Zohran Mamdani’s Ideas on Commercial Real Estate Come Into Focus

When Zohran Mamdani upset Andrew Cuomo in the Democratic primary, New York’s corporate titans experienced a multiday meltdown.

Six hours after Cuomo — the preferred candidate of commercial real estate and much of the city’s business community — conceded the race to the Queens assemblyman and Democratic Socialist, Dan Loeb, the CEO of hedge fund Third Point, tweeted, “It’s officially hot commie summer.” 

Red Apple CEO John Catsimatidis, who threatened to shutter his Gristedes grocery stores as Mamdani promoted his city-run grocery pilot, compared the Democrat to Fidel Castro. “We’re going to have a big fight before we give up New York City. We’re not giving up New York City that easily. We will do what we have to do now,” Catsimatidis told AMNY. 

Some Wall Street and real estate honchos are hoping Mayor Eric Adams, who skipped the primary and launched an independent re-election bid, can stop Mamdani’s momentum and are reportedly fundraising for him in the Hamptons this weekend. Real Estate Board of New York President Jim Whelan did not endorse either candidate, saying, “Voters will need to choose between practical or fanciful and extreme ways to continue the drop in crime, build much necessary housing, and create good jobs.”

Pershing Square Capital CEO Bill Ackman skipped the denial and anger stages, and moved straight to bargaining by offering to raise hundreds of millions of dollars for anyone who entered the race. “So, if the right candidate would raise his or her hand tomorrow, the funds will pour in,” Ackman wrote on X.

For now, Mamdani is the overwhelming favorite. He declared victory after surging ahead of Cuomo by seven points in the first round of ranked-choice voting last month and quickly flipped endorsements. Mamdani’s backers now include Democratic leaders and labor unions, including the New York City Labor Council, the Hotel Trades Council and 32BJ SEIU, which had previously backed Cuomo. Once city election officials tabulated all the ranked-choice rounds on July 1, Mamdani finished with 56 percent to Cuomo’s 44 percent.

New York’s gilded set may have to make their peace with the results.

Partnership for New York City President Kathy Wylde, who is organizing a meeting with the Democratic nominee and city business leaders later this month, said many of her members have concerns about Mamdani’s management experience as well as his agenda on taxes, public safety and rent regulation.

“No one knows him. He didn’t come to them for money or for votes,” Wylde said. “I think that we need to give it some time for Mamdani to introduce himself to the business and real estate community.”

Lobbyist Suri Kasirer, who praised Mamdani’s communications and organizing skills, said real estate leaders would be wise to ensure the city succeeds if Mamdani wins in November.

“The city continues to have real, important challenges — affordability, mental health, public safety, dealing with the Trump administration — and now is not the time to give up on the best city in the world,” Kasirer said. 

Mamdani’s campaign did not respond to a request for comment.

The chief complaint business leaders have about the nominee concerns his tax plan. The assemblyman is seeking to change New York’s corporate tax rate to 11.5 percent from its current 7.25 percent for businesses with an income base above $5 million, which his campaign estimated would generate $5 billion a year in revenue. He also wants to add a 2 percent income tax on New Yorkers earning more than $1 million annually, which could raise $4 billion annually.

Mayors do not have the power to alter tax rates on their own. Mamdani would need to convince Albany lawmakers to make changes during an election year in 2026, which is unlikely. Democratic Gov. Kathy Hochul, who has not endorsed his bid, has been wary for several years about raising taxes. She dismissed Mamdani’s tax hike proposals in June, but worked with the legislature to extend the so-called millionaire tax in the state budget through 2032.

Instead, Mamdani could exert more influence on New York City’s property taxes. Last March, the state Court of Appeals ruled that the city must revamp its inequitable property tax system, suggesting that the city can make administrative changes to its assessments without needing approval from the legislature.

Echoing efforts that stretch back years, Mamdani’s campaign proposed adjusting property class assessment percentages in order to lower tax rates for outer-borough homeowners while raising rates for brownstone, co-op and condo owners in wealthier areas. It also suggested adding so-called circuit breakers for low- and middle-income homeowners in gentrifying neighborhoods to prevent property taxes from becoming unaffordable; and eliminating a law that compares condo and co-op assessments to similar rental properties on the market.

Some elected officials criticized Mamdani’s approach for targeting “richer and whiter neighborhoods,” but the campaign wrote in its platform on its website it would largely follow a city panel’s property tax reform recommendations that were released in 2021.

Mamdani also promised the city would build 200,000 new units of permanently affordable homes over the next 10 years. Getting there won’t be easy. 

Last year the Adams administration secured the passage of its City of Yes plan that reformed the city’s zoning rules to allow denser residential construction and eliminate mandatory parking requirements in some areas. But the City Council allowed several neighborhoods to opt out of the changes and shrunk the number of estimated new units from 109,000 to 80,000.

Mamdani’s views on housing have evolved. In 2023, he fought against the extension of the state’s 421a tax incentive that would have subsidized developers who included below-market-rate units in mixed-use properties and opposed an Astoria, Queens, development that he believed was not affordable enough for the neighborhood.

But last month he told The New York Times he recognized the significant role that private developers play in the housing market. He also argued the city should upzone wealthier areas that have not allowed affordable housing projects and end parking minimums — ideas that other electeds, including Adams, have bandied about for years.

YuhTyng Patka, a partner at Adler & Stachenfeld, said developers appreciated that Mamdani recognized the seriousness of the city’s affordable housing crisis but doubted he could make substantial changes to land use and zoning regulations after the Adams administration’s overhaul.

“It took a long time to accomplish, and the end result was very different from the original proposal due to community feedback and pushback on certain aspects of it,” Patka  said. “What any mayor wants is not always what he gets, and the mayor will need to work with the City Council, whose members may not wholly agree with the mayor’s goals.”

The most controversial plank in Mamdani’s campaign platform is his vow not to increase rents for those living in rent-regulated homes — something a mayor can directly influence.

On June 30, the Rent Guidelines Board voted to raise rents on stabilized units 3 percent on one-year leases and 4.5 percent for two-year leases despite calls from activists for a rent freeze. The board has now increased rents in each year of Mayor Adams’s four-year tenure.

Mamdani did not attend the board meeting but chastised Adams, who appoints a majority of the members on the panel, for “placating real estate donors rather than serving the working people he once claimed to champion.” He pledged to appoint board members who would not approve any increase on rent-stabilized homes next year.

But some landlords warned they cannot pay for repairs to their buildings or return vacant units to the market if Mamdani gets his way.

“I can’t stress enough that most of the rent-stabilized housing stock cannot withstand a four-year premeditated rent freeze without looking at a shred of evidence,” said Kenny Burgos, CEO of the New York Apartment Association, which represents the owners and operators of 500,000 apartments.

Mamdani will ultimately have a choice to make between using his position as a bully pulpit to express ideology or deliver services to those who elected him. Those could overlap — say, by halting rent increases — but he may have to break from allies who want affordable housing to be built entirely by the public sector.

“I would be very thoughtful about reining in the more extreme voices around him,” said Ken Fisher, an attorney with Cozen O'Connor’s Business Law Department. “The rhetoric around rent increases was based on a disapproval of real estate being privately owned at all. He’s moved away from that, but I suspect some of that will come back in terms of how they put the government together.”