CoStar Hit With Lawsuit, Alleging Price-Fixing for CRE Rents

CoStar is facing another antitrust lawsuit, this time over rents on office, retail and industrial properties.

A commercial tenant filed a proposed class-action lawsuit accusing the data giant and a handful of significant brokerages of a price-fixing scheme, Bisnow reported. The defendants include CBRE, Colliers, Cushman & Wakefield, JLL and Newmark.

FitFactariDC LLC alleged a “hub-and-spoke” conspiracy in its filing in the U.S. District Court for the Northern District of Illinois, accusing CoStar of gathering and disseminating sensitive lease data, while the brokerages allegedly submitted the data and benefited by receiving access to competitor information.

The plaintiff claims the conspiracy resulted in it paying “artificially inflated” rents on a lease in Denver.

“Armed with near-real-time visibility into competitors’ bottom-line lease terms, Defendants were able to align asking rents, reduce concessions, and resist tenant negotiations without fear of being undercut,” the lawsuit alleges.

CoStar Group general counsel Gene Boxer said the company expected “swift and complete victory,” labeling the lawsuit as “frivolous.” The other defendants either declined or did not respond to the publication’s request for comment.

The proposed class-action case follows litigation leveled in recent years against RealPage and multifamily landlords affiliated with the company.

Litigation against RealPage began after a 2022 ProPublica article that detailed how its YieldStar software — since rebranded to AI Revenue Management — could inflate rents and suppress competition based on its algorithm.

The Department of Justice filed suit, raising industrywide questions about whether sharing aggregated, anonymized rent data, as is central in RealPage’s software, could be construed as collusion.

RealPage in November reached a settlement with the DOJ, absolving the company of financial penalties and admissions of wrongdoing, contingent on the company committing to platform changes and agreeing to independent oversight.

CoStar is famously litigious and recently involved itself into a legal battle involving Zillow and Compass and Midwestern Real Estate Data.

Last week, the firm filed an amicus brief opposing Zillow’s motion for a preliminary injunction in its antitrust lawsuit against Compass MRED, arguing that granting the request would unfairly favor Zillow’s business interests.

CoStar contends Zillow is engaging in anti-competitive behavior by restricting competitors’ access to listings while simultaneously utilizing its “Zillow Preview” product to keep its own pre-market inventory exclusive.

The dispute revolves around Zillow’s new listing policies, which led MRED to suspend Zillow’s data feed last month, leaving Zillow without access to a significant portion of Chicago-area listings.

— Holden Walter-Warner