Ky. Off. of the Att'y Gen., Complaint, Commonwealth v. RealPage, Inc. (filed July 2, 2025)

Citation: Ky. Off. of the Att'y Gen., Complaint, Commonwealth v. RealPage, Inc. (filed July 2, 2025)
Jurisdiction: Kentucky (state)
Source: Official source
Original Source: https://www.ag.ky.gov/Press%20Release%20Attachments/2025.07.02%20Realpage%20C... ↗

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determined that it will recommend a price increase or a price decrease, it again uses competitors’
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transactional data to determine how much the price should move and provide a floor plan price

recommendation. It uses nonpublic transactional data from peer properties, in addition to data

from the subject property and surrogate properties, to generate a market response curve—

analogous to a market demand curve—for every floor plan. This demand curve provides an

estimate of how demand for particular apartments would change in response to changes in rents,

a measure that RealPage calls elasticity. In other words, it uses competitors’ nonpublic

transactional data to calculate how many leases the property will likely gain or lose for a

particular floor plan, for every price point along the curve. Using this data, AIRM or YieldStar

can determine how much the price can increase and still achieve the target number of leases, or

by how little price can decrease to maintain a target occupancy.

84. RealPage describes elasticity as a pivotal input into balancing supply and demand

and, therefore, price.

85. The use of surrogate properties in this pricing process has the potential to push

convergence on price even further. As two properties’ surrogate sets become closer—and

therefore their respective demand curves become more similar—AIRM and YieldStar will

generate increasingly similar prices for the two properties. And the use of surrogates is common.

One of the largest landlords in the country, for example, uses surrogates at over 80% of its

properties.

86. This process repeats for every floor plan in the client’s property, every night. A

new floor plan price recommendation is generated daily.