counsel,
`
`bring this class action complaint to recover treble damages, injunctive relief, and other relief as
`
`appropriate, based on violations of federal antitrust laws and state laws against Defendants
`
`RealPage, Inc., Thoma Bravo Fund XIII, L.P., Thoma Bravo Fund XIV, L.P., and Thoma Bravo
`
`2
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`

`

`L.P. (collectively, “RealPage”); Apartment Management Consultants, LLC; Avenue5 Residential,
`
`LLC; Bozzuto Management Company; First Communities Management, Inc.; FPI Management,
`
`Inc.; Highmark Residential, LLC; Mission Rock Residential, LLC; Thrive Communities
`
`Management, LLC; and ZRS Management, LLC (collectively the “Managing Defendants”);
`
`Apartment Income REIT Corp., d/b/a Air Communities; Allied Orion Group, LLC; Bell Partners,
`
`Inc.; BH Management Services, LLC; Brookfield Properties Multifamily LLC; Camden Property
`
`Trust; CH Real Estate Services, LLC; CONAM Management Corporation; Cortland Management,
`
`LLC; CWS Apartment Homes LLC; Dayrise Residential, LLC; ECI Group, Inc.; Equity
`
`Residential; Essex Property Trust, Inc.; Greystar Management Services, LLC; Independence
`
`Realty Trust, Inc.; Kairoi Management, LLC; Knightvest Residential; Lantower Luxury Living,
`
`LLC; Lincoln Property Company; Mid-America Communities, Inc., and Mid-America
`
`Apartments, L.P.; Morgan Properties Management Company, LLC; Pinnacle Property
`
`Management Services, LLC; Prometheus Real Estate Group, Inc.; The Related Companies, L.P.;
`
`Related Management Company L.P.; Rose Associates, Inc.; RPM Living, LLC; Sares Regis Group
`
`Commercial, Inc.; Security Properties Residential, LLC; Sherman Associates, Inc.; Simpson
`
`Property Group, LLC; UDR, Inc.; Windsor Property Management Company; WinnCompanies
`
`LLC; and WinnResidential Manager Corp. (collectively, “Owner-Operators”); and CONTI Texas
`
`Organization, Inc., d/b/a CONTI Capital; Crow Holdings, LP; and Trammell Crow Residential
`
`Company (collectively “Owners”).
`
`I.
`
`INTRODUCTION
`
`1.
`
`From at least January 2016, through the present (the “Conspiracy Period”),
`
`Defendants engaged in a nationwide conspiracy to fix and inflate the price of multifamily rental
`
`housing across the country. Leveraging their control of the multifamily rental housing market from
`
`at least January 2016, Defendants conspired to limit supply and raise multifamily rental housing
`
`3
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`
`

`

`prices, causing substantial damages to Plaintiffs and other members of the Class whose ability to
`
`obtain affordable housing depended on getting competitive prices for the units they rented. Several
`
`witness accounts, including 12 discussed herein, rental price and occupancy data, economic
`
`evidence, and public investigations,1 confirm the anticompetitive conduct taken pursuant to this
`
`agreement.
`
`2.
`
`Defendants are RealPage, the developer of an integrated technology platform that
`
`provides software solutions for the multifamily rental housing markets, including revenue
`
`management software solutions—a category which includes RealPage products “RealPage
`
`Revenue Management,” Lease Rent Options (“LRO”), YieldStar, and AI Revenue Management
`
`(“AIRM”)—and several owners and managers of large-scale multifamily residential apartment
`
`buildings that used RealPage’s Revenue Management Solutions2 to coordinate and agree upon
`
`rental housing pricing and supply.
`
`3.
`
`Although the Owner Defendants operate strictly as the owners of the multifamily
`
`residential properties that used RealPage’s RMS, the majority of defendants in this action are
`
`Owner-Operators—meaning they operate as both owners and operators of multifamily residential
`
`properties. There are also several Managing Defendants that operate strictly in the role of property
`
`managers for the properties utilizing RealPage’s RMS to price their multifamily units. The
`
`Managing Defendants act as agents for the property owners and knowingly used RMS to
`
`coordinate and agree upon rental housing and supply. (Discussed in ¶¶ 196-98, infra.).
`
`1 Heather Vogell, Rent Going Up? One Company’s Algorithm Could Be Why., PROPUBLICA (Oct.
`15, 2022), https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent (ProPublica
`report shedding light on Defendants’ conspiracy and showing that rents in areas where RealPage
`clients control a higher percentage of rental units have increased at a significantly higher rate).
`Unless otherwise indicated, all internet citations were last visited on September 6, 2023.
`2 RealPage’s revenue management software solutions, including RealPage Revenue Management,
`LRO, YieldStar, and AI Revenue Management, will be referred to collectively herein as “Revenue
`Management Solutions” or “RMS.”
`
`4
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`

