New York mayoral candidate, State Rep. Zohran Mamdani (D-NY) speaks to supporters throughout an election night time gathering at The Greats of Craft LIC on June 24, 2025 within the Lengthy Island Metropolis neighborhood of the Queens borough in New York Metropolis.
Michael M. Santiago | Getty Photos
Shares of New York regional financial institution Flagstar slid almost 4% on Wednesday after the obvious victory of Zohran Mamdani within the New York Metropolis Democratic mayoral main.
Flagstar is the rebranded identify of New York Neighborhood Bancorp, which got here beneath strain in 2024 partially on account of its actual property publicity. Former Treasury Secretary Steven Mnuchin led a $1 billion funding into the corporate in March of that yr.
Mamdani, who’s now the possible favourite to win the overall election in November, promised to freeze hire will increase in stabilized models throughout his marketing campaign. The New York Metropolis mayor has the facility to nominate representatives to the regulatory board that oversees rent-controlled residences. A pause on hire will increase may damage the revenue profile of multi-family rental properties.
Flagstar Monetary previously day
The precise influence of such a hire freeze on Flagstar’s books is unclear. Deutsche Financial institution analyst Bernard von-Gizycki estimated that between $16 billion and $18 billion of the financial institution’s multi-family mortgage portfolio can be uncovered to New York hire laws, or a couple of quarter of financial institution’s complete mortgage ebook. Morgan Stanley analyst Manan Gosalia estimated that the quantity drops to $11 billion to $12 billion when accounting just for buildings the place greater than half of models are rent-regulated.
Nevertheless, Barclays analyst Jared Shaw mentioned in a be aware to purchasers that present hire laws are already maintaining value hikes beneath the tempo of price will increase, and added “we don’t see this prospect as one thing that will change the funding thesis.” Gosalia mentioned a short-term hire freeze must be “manageable” for Flagstar however a longer-term pause may spur the financial institution to lift its mortgage loss reserves.
Workplace-focused actual property shares with New York Metropolis publicity have been additionally beneath strain on Wednesday, with SL Inexperienced Realty and Vornado Realty Belief fell 5.7% and 6.7%, respectively. Mamdani has known as for a better company tax price, although as mayor he would have little management over that space of coverage.
Mamdani led former New York Gov. Andrew Cuomo after first-round ballots have been counted on Tuesday, and Cuomo conceded the race. Nevertheless, the first makes use of a ranked selection voting system, which implies that Mamdani is not going to formally be the Democratic nominee till he surpasses 50% of the vote in a later counting spherical.
Within the basic election, Mamdani is predicted to face Republican nominee Curtis Sliwa and a few unbiased candidates, together with incumbent Mayor Eric Adams.
— CNBC’s Michael Bloom contributed reporting.
