Billionaire real estate investor Barry Sternlicht’s firm is considering relocating from New York now that Zohran Mamdani has been elected mayor, and he says other businesses will likely follow suit.
Sternlicht, the chairman of Starwood Capital Group, said the city will essentially turn into Mumbai under Mamdani’s tenure, suggesting that tenants will be emboldened not to pay their rent.
He said: ‘The far-left gets really nuts and says the tenants don’t have to pay. Well, you can’t kick them out if they don’t pay.
‘So, the neighbor finds out the neighbor isn’t paying, and they don’t pay, and the next guy doesn’t pay, and then you’re basically going to turn New York City into Mumbai.’
Mamdani wants to strengthen eviction protection for tenants, which could make it take longer for landlords to evict them. However, none of Mamdani’s policies, including the freeze in rent costs for stabilized tenants, would excuse nonpayment.
Speaking to CNBC, Sternlicht said any lapse in public safety under Mamdani will encourage people and companies to leave the city.
He said: ‘If people feel like their kids aren’t safe on the streets, they will pull them out of school and they will leave. And if he defunds the police or he doesn’t give them the honor and prestige they deserve, I think the city’s in for a really tough time.’
In December 2020, Mamdani came out in support of defunding and dismantling the New York Police Department. He has since walked that back and has promised to maintain the current cop staffing levels.
Barry Sternlicht, chairman and CEO of Starwood Capital Group, said businesses will flee New York City under Zohran Mamdani’s tenure as mayor
Sternlicht added that his team in New York, which is spread across two Midtown offices, are considering leaving for good after Zohran Mamdani (pictured) was elected mayor this week
Starwood Capital has commercial and residential real estate investments throughout the city, including two luxury hotels
Sternlicht added that employees working in Starwood Capital’s New York offices have already expressed interest in leaving, now that Mamdani can move into the mayor’s Gracie Mansion residence.
‘We have a big office here ourselves in New York. I mean, we’ll see how this works, but the team in New York is for the first time saying maybe we should leave,’ he said.
The Daily Mail asked a representative for Sternlicht how many employees work at Starwood Capital’s offices, both in Midtown Manhattan, but an answer was not provided prior to publishing.
Sternlicht also declined to elaborate on his company’s plans in New York City beyond the CNBC interview.
Starwood Capital employs about 7,000 people across 19 cities in the United States and abroad. It also has commercial and residential real estate investments throughout the city, including two luxury hotels.
One is near the Brooklyn Bridge and the other, the Baccarat Hotel, is across the street from the Museum of Modern Art.
Large corporations like Sternlicht’s fear Mamdani’s desire to hike the state’s top corporate tax rate from 7.5 percent to 11.5 percent.
Wealthy individuals and families living in New York City, while also being concerned about public safety, are grappling with Mamdani’s open pursuit of a 2 percent flat tax on anyone who earns $1 million or more in annual income.
These individuals, some of whom have been planning moves for a while, are now seriously considering leaving the city for various suburban communities, two realtors have told the Daily Mail.
The building in the Meatpacking District that contains one of Starwood Capital’s offices
A bar restaurant within the Baccarat Hotel, a property owned by Starwood Capital
Wealthy individuals and families living in New York City are calling Zachary and Heather Harrison, a married realtor duo with Compass, to explore buying a home in Westchester County to avoid Mamdani
Zachary and Heather Harrison, a married realtor duo with Compass, sell homes all throughout Westchester County, which is immediately north of the Bronx.
They said they have been getting a deluge of calls from Manhattanite buyers ever since Mamdani won the Democratic primary in June.
Some of them decided to leave right then and there, spending the last few months getting prepared, they said.
But after Mamdani officially won this week, Heather Harrison said, ‘We’ve definitely gotten a few calls where [they say], “Okay, it’s real. It’s happening. Please let us know when the next round of inventory is going to come on the market.”‘
‘Some of them have mentioned [Mamdani] as a reason that they want to leave the city, even though they were going to be lifers in Manhattan and send their kids to the schools and were never really set for suburbia,’ Heather Harrison added.
Zachary said potential buyers have said that since Westchester towns do not collect resident income taxes, except Yonkers, the county looks more appealing than ever.
‘In the couple of weeks leading up to the election…we were seeing insane bidding wars, with houses going 500K-plus above the asking price,’ Heather said, adding that most of their listings were having 50 to 75 showings.
This comes as inventory is down more than 70 percent since the pre-COVID-19 era. That’s why Mamdani-motivated city escapees are being forced to fight over a scant few homes.
Joy Kim Metalios, who runs her own real estate firm in Greenwich, Connecticut, said some of her clients are looking to move out of Manhattan as well
The Harrisons said that most of the bidding wars on Westchester homes are under $4 million, but some competing bids are coming in on homes priced between $4 million and $5 million.
To be approved for a $5 million home in Scarsdale, one of the wealthiest towns in Westchester, you’d need to have no monthly debt, a $1 million down payment at the ready and $1 million or more in pre-tax income, according to Wells Fargo.
In other words, you’d be the exact type of person Mamdani wants to target with new taxes.
A similar story is playing out in Greenwich, Connecticut, a town that shares a border with Westchester.
Joy Kim Metalios, the managing director for the Metalios Team at Houlihan Lawrence, told the Daily Mail that Greenwich is also lagging in home inventory while dealing with a sudden boost in demand this fall.
Metalios said she has gotten calls from people in the city who said that if Mamdani won, they’d have to ‘get out’.
‘I think we’re definitely getting people that were thinking of moving out of the city, perhaps a year or two out, but they’re speeding that process up,’ she said.
Metalios said sellers she represents are trying to capitalize on the situation with varying success.
‘There are some sellers who are trying to be opportunistic now, and they’re like, “Oh, do you think that we can get more money for our house now that all these New Yorkers are coming out?”‘