Firms accused by the Department of Justice of colluding to set rent prices have a large presence in Central Massachusetts.
3 hours ago
Three firms with 5,400+ Central Mass. apartments facing DOJ lawsuit over rent-fixing scheme
Photo | Matt Wright
The Worcester multi-family development Alta on the Row under construction
Some of the largest and most prominent Central Massachusetts apartment communities are managed by firms accused by the federal government of participating in a rent-fixing scheme.
More than 5,400 residential units in the region are managed and/or owned by firms named in a U.S. Department of Justice lawsuit alleging some of the nation’s largest multi-family property owners and managers coordinated to set rental prices.
Three firms added on Tuesday to a pre-existing Department of Justice lawsuit against Texas-based property management software firm RealPage manage and/or own a total of 5,439 units across 22 Central Massachusetts multy-family properties, including 621 units in Worcester, according to a WBJ review of property records on CoStar.
The amended complaint alleges the landlords colluded in an unlawful scheme to decrease competition among landlords in apartment pricing, including the sharing of competitively sensitive information like pricing strategies and the use of common pricing algorithms.
“While Americans across the country struggled to afford housing, the landlords named in today’s lawsuit shared sensitive information about rental prices and used algorithms to coordinate to keep the price of rent high,” Doha Mekki, acting assistant attorney general of the Justice Department’s Antitrust Division, said in a press release issued Tuesday. “Today’s action against RealPage and six major landlords seeks to end their practice of putting profits over people and make housing more affordable for millions of people across the country.”
South Carolina-based Greystar Real Estate Partners, one of the defendants named in the amended complaint, manages 2,716 apartment units in Central Massachusetts, including the 370-unit Alta on the Row in Worcester and the 332-unit Stone Gate Apartments in Marlborough.
Greystar owns three apartment properties in the region: The Retreat at Marlborough, a 274-unit complex, as well Avana Marlborough and Avenu at Natick, two complexes with 164 units each.
Greystar said in a statement posted to its website it denies wrongdoing and will vigorously defend itself.
“We are disappointed that the DOJ added us and other operators to their lawsuit against RealPage,” the statement reads. “Greystar has and will conduct its business with the utmost integrity. At no time did Greystar engage in any anti-competitive practices.”
Another defendant, Dallas-based Willow Bridge Property Co., manages 2,349 apartment units including The Green at 9&90, a 1,020-unit apartment community in Framingham, which is the largest market-rate residential complex in Central Massachusetts.
Willow Bridge did not immediately respond to a WBJ request for comment.
The third defendant with a presence in the region is Pinnacle Property Management Services, a firm acquired by Chicago-based Cushman & Wakefield in 2020. Pinnacle manages the 156-unit Orchard Apartments complex in Marlborough.
Cushman & Wakefield did not immediately respond to a WBJ request for comment. A spokesperson for the firm told Reuters that Pinnacle is solely a property manager and does not own properties or set pricing. Cushman & Wakefield itself is also named as a defendant in the lawsuit.
Massachusetts Attorney General Andrea Campbell is joining nine other state attorneys general as co-plantiffs, according to the Tuesday press release.
Other firms named in the lawsuit were LivCor, a Chicago-based firm owned by global asset management firm Blackstone, and Atlanta-based Cortland Management.
Neither LivCor nor Cortland appear to have a presence in Central Massachusetts. Blackstone, which itself is not named directly in the lawsuit, owns Oxbow Wayland, a 218-unit apartment in Wayland managed by Willow Bridge.
The Department of Justice is seeking a settlement with Cortland, which would require it to cooperate with the government and stop certain practices outlined in the lawsuit. The company told FOX5 Atlanta it was pleased to reach a settlement agreement and a criminal investigation into the firm has been closed.
The initial lawsuit against RealPage was unveiled in August, alleging the firm deprives renters of the benefits of competition on apartment leasing by using competitively sensitive information to train and run its algorithmic pricing software.
Eric Casey is the managing editor at Worcester Business Journal, who primarily covers the manufacturing and real estate industries.
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