New York City’s property market is weighing what a Zohran Mamdani win for mayor could mean, as Cushman & Wakefield’s Bruce Mosler outlined the stakes on national television. In an appearance on Mornings with Maria, Mosler examined how policy choices under a progressive City Hall could reshape offices, rentals, and investment flows across the five boroughs. The conversation comes while vacancies remain high, conversions lag, and renters face tight supply.
Market Backdrop: Vacancies, Rates, and Stalled Supply
Office towers are still dealing with hybrid work, a slower return to desks, and expensive borrowing costs. Availability in Manhattan has hovered near or above one in five offices, depending on submarket and measure, since 2023.
Office availability in Manhattan stands above 20%, while average asking rents remain near record highs.
That mismatch—empty floors and firm asking rents—reflects heavy landlord costs, stubborn interest rates, and long lease cycles. On the housing side, the city’s rental vacancy rate has hovered near historic lows, pushing up rents as new construction trails demand.
A key driver is the lapse of the 421-a tax abatement in 2022, which many developers say stalled rental projects that need incentives to pencil out. Office-to-residential conversions have gathered attention, but practical barriers remain: zoning, plumbing, light and air rules, and costly retrofits. Every lever matters when financing is tight.
What a Mamdani Administration Could Change
Mamdani, a Democratic Socialist assemblymember from Queens, has advocated for tenant protections like “good cause” eviction, stronger rent oversight, and stricter conditions on tax breaks. His approach could tilt the city’s housing strategy from supply incentives to renter safeguards.
- New construction: Less generous abatements could slow groundbreakings, unless paired with other offsets.
- Conversions: Streamlined rules and subsidies could make office-to-residential deals workable, especially in Midtown South and Downtown.
- Commercial policy: Tougher stance on speculative vacancies or tax changes could affect investment appetite.
Mosler’s core message was about predictability. Investors, he argued, can handle stricter rules if they are clear and durable. Uncertainty, not tough policy, is what sends capital elsewhere.
Industry Reaction: Risk, Reward, and Flight
Developers and lenders are likely to run the math under any new regime. If incentives shrink, returns must come from lower land prices or cheaper construction, both hard to achieve. Some projects will stall; others will reprice; a few will move ahead with public help.
Tenant advocates would cheer stronger protections, arguing they keep families housed while wages lag rent growth. Landlords counter that supply—especially purpose-built rentals—drops without targeted breaks. The outcome depends on execution: a clear path for conversions, quicker approvals, and a timetable for bringing units online.
On the office side, any plan that encourages upgrades, subdivides big floors, and supports labs, studios, and classrooms could chip away at vacancy. But lasting gains require job growth to refill towers. That means a city message that welcomes employers, even while asking them to adapt buildings for new uses.
Data Signals to Watch
Several indicators will show whether policy shifts help or hinder the market:
- Rental starts: New multifamily permits and groundbreakings by quarter.
- Conversion pipeline: Number of office buildings applying for residential approvals and financing.
- Vacancy and sublease space: Especially in Midtown and Downtown cores.
- Cap rates and sales volume: A proxy for investor confidence in city policy.
- Time-to-permit: Days from filing to approval for conversions and new builds.
If these metrics improve even as tenant protections strengthen, City Hall may claim a policy win. If they worsen, pressure will mount to restore incentives.
The Interest Rate Wildcard
Even the best city plan wrestles with the Federal Reserve. High borrowing costs keep refinancing tough and new deals sparse. A modest rate cut cycle would lower carrying costs and widen the range of viable projects. Without relief, more buildings could head for workouts or trades at discounts, setting a new price floor for development sites.
Mosler’s message boiled down to trade-offs and timing. New York can guard renters, push conversions, and still attract capital—if rules are clear and approvals are swift. The next mayor will inherit a market at a knife’s edge: enough stress to force change, enough strength to draw money back with the right signals. Watch the permit counts, the conversion queue, and whether office availability finally trends down. Those numbers will tell the real story long before ribbon cuttings do.
