Key facts
- CoStar Group, CBRE, Colliers, Cushman & Wakefield, JLL, and Newmark are defendants in a class-action lawsuit.
- The suit alleges a violation of the Sherman Act through horizontal price-fixing of commercial rents.
- CoStar is accused of acting as a hub for collecting and redistributing sensitive lease information.
- The defendant brokerages allegedly used this data to align asking rents and reduce concessions.
- Plaintiff FitFactariDC LLC claims it paid artificially inflated rents on a Denver office lease.
A proposed class-action lawsuit filed on June 12 in the U.S. District Court for the Northern District of Illinois accuses CoStar Group and five of the nation's largest commercial real estate brokerages—CBRE, Colliers, Cushman & Wakefield, JLL, and Newmark—of engaging in a horizontal price-fixing conspiracy. The suit, filed by plaintiff FitFactariDC LLC, alleges that CoStar acted as the central hub, collecting and disseminating sensitive lease information, while the brokerages served as spokes by submitting their data to gain access to competitors' lease terms.
According to the lawsuit, this alleged hub-and-spoke model allowed the defendants to align asking rents, reduce concessions, and resist tenant negotiations without fear of being undercut. FitFactariDC, a commercial tenant that signed an office lease in Denver brokered by one of the defendant firms, claims it paid artificially inflated rents as a result of this alleged information sharing.
CoStar Group's General Counsel, Gene Boxer, dismissed the complaint as "slapdash" and "frivolous," stating it demonstrates a lack of understanding of the company, its customers, and the commercial real estate industry. Boxer asserted that CoStar Group consistently advocates for transparent data to improve market efficiency and expects a swift victory. Devin Freedman, a partner at Freedman Normand Friedland LLP, which filed the suit, stated that the complaint details how CoStar provided competing brokerages insight into private deals, leading to less competition and higher rents.
This legal action echoes recent antitrust challenges against proptech firm RealPage, which settled a federal government suit. CoStar itself faces another class-action lawsuit from April, accusing it of monopolizing online CRE listings, a claim CoStar denies. The Supreme Court has allowed a separate case against CoStar, brought by Crexi over alleged monopoly of commercial real estate data, to proceed.