Primary win by pro-rent freeze Mamdani hits Flagstar bank on NYC market exposure
New York Mayor Candidate, State Representative Zohran Mamdani (D-NY) speaks with supporters at a meeting night meeting in the Long Island City neighborhood of Queens Borough in New York on June 24, 2025.
Michael M. Santiago | Getty Images
New York Regional Bank shares Flagstar After the visible victory of Zohran Mamdani at the New York City Democratic Mayor, he fell by 6% on Wednesday.
Flagstar is the re -branded name of the New York community Bancorp, which was partly under pressure from real estate exposure in 2024. Former Treasury Secretary Steven Mnuchin invested a $ 1 billion in the company in March of that year.
Mamdani, who was likely to win the general election in November, promised to freeze rent increases in stable units during his campaign. The Mayor of New York has the power to appoint representatives to the regulatory committee that controls lease -controlled offices. A pause on rent increases can damage the profile of multiple family -rental properties.
Flagstar Financial
Such a rent ice cream on Flagstar’s books is uncertain. Deutsche Bank Analyst Bernard von-Gizycki estimated that the Bank’s multi-family loan portfolio would be exposed to a quarter of a quarter of the new York rental arrangements or the Bank’s total credit book between 16 billion and 18 billion dollars. Morgan Stanley Analyst Manan Gosalia, only half of the units are counted for buildings where the rent was counted, while the number fell to $ 11 billion.
However, as a note to Barclays analyst Jared Shaw, as a note to customers, he said that existing rental arrangements kept price increases below cost increases and said, “We do not see this expectation as something to change the investment thesis.” Gosalia said that a short -term rental ice cream should be “manageable” for Flagstar, but a long -term pause may encourage the bank to increase credit loss reserves.
Office -oriented real estate stocks were also under pressure on Wednesday. SL Green Realty And Vornado Realty Trust Both dropped about 5%. Mamdani called for a higher corporate tax rate, but as the mayor, he would have little control over this policy area.
Mamdani, the first round of votes were counted on Tuesday after the old New York Gov. Andrew led Cuomo and Cuomo accepted the race. However, a primary sequential election voting systemIn other words, Mamdani will not officially be a democratic candidate until it exceeds 50% of the votes in a later counting round.
In the general election, Mamdani is expected to face some independent candidates, including Republican Candidate Curtis Sliwa and Mayor Eric Adams.
– Michael Bloom from CNBC contributed to reporting.