`

`4.
`
`What RealPage RMS offered seemed too good to be true: software that would use
`
`a database of rental prices in the area (including competitors’ prices) and provide the optimal price
`
`to charge prospective tenants, with both short-and-long-term goals of increasing revenues by
`
`raising rents. This aim was transparent to all. RealPage, as the developer of RMS, was not shy
`
`about its intent to create coordination amongst RMS users. Defendant RealPage acknowledged
`
`this in public statements, advertisement material, and repeated statements made to the multifamily
`
`rental industry emphasizing that its RMS used non-public data from other RealPage clients. In
`
`fact, RealPage touted its use of non-public data as a competitive differentiator from other revenue
`
`management service providers in its marketing material. RealPage publicly advertises that its RMS
`
`would help multifamily owners and operators raise rents and “outperform the market.”3
`
`5.
`
`Use of RealPage’s RMS was conditioned on contributing non-public, competitively
`
`sensitive data to RealPage’s data pool. That was the bargain on offer—to access this price-setting
`
`tool that promised revenue growth even in a down market, every member (including the Owners,
`
`Owner-Operators, and Managing Defendants) agreed to participate in the data co-operative and
`
`price their multifamily rental units according to RealPage’s RMS. As RealPage recognized,
`
`“because certain solutions we provide depend on access to client data,” “decreased access to this
`
`data . . . could harm our business.”4 Indeed, RealPage coordinates meetings between property
`
`managers and owners of multifamily rental properties so that they can discuss their use of
`
`RealPage’s RMS platform. While discovery will reveal to what extent Owner Defendants were
`
`involved in the day-to-day disclosures for their respective properties, witness interviews confirm
`
`3 YieldStar Predicts Market Impact Down to Unit Type and Street Location, REALPAGE, INC.,
`https://www.realpage.com/videos/yieldstar-data-scientists-help-manage-supply-demand/.
`4
`RealPage
`Inc.,
`2020
`Annual
`Report
`(Form
`10-K)
`at
`https://www.sec.gov/Archives/edgar/data/1286225/000128622521000007/rp-20201231.htm
`(“RealPage 2020 Form 10-K”).
`
`32,
`
`5
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`

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`that ultimately the decision whether to use RealPage’s RMS rested on the desires of the ownership
`
`group.
`
`6.
`
`By using RealPage’s RMS, each Owner, Owner-Operator, and Managing
`
`Defendant5 agreed with the overarching principles of the cartel: that (1) all members, who were
`
`otherwise horizontal competitors, would share the proprietary data necessary for RealPage’s RMS
`
`to generate rental price recommendations; (2) all members would delegate their rental price and
`
`supply decisions to a common decision maker, RealPage; and (3) knowing that cooperation was
`
`essential to the successful operation of the scheme, all members would abide by RealPage’s price
`
`and supply decisions generated by RMS.
`
`7.
`
`As RealPage put it, it offered clients the ability to “outsource daily pricing and
`
`ongoing revenue oversight”6 to RealPage, allowing Defendant RealPage to set prices for its clients’
`
`properties “as though we [RealPage] own them ourselves.”7 RealPage’s CEO confirmed that the
`
`purpose of its revenue management software is to “set rents” for its clients, including the Owners,
`
`Owner-Operators, and Managing Defendants named in this litigation.8 Defendant Camden
`
`Property Trust (“Camden”) confirmed that once RealPage’s RMS is engaged, there is not much to
`
`do beyond checking the software to ensure that it is continuing to push prices higher.9
`
`5 See definitions at ¶¶ 195-97, infra. See also Appendix A, attached hereto, listing Defendants in
`each category (Table A-1: Managing Defendants; Table A-2: Owner-Operators; Table A-3:
`Owners).
`6 Press Release, RealPage, Inc., YieldStar Offers Revenue Advisory Services to Multifamily
`Owners and Managers (Mar. 1, 2010), https://www.realpage.com/news/yieldstar-offers-revenue-
`advisory-services-to-multifamily-owners-and-managers/.
`7 RealPage Renewal Reporting Presentation, MEDVE, https://medve.com/assets/airm-renewal-
`reporting.pdf
`8 RealPage Inc. at William Blair Growth Stock Conference (June 11, 2020) (Stephen T. Winn,
`Chairman & CEO, RealPage: “We set rents using a revenue management system.”).
`9
`RealPage,
`RealPage
`Live
`at
`NMHC:
`James
`Flick
`of
`Camden,
`https://www.realpage.com/videos/facebook-live-nmhc-james-flick-camden/ (video at 3:05).
`
`6
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`

