MW Mamdani's victory could be a loss for investors in these New York City real-estate stocks

By Steve Gelsi

Worries about higher taxes for companies and ultrawealthy people and more regulations is hurting the stocks of some NYC-focused real-estate investment trusts

Policies such as government-owned grocery stores and rent-price controls promoted by New York City mayoral candidate Zohran Mamdani have cast a chill on stocks with exposure to the city's real-estate market, analysts noted on Wednesday.

Mamdani won the Democratic primary Tuesday night by defeating his closest challenger, Andrew Cuomo, the former governor of New York state, in the primary. He may still face Cuomo as well as incumbent Mayor Eric Adams in the general election in November.

It could still be a while before the actual winner of the primary is announced, given the city's ranked-choice voting system, as Mamdani didn't get more than 50% of the vote. Still, $Vornado Realty Trust(VNO-N)$'s stock $(VNO)$ fell 4% in morning trading, while shares of fellow real-estate investment trust SL Green Realty Corp. (SLG) dropped 3.7%.

And shares of Flagstar Financial Inc. $(FLG)$, a big lender in the New York City real-estate market, were down 6%.

Mizuho analyst Vikram Malhotra warned of the negative "Zohran effect" on New York City office stocks, particularly those of SL Green and Vornado.

He said concerns have been mounting over Mamdani's "more socialist-oriented" agenda, which could lead to "more selective corporate spending / hiring in the city and more out-migration of individuals and families, reducing the need or growth of office leasing," Malhotra wrote in a note to clients.

Of the total 25.3 million square feet of property owned by SL Green, 96.6% of it is in the New York City borough of Manhattan, including about 95.1% of commercial property and about 1.4% of residential property.

For Vornado, square footage in service in New York totaled 24.36 million square feet, or 75.1% of its total square footage.

Malhotra reiterated his outperform rating on Vornado's stock, saying he would view any weakness resulting from Mamdani's victory as an opportunity for investors to buy. He kept his neutral rating on SL Green's stock.

Meanwhile, Citi analyst Ben Gerlinger said Flagstar's stock is "likely to see incremental downside pressure" due to jitters over Mamdani's "sweeping 'freeze the rent' campaign."

The candidate's policy position "potentially pulls forward incremental credit concerns," Gerlinger said.

However, the longer-term fundamental impact on Flagstar's stock "is likely very minimal."

He reiterated a buy rating on Flagstar's stock, saying he continues to expect "material upside potential over a 12-month time frame" and that the results "could open the door to an even more attractive entry point in the very near future."

Vornado's stock has dropped 12.2% in 2025 and SL Green shares have shed 12.1%, while Flagstar shares have rallied 12.1%. The Real Estate Select Sector SPDR ETF XLRE has gained 2.9% this year and the S&P 500 index SPX has tacked on 3.7%.

-Steve Gelsi

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June 25, 2025 10:15 ET (14:15 GMT)

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