Starwood Capital CEO on Mamdani win
Billionaire real estate investor Barry Sternlicht had harsh words for New York City’s newly elected mayor, Zohran Mamdani. Sternlicht is Chairman and CEO of Starwood Capital Group, which has commercial and residential holdings and joint ventures in the city as well as its own offices in Midtown Manhattan.
Sternlicht blamed the excessive cost of development and management on the unions and said he expected the situation to worsen under Mamdani.
“Over $100 million, every project in New York has to go to the union, and that’s very expensive. That leads to extremely expensive housing. And other developers have tried to cut deals with the unions, but they run New York, and that’s one of the main reasons why the blue states are so expensive and it’s so hard to add housing supply to them,” Sternlicht said in an interview with CNBC Property Play next week.
“And then the far left gets all nuts and says tenants don’t have to pay. I mean, you can’t kick them out if they don’t pay. So the neighbor finds out his neighbor didn’t pay and they don’t pay and the next guy doesn’t pay either, and then you turn New York City into Mumbai.”
Mamdani’s centralized housing platform focused on freezing rents, but her strategy was challenged by Sternlicht, who said he had not spoken to the mayor before the election and had not contributed to his opponent, former Gov. Andrew Cuomo.
“It’s not the core issues it’s focused on. We need to increase housing. That’s not going to be easy, is it? You need serious subsidies from the government if they want us to work with unions. Unions have to be more compliant with labor laws and wages and everything else, otherwise you can’t add economically.”
Sternlicht also expressed concerns about public safety in the city.
“That’s the No. 1 thing. If people feel like their kids aren’t safe on the street, they’re going to pull them out of school and leave. And if they defund the police or don’t give them the dignity and prestige that they deserve, I think the city is in for a really tough time,” Sternlicht said.
He said he believes New York will survive, but it will likely get much worse before it gets better. He said Starwood Capital was already considering evacuating its New York offices, especially given its anger over Mamdani’s success in the city, which was part of his rise to power.
“Maybe he will do this, he will learn from history. Maybe the million people who voted for him will not realize that socialism has never worked anywhere on planet Earth,” Sternlicht said.
“People work really hard. How can we help others be successful and believe in the American dream? That’s probably a better message for a leader in the city than saying, let’s tax everyone who’s successful, force them to leave, and then we have to rely on Washington to help the city survive,” Sternlicht added.