`

`8.
`
`In the words of the Supreme Court in Interstate Circuit, Inc. v. United States, “[i]t
`
`is elementary that an unlawful conspiracy may be and often is formed without simultaneous action
`
`or agreement on the part of the conspirators. Acceptance by competitors, without previous
`
`agreement, of an invitation to participate in a plan, the necessary consequence of which, if carried
`
`out, is restraint of interstate commerce, is sufficient to establish an unlawful conspiracy under the
`
`Sherman Act.” 306 U.S. 208 (1939) (cleaned up). Here, each Owner, Owner-Operator, and
`
`Managing Defendant knew that their competitors had accepted RealPage’s invitation to participate
`
`in the agreement to fix the price of multifamily rental units, regulate supply, and interfere with the
`
`free market across the United States through their receipt of marketing materials, participation in
`
`RealPage information sharing events, and knowledge of competitors using RealPage’s RMS—and
`
`with this information, Defendants accepted RealPage’s invitation to participate in the scheme.
`
`II.
`
`BACKGROUND
`
`9.
`
`Rather than function as separate economic entities, the Owners, Owner-Operators,
`
`and Managing Defendants agreed to make key competitive decisions regarding the price and
`
`supply of multifamily apartments, collectively. As Emily Mask, Associate Vice President of
`
`Revenue Management and Systems Support for Defendant ECI Group, Inc. (“ECI”) explained in
`
`2019, “[t]he design and functionality of [RealPage’s] LRO offers detailed insight into how actual
`
`competitors impact pricing strategies . . . With LRO we rarely make any overrides to the [pricing]
`
`recommendations . . . [W]e are all technically competitors, LRO helps us to work together . . . to
`
`make us all more successful in our pricing . . . LRO is designed to work with a community in
`
`pricing strategies, not work separately.”10 In a promotional video posted on RealPage’s website, a
`
`10 The RealPage e-book, PROVEN: B & C Assets Ace the Market with RealPage: How Two
`Companies Pushed Performance Over 3+% Above Market (2019) ( “RealPage e-book B & C
`Assets Ace the Market”) (detailing two case studies in which RealPage clients achieved revenue
`
`7
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`

`

`representative from Defendant BH Management Services, LLC (“BH”) explained that, while in a
`
`competitive market “there’s a tendency . . . to let your competitors drive your pricing,” RealPage’s
`
`RMS price-setting function “keeps you from subjectively adjusting to what the market is doing.”11
`
`Defendant BH’s Vice President of Business Intelligence Systems, Brandy Daniel, echoed this
`
`sentiment in a webcast hosted by RealPage in which BH participated, along with competitors from
`
`Defendants Cortland Management, LLC (“Cortland”), Pinnacle Property Management Services,
`
`L.P. (“Pinnacle”), and Independence Realty Trust, Inc. (“IRT”). In addition to BH’s Daniel,
`
`participants in the webcast included Connie Aldape, the Director of Revenue Management for
`
`Defendant Pinnacle, America Melragon, Defendant IRT’s former Vice President of Revenue
`
`Management, and Kelly Nichols, the Director of Revenue Management for Defendant Cortland.
`
`10. When asked how revenue management has allowed BH to “stay ahead of the market
`
`and avoid any sort of reactionary behaviors,” Ms. Daniel responded that for BH “being able to see
`
`[competitors’] transaction-level data has been really important to keeping decisions in line for each
`
`market. Our very first goal that we came out with immediately out of the gate is that we will not
`
`be the reason any particular submarket takes a rate dive. So for us our strategy was to hold steady
`
`and to keep an eye on the communities around us and our competitors.”12 In other words, despite
`
`the presence of market conditions that may warrant rental price adjustments in certain markets in
`
`growth and outperformed the market after adopting RealPage’s pricing recommendations.
`Defendant ECI Group achieved 5%-7% year-over-year revenue growth after adopting RealPage’s
`pricing recommendations and Defendant BH Management Services, LLC saw a 4.8%
`“outperformance to the market,” and 4% between its own properties using RealPage’s pricing
`recommendations against those that had not yet adopted RealPage pricing.
`11 Tim Blackwell, Six Ways Revenue Management Software Benefits B and C Properties, RealPage
`(June 12, 2019), https://www.realpage.com/blog/six-ways-revenue-management-software-
`benefits-b-c-properties/.
`12 Smart Solutions: How to Outperform in a Changing Market, REALPAGE VIDEOS (May 4, 2020),
`https://www.realpage.com/webcasts/smart-solutions-outperform-changing-market/
`(“Smart
`Solutions: How to Outperform in a Changing Market”).
`
`8
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`
`

`

`order to attract potential renters and/or retain existing tenants, if the RMS system showed
`
`competitors were remaining steady with their rental prices in those, and perhaps other markets,
`
`Defendant BH committed to pricing its own units according to its competitors’ pricing rather than
`
`true market conditions so as not to be the cause of any rental rate dips. Defendant BH made its
`
`commitment to the conspiracy between and amongst the Defendants known during this
`
`information-sharing session with competitors.
`
`11.
`
`The Owners, Owner-Operators, and Managing Defendants knew that their mutual
`
`access to the data available through their use of RealPage’s RMS allowed them to price their units
`
`according to their collective goal of securing revenue lifts by increasing rents without regard for
`
`the typical market forces that drive supply and demand in a competitive environment. Defendant
`
`Cortland’s Director of Revenue Management, Kelly Nichols, acknowledged this during the same
`
`webcast with her competitors and Defendants BH, Pinnacle, and IRT. Responding to the same
`
`question regarding how revenue management has allowed Cortland to “stay ahead of the market,”
`
`Ms. Nichols replied: “having access to the daily transaction level data at the floor plan level really
`
`has been key. Without having that, we may not have been able to keep our strategy as regular. We
`
`likely would have been focusing more on what’s going on in the market.” Imagine that. Defendant
`
`Pinnacle’s Director of Revenue Management, Connie Aldape, emphasized that of the lessons
`
`learned from the last economic downturn, “what really resonated with me is that our industry really
`
`learned the value of leveraging data to make better pricing decisions,” including what Aldape
`
`characterized as “less emotional” decisions.13
`
`12.
`
`Each Defendant knew that the plan, if carried out, would result in increased rents
`
`while restricting demand, and with this knowledge—each Owner, Owner-Operator, and Managing
`
`13 Id.
`
`9
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`

`

`Defendant participated in the plan. The Owner, Owner-Operators, and Managing Defendants all
`
`shared an interest in seeing that their competitors subscribed to RealPage’s RMS pricing. Witness
`
`interviews confirm that through RealPage’s RMS platform, the user was in fact able to ascertain
`
`the identity of competitors that were using RealPage’s RMS based on the address of the properties
`
`that were listed as comparables on the RMS platform. That is, if a property appeared on the
`
`platform and/or was listed as a comparable, that indicates to the user that, that property had
`
`similarly input their transactional data into RealPage’s RMS.
`
`13.
`
`Cartel members provide RealPage with vast amounts of their non-public
`
`proprietary data, including their lease transactions, rent prices, and occupancy and inventory
`
`levels. This commercially sensitive data is fed into a common data pool, along with additional data
`
`collected by Defendant RealPage’s other data-analytics, benchmarking, and rental-management
`
`software products. RealPage then trains its machine learning and artificial intelligence algorithms
`
`across that pool of proprietary data, generating rental prices daily for each RMS user’s available
`
`units, singularly focused on increasing revenues by raising rent. Defendants boast about their
`
`ability to increase revenue by way of increasing rents regardless of true market conditions,
`
`including economic downturns or an all-out recession. Indeed, RealPage emphasizes to clients and
`
`prospective clients that “there is always money to be made regardless of market conditions.”14
`
`14.
`
`For that price-setting function of RealPage, Owners, Owner-Operators, and
`
`Managing Defendants pay handsomely. RealPage charges a one-time licensing fee as well as a
`
`monthly per unit fee for its RMS, ranging from at least $1 to $2 per unit, with some RealPage
`
`clients paying even more. RealPage also charges thousands of dollars in various other ancillary
`
`14 Tim Blackwell, Revenue Management: Proven in Any Market Cycle: See How These Top
`Companies
`Outperformed
`During
`Downturns,
`REALPAGE
`E-BOOK,
`https://www.realpage.com/blog/revenue-management-proven-market-cycle-ebook/ ( “Revenue
`Management: Proven in Any Market Cycle”).
`
`10
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`
`

`

`fees, such as consulting fees and site-training fees, monthly Pricing Advisory Services fees (which
`
`are charged on a per unit basis and can double the per unit fee), and corporate training fees.
`
`Accounting for all these fees (and the large number of units each of the Defendants owns or
`
`manages, ranging from 5,000 to as many as 698,000 units, as discussed further below), Owners,
`
`Owner-Operators, and Managing Defendants collectively pay millions of dollars each year for
`
`RealPage’s RMS and associated services. Indeed, RealPage seeks to set the price for as many of
`
`its clients’ units as the client will allow, explaining that the more units and properties included in
`
`the RMS system, the better its algorithm can raise rent across all properties. RealPage also
`
`generally requires clients to enter into an agreement with a term of at least one year to use its
`
`services.
`
`15.
`
`Unsurprisingly, given the cost of use and promise of enormous financial gain, RMS
`
`users, including the Owners, Owner-Operators, and Managing Defendants agree to adopt RealPage
`
`RMS pricing up to 80%-90% of the time. Rents continued to rise while at the same time Defendants
`
`reported unprecedented earnings. During a recent 2023 earnings call with Defendant IRT, IRT
`
`proudly reported its extraordinary FFO (‘Funds from Operations’) per share growth, with over a
`
`106% cumulative growth compared as to five years prior. Scott Schaeffer, President, CEO and
`
`Chairman of IRT further explained “our key performance metrics in the second quarter include,
`
`average rental rate increased 7% year-over-year, supporting a 6.2% increase in revenue.”15 Still,
`
`despite this massive growth at the expense of renters, James Sebra, Defendant IRT’s CFO and
`
`15 Q2 2023 Independence Realty Trust Inc. Earnings Call – Final, yahoo!finance, July 27, 2023,
`https://finance.yahoo.com/news/q2-2023-independence-realty-trust-
`060808068.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guc
`e_referrer_sig=AQAAAIUMo3YTFurjnS6ofErOLbU9yLBT4oT08L7pbhdcBz9EwLdpogFmYv
`tSiXqn6Fxzd9_uDanws9d-MK5-cm5mwW3IyKCDyLoU-
`0OeFsVNahAvCqU2fgmKwEs_2uaWqoBGBuxEjaCz9dowUi4u8RXDkxifQkkNNsmLmNCfT
`LmtpdtC.
`
`11
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`

`

`Treasurer announced that IRT expected to see an average net effective rent growth of 4.2% across
`
`its properties in the second half of 2023.16
`
`16.
`
`Jeffrey Roper, RealPage’s main RMS architect, publicly described the dilemma that
`
`RealPage’s RMS solved as: “If you have idiots undervaluing, it costs the whole system.”17 To
`
`prevent their staff from exercising independent judgment when setting rents, Defendants have
`
`established a rigorous monitoring and compliance system to ensure cartel members adhere to
`
`RealPage’s RMS pricing.
`
`17.
`
`For example, Defendant RealPage assigns its clients “Pricing Advisors,” also called
`
`“Revenue Managers,”18 to monitor the client’s compliance with RMS pricing, and to disseminate
`
`confidential and commercially sensitive information provided to RealPage by the client’s
`
`competitors to encourage RMS price compliance. As RealPage put it to its clients, “[y]our Pricing
`
`Advisor is an extension of your team and empowered with the authority required for success.”19
`
`RealPage’s Senior Vice President of Revenue Management estimates that RealPage’s own Pricing
`
`16 Id.
`17 Vogell, supra, note 1.
`18 RealPage AI Revenue Management, REALPAGE, INC., https://www.realpage.com/asset-
`optimization/revenue-management/?utm_source=google&utm_medium=cpc&utm_campaign
`=Spear+-+HDDR+Revenue+Management+-+Search&utm_content=search&utm_adgroup
`=Revenue+Management&utm_device=c&utm_keyword=ai%20revenue%20management&
`gad=1&gclid=Cj0KCQjwmZejBhC_ARIsAGhCqndpmEtz_7CgdbVOuCLdRHSoZlU42vJD2ors
`4fYig6K9svH0xlSoJ9saAnadEALw_wcB
`(describing RealPage’s Revenue Management
`Advisory services as providing “expert oversight of [clients’] pricing strategy”). In a video posted
`on RealPage’s website titled “Best Practices for Revenue Management Webcast,” hosted by
`RealPage’s Chief Economist, Greg Willett, Tracy Paulk, who holds two titles at RealPage
`according to LinkedIn—VP Consumer Solutions and Revenue Management and VP, LRO
`Professional Services—explained “You’ll hear someone referred to as a revenue manager or
`pricing advisor, they’re the same thing.” Best Practices for Revenue Management Webcast,
`RealPage Videos, at (10:39-10:58), https://www.realpage.com/videos/best-practices-revenue-
`management-webcast/ ( “Best Practices Webcast”). Reference to “Pricing Advisors” herein refers
`to both Pricing Advisors and Revenue Managers.
`19
`23,
`(June
`INC.,
`AI Revenue Management, THE MEDVE GROUP,
`https://medve.com/assets/airm-manager-training-medve-management-6.23.2021-(1).pdf.
`
`2021),
`
`12
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`

`

`Advisors are used for approximately 60% of all units using RealPage’s RMS.20 While the majority
`
`of RealPage’s clients use RealPage’s Pricing Advisors, some of RealPage’s largest property
`
`management clients (like Defendants Pinnacle, BH, Essex Property Trust, Inc. (“Essex”), and
`
`RPM Living, LLC (“RPM”)) bring this same function in house, utilizing RealPage to train their
`
`own internal revenue managers to serve as in-house RMS pricing advisors.21 RealPage’s RMS
`
`generally understand that they must either use a RealPage Pricing Advisor or else train someone
`
`internally to take on that role.
`
`18.
`
`For RealPage RMS users, including the Owner-Operators and Managing
`
`Defendants, to diverge from RealPage’s RMS pricing requires approval from a RealPage Pricing
`
`Advisor or an internal RealPage-trained revenue manager, and often approval from senior
`
`management within the Owner-Operator and/or Managing Defendant organization, and even from
`
`Owner Defendants. Very few justifications are accepted for any requested deviation, and Owners,
`
`Owner-Operators, and Managing Defendants routinely reject deviations based on claims that
`
`RealPage’s prices were off-market or out-of-step with local property conditions. While RealPage
`
`claims that all pricing decisions are ultimately left to its clients, various witnesses confirm that, in
`
`their experience, no modifications can be made to RMS recommended pricing without prior
`
`approval from either RealPage or the Owners, Owner-Operators, and/or Managing Defendants’
`
`senior management. According to one former RealPage Pricing Advisor (“Witness 1”),22 at least
`
`some Pricing Advisors informed Owner-Operators and Managing Defendants’ employees that
`
`20 Smart Solutions: How to Outperform in a Changing Market, supra note 12.
`21 According to RealPage’s VP of Consumer Relations and Revenue Management, and VP of LRO
`Solutions, “often times when you hit that 20,000 units or more, you start to see the value [in hiring
`an internal revenue manager].” Best Practices Webcast, supra note 18 (17:40-18:53).
`22 Defendants and the Court were provided with the identities of certain witnesses named herein,
`at the time of the filing of Plaintiffs’ Amended Consolidated Complaint, Dkt. 291, and will submit
`herewith a supplemental disclosure identifying additional witnesses.
`
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`

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`they were without discretion to override RMS pricing and that they had to adhere to RMS prices.23
`
`As one leasing manager at a RealPage client (“Witness 2”)24 put it, “I knew [RealPage’s prices]
`
`were way too high, but [RealPage] barely budged [when I requested a deviation].” Likewise, a
`
`former leasing agent for Defendant Essex (“Witness 3”)25 indicated that during his tenure with the
`
`company, many tenants complained about Essex’s rental price increases and asked for concessions
`
`and recalled that “Essex was raising rents hella” during that time. Witness 3 indicated he worked
`
`at two Essex properties, both of which used YieldStar to price their multifamily units. However,
`
`he was also called into provide short-term leasing services for other Essex properties, all of which
`
`similarly used YieldStar for pricing.
`
`19.
`
`Aside from daily and weekly interactions, RealPage provides many of its RMS
`
`clients with quarterly one-on-one “Performance to Market” meetings, designed to identify how
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`compliant the client was with RealPage’s pricing recommendations during the prior quarter, and
`
`quantify any purported revenue loss that RealPage attributed to the client’s deviations from its
`
`pricing recommendations. A former RealPage executive (“Witness 4”)26 who was instrumental in
`
`the development of RealPage’s RMS confirmed that RealPage’s pricing recommendations were
`
`accepted at “very high rates.”
`
`23 Witness 1 worked as a RealPage Pricing Advisor from 2015 through 2018.
`24 Witness 2 worked as the Assistant Community Manager for Sunrise Management (now
`“CloudTen Residential”) from 2020 through August 2022, where she had regular, direct
`interactions with RealPage Pricing Advisors and was responsible for reviewing RealPage’s daily
`price recommendations for the properties she managed. Prior to that, Witness 2 worked as a leasing
`consultant for Defendant Greystar (October 2019 to June 2020), utilizing RealPage’s pricing
`platform. Witness 2 also worked as a leasing consultant with Defendant FPI Management, Inc.
`(“FPI Management”), however she did not use RealPage’s pricing platform at Defendant FPI
`Management as the building she worked at was classified as affordable housing.
`25 Witness 3 worked as a Leasing Agent for Defendant Essex from December 2017 through
`November 2019 in San Diego, California. Witness 3 utilized YieldStar on a daily basis in
`connection with his work as a Leasing Agent with Defendant Essex.
`26 Witness 4 is a data scientist and former innovation and marketing executive at RealPage, from
`2015 through 2019.
`
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`20.
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`Executives from Owner Defendants, Owner-Operators, and Managing Defendants’
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`companies placed pressure on their leasing managers to implement RealPage’s prices. For
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`example, Defendant Lincoln Property Company (“Lincoln”) forced leasing managers wishing to
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`deviate from RealPage’s prices to submit a request to the corporate office. A former Lincoln
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`Leasing Consultant in Nashville, Tennessee (“Witness 5”) recalls that these deviation requests
`
`were rejected almost 99% of the time, and that Lincoln’s corporate office would reiterate that
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`RealPage’s “rates are what they are.” Likewise, a former Leasing Professional for Cushman &
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`Wakefield, the parent company for Defendant Pinnacle (“Witness 6”) stated that she was unable
`
`to change or modify the rents set by YieldStar.27 When Witness 6 raised concerns about RealPage’s
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`RMS pricing, she was told by the property manager that there was “not much we can do” to change
`
`YieldStar’s pricing. A former RealPage Pricing